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How to Change Inflexible Teacher Pay Systems

ERS mentioned in National Journal

This blog originally appeared on the National Journal website. View that version here.

Try this on for a management challenge. Your annual operating budget hasn't seen an increase in years and likely won't for a while. Your customer base is unpredictable at best and decreasing at worst. And your employees, who are hard to fire, are guaranteed a 1 percent to 3 percent salary increase each year just for sticking around. The payroll costs grow. The budget shrinks. At some point, something has to give.

This is situation faced by hundreds of school districts around the country, many of them in urban areas with a lot of poverty. Their funding is flat or decreasing, with no relief in sight. Their enrollments are declining, but the students still need an education. And their compensation structure for teachers is locked in with steady increases, shrinking their ability to pay for anything else. "You just can't afford it. Year after year, they have to press back on other things," says Karen Hawley Miles, president of Education Resource Strategies, a nonprofit that advises school districts on effectively managing their resources.

There is no easy way to change a compensation system that is held dear in the teaching community precisely because it is so reliable. Teachers give up a lot in their chosen profession, including being paid at market rates for their professionalism. A guaranteed job and paycheck is intended to make up for that. Many school administrators are noting, however, that burgeoning payroll costs can't go on forever. To change the compensation system such that it rewards teachers for improving performance rather than time, they need a carefully phased transition and buy-in from either the teaching community or the public. Ideally, they have buy-in from everyone.

Sound impossible? It isn't, according to a new report from ERS and the Center for American Progress. The paper, "Do More, Add More, Earn More" offers pointers from 10 school districts that successfully redesigned their teacher salaries to make them more responsive to the actual responsibilities and effectiveness of individual teachers. The authors recommend, for example, that teachers be offered extra incentive pay for taking jobs in hard-to-staff schools or for taking on leadership roles such as department heads, curriculum writers, or principal interns. They suggest speeding up the salary growth for new, high-performing teachers such that they can reach the district maximum in 10 years or fewer. New hires will more likely be attracted to the job if they know they won't be on subsistence wages well into middle age.

No salary redesign system will work without evaluations, arguably the toughest part of any new compensation system, so much so that it can derail the entire effort. Volumes can be written on this topic, and, perhaps for that reason, the ERS/CAP report barely touches on it. Miles has observed many districts' evaluation efforts. She cites one district named in the report, Hillsborough County, Fla., that invested heavily in a sophisticated evaluation system to ensure that teachers and principals like felt comfortable with it. They doubled the number of teachers and principals involved in evaluations and implemented fairly intense training for evaluators. It cost a lot of money, she said, but it is now a robust enough system to ensure that proficient teachers get recognized as such and low performers are pointed out as well.

Of course, you can't pay more for some things without cutting in other areas, which is another area where a redesign gets tricky. Teachers on the old salary structure need to be transitioned into a new one that doesn't automatically increase their pay for time on the job or for extraneous things like advanced degrees. The lowest-performing teachers need to stop getting raises. Period. These changes can be incredibly disruptive, especially in districts that need to cull a lot of "dead weight" teachers. (Yes, that happens.)

One way to ease the pain is to give veteran teachers the option of staying on the old salary structure for at least a few years while the new structure is being put in place. This can be expensive initially because the lower performing teachers will likely stay on the old structure while only a few adventurous ones will attempt to go for more cash that is linked to their performance. But the opt-ins can also give administrators the opportunity to fine-tune the evaluation system and familiarize the teaching corps to its contours before cutting off the old salary increases completely.

The one crucial point about an optional pay schedule is that it must be temporary. "The secondary clause to the opt-in is, you can't do that forever. There has to be a sunset," Miles says. "Teachers figure out really quickly which schedule they're going to make the most on."

A critical finding in the report is that some sort of onetime cash influx is necessary for a school district to successfully implement a transition to a new salary system. Many of the districts identified in the report got grants from the Education Department to revamp their teacher compensation. Others had grant funding from the Gates Foundation. "You have a combination of people who are on the old schedule and making more than they would in the new schedule. Yet you haven't yet saved up the dollars that you will save in changing your structure," Miles says. "That's why the financials of this really depend on what the distribution of your teacher seniority is in your district."

Is it always a struggle? Yes. But CAP Executive Vice President for Policy Carmel Martin, a veteran education policymaker, says the report is intended to show school districts that change is possible. "These are the things that seem to be components of an effective system. It's our hope that other districts will try to adopt these forms," she says. "Although it's hard work, it's something that can be done."

For our insiders: How low do school districts' budgets have to get for administrators to attempt such salary redesigns? Why is it so difficult to implement them? Would it help if base salaries for teachers were higher to begin with? What can states do to help school districts that want to attempt a redesign? Is it even a good idea? Are we seeing the beginning of the end of teacher tenure?

How to Change Inflexible Teacher Pay Systems
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