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##  Alternative Teacher Compensation. ERIC Digest Number 142.                    

Teacher compensation is gaining renewed attention in state                      legislatures and school district offices as policymakers seek to                attract and retain qualified individuals to teaching and also                   explore creative ways to promote higher educational and professional            standards. 
This Digest examines various alternative methods of                teacher compensation currently proposed or in practice in school                districts around the country. WHAT IS THE CURRENT STANDARD FOR                TEACHER COMPENSATION?The single salary schedule, which pays                 individual teachers on the basis of their years of experience and               educational units or degrees, has been in place nationwide for at               least 50 years  (Odden 2000).  Attempts to unseat the single salary             schedule have largely foundered. 
The 1980s saw significant                    experimentation with merit-pay and career-ladder systems, which                 rewarded teachers financially based on performance reviews and their            willingness to take on extra responsibilities. The seemingly                    subjective nature of administrator-led reviews created resentment               among teachers and their unions and was "at odds with the                       team-based, collegial nature of well-functioning schools" (Odden).              Odden asserts that virtually none of the merit-pay systems enacted              prior to the 1990s survives today. WHY CHANGE THE SINGLE SALARY               SCHEDULE?Despite its resilience, the single salary                          schedule "seems to be always under attack"  (Odden).  Although                  predictable and fair, the current system, say its critics, rewards              mediocrity by valuing seat time over teaching skill. A tight labor              market, greater scrutiny from state legislatures, and new laws in               some states that encourage or even require changes in teacher                   compensation are among the factors currently pressuring schools to              raise salaries. 
Demographically, the need for new teachers is                 rising to an epic level. The U.S. Department of Education estimates             that the nation will need more than a million new teachers by 2010,             nearly half the current work force of 2.6 million in elementary and             secondary schools.  An estimated 50 percent of new teachers leave               the profession within five years, many of them citing money and                 professional dissatisfaction as key reasons. 
At the same time,                policymakers seem unwilling to allocate more money to schools                   without ensuring a return on their investment.  Linking teacher pay             to student test scores, for example, is unpopular with many teachers            and their unions but may be imposed on school districts by                      legislators or district negotiators. WHAT ALTERNATIVES EXIST TO               THE SINGLE SALARY SCHEDULE?There are four main types of                     alternative compensation systems in use today: (1) pay for                      performance, (2) knowledge- and skills-based pay systems, (3)                   school-based performance award programs, and (4) compensation for               certification with the National Board for Professional Teaching                 Standards (NBPTS). 
Pay for performance. This concept generally                links teacher pay to certain performance benchmarks, notably student            test scores.  School districts in Colorado, Minnesota, Indiana, and             other states are experimenting with some form of pay for performance            linked to student test scores  (Urbanski and Erskine 2000).  This               concept, like merit-pay systems of the past, is troubling to many               teachers who worry that pay will be linked to subjective factors                outside their control.  The National Education Association recently             rejected a resolution that would have accepted pay for performance              provided the systems were "clearly stated," "subject to objective               measurement," and did not use student test scores to determine                  salaries  (Archer, July 12, 2000). 
One alternative school in Los              Angeles ties dollar amounts to teachers' demonstrated skill in                  lesson planning, literacy instruction, and the use of technology. An            administrator and a peer teacher conduct assessments four times a               year, rating the skills of those being evaluated.  The teachers also            rate themselves, and their scores account for one-third of the total            score. 
Systems based on knowledge and skill. Some states, such as             Ohio and Colorado, are incorporating relatively new assessment tools            produced by the Educational Testing Service (ETS) and the Council of            Chief State School Officers (CCSSO) into their compensation                     systems.  These tools, known as Praxis and INTASC assessments,                  assess and test teachers' core content knowledge as well as clinical            teaching practices and pedagogy. Performance on these assessments is            one factor in earning increased pay, though both the Denver and                 Cincinnati plans allow teachers to demonstrate acquisition of new               knowledge and skills through portfolios of their class-work and                 professional-development activities. 
The Consortium for Policy                Research in Education (CPRE) stresses that knowledge- and                       skills-based compensation systems can and should reward teachers for            acquiring whatever skills a school needs.  Thus, a plan could                   encourage and reward teachers who learn skills such as budgeting and            curriculum planning, which might allow talented individuals to both             teach and perform administrative duties, instead of leaving teaching            altogether for better-paying administrative jobs. 
Systems based on            school performance. School-based-performance award (SBPA) programs              generally tie financial bonuses to specific goals and benchmarks,               such as improving test scores in core subjects and reducing                     absenteeism and dropout rates.  Some school districts restrict the              funds to school-improvement projects, whereas others give bonuses               directly to staff with no restrictions. In the Charlotte-Mecklenburg            district, schools set annual improvement goals based on student                 achievement on standardized tests. The district grants staff                    unrestricted cash bonuses for meeting their goals. 
Maryland's                 program assesses student attendance and performance on two                      standardized tests.  Maryland's Department of Education awards cash             bonuses to schools but not to staff for meeting targeted goals.  The            Department also releases report cards on state and district progress            toward meeting standards, thus creating incentives in the form of               public approval and support or public criticism. 
The CPRE believes            that current SBPA programs do a good job of focusing teacher and                system attention on key educational goals and continuous                        improvement.  However, it argues that SBPA programs can be                      strengthened by providing more clearly stated goals and consistent              feedback so that teachers know what is expected of them and what                knowledge and skills they should strive to acquire.  It also calls              for more consistent funding to assure teachers that the bonuses will            be available if they meet their goals. 
Compensation based on                  certification. Certification through the NBPTS is gaining                       recognition. About half the states provide financial incentives for             achieving board certification. 
The certification process combines             rigorous standards developed by the NBPTS with a sophisticated,                 extensive assessment process to determine whether teachers meet                 those standards.  Many teachers who have been assessed testify to               the rigor and fairness of the process and claim that the assessments            are the "best professional development activities" in which they                have been involved (Odden). 
The assessment procedure is both long             and expensive, and currently only about 40 percent of teachers who              go through it earn board certification (Odden). 
Many states are               offering incentives for certification. For example, California                  provides a one-time $10,000 bonus for board certification; North                Carolina offers a 12 percent pay raise for the life of the                      certificate; and Florida grants a 10 percent salary increase for the            life of the certificate and an additional 10 percent bonus to those             who mentor newly hired                                                          teachers (http://www.nbpts.org/where/). WHERE ARE ALTERNATIVE                 SYSTEMS IN PRACTICE TODAY?Cincinnati is believed to be the first            big-city public school district to scrap its traditional salary                 structure entirely.  Beginning in the 2002-2003 school year, all                teachers with less than 22 years of experience will be ushered into             the new plan (Blair 2000). 
The plan contains five career                      categories and accompanying salary ranges, from "apprentice"                    to "accomplished," with specific goals and standards attached to                each. Frequent, indepth evaluations will determine whether teachers             advance, stay in the same category, or slide back into a lower one.             The plan is a "knowledge- and skills-based" system, rewarding                   teachers for meeting goals set by the district rather than student              test scores. 
Denver's closely watched pilot program offers three              different pay-for-performance plans.  One is based on standardized              test scores, another is linked to achievement on teacher-made                   assessments, and the third takes into account demonstrated                      acquisition of new knowledge and skills. Twelve elementary schools              are currently participating, but so far no middle or high schools               have signed on as hoped. 
Douglas County, Colorado, has one of the             oldest and most comprehensive alternative compensation plans in the             nation.  The plan is multifaceted, combining elements of both                   pay-for-performance plans and knowledge-and-skills-based                        plans. 
The Teacher's Union Reform Network (TURN), a consortium of             21 unions around the country, is experimenting with one or more                 forms of alternative teacher compensation.  Cincinnati, Columbus,               Denver, Memphis, Miami, and New York City grant unrestricted bonuses            to staff under SBPA programs. Teachers in Los Angeles, Minneapolis,             Montgomery County, Rochester, and Toledo, among others, receive                 significant cash bonuses for earning board-certification (Urbanski              and Erskine). WHERE CAN SCHOOL DISTRICTS TURN FOR                             GUIDANCE?Odden and Kelley (1997) provide a theoretical framework            for new forms of teacher compensation and offer examples of                     compensation innovations in place around the country.  The CPRE                 Teacher Compensation Project has developed four models that                     illustrate different versions of what new pay systems might look                like. 
The Milken Family Foundation has produced a report (Solmon              and Podgursky 2000) that argues most obstacles to performance-based             compensation can be overcome. It advocates experimentation with pay             plans that incorporate key elements of knowledge- and skills-based              pay systems and performance-based systems. 
The American Federation            of Teachers (AFT), National Commission on Teaching and America's                Future (NCTAF), and Education Week are also good sources for                    research and information on alternative teacher- compensation plans             around the nation. RESOURCESArcher, Jeff.  "NEA Delegates Take            Hard Line Against Pay for Performance." Education Week  19, 42 (July            12, 2000): 21-22. -----.  "Changing the Rules of the Game."                     Education Week  (June 14, 2000): 19, 24-30. -----.  "Denver                     Pay-for-Performance Pilot Still Has Far To Go, Report Says."                    Education Week  19, 42 (July 12, 2000): 10. 
Blair,                            Julie. "Cincinnati Teachers To Be Paid on Performance." Education               Week 20, 4 (September 27, 2000): 1, 15. 
Consortium for Policy                 Research in Education at the University of Wisconsin-Madison.  "Why             Change Teacher Compensation?"                                                   http://www.wcer.wisc.edu/cpre/teachercomp/tchrcomp/whychange.htm                -----.  "Questions and Answers on Teacher Compensation and                      Skills-Based Pay."                                                              http://www.wcer.wisc.edu/cpre/teachercomp/project/tcanswers.htm                 
Kantrowitz, Barbara, and Pat Wingert.  "Teachers Wanted."                     Newsweek (October 2, 2000): 36-42. 
Kelley, Carolyn; Allan Odden;              Anthony Milanowski; and Herbert Heneman III. "The Motivational                  Effects of School-Based Performance Awards."  CPRE Policy Briefs.               Philadelphia, Pennsylvania: University of Pennsylvania, February 29,            2000. 12 pages. ED 440 473. 
Odden, Allan.  "New and Better Forms              of Teacher Compensation Are Possible." Phi Delta Kappan 81,                     5 (January 2000): 361-66. EJ 599 065. 
Odden, Allan, and Carolyn               Kelley. Paying Teachers for What They Know and Do: New and Smarter              Compensation Strategies To Improve Schools. Thousand Oaks,                      California: Corwin Press, 1997, 204 pages. ED 404 312. 
Olson,                 Lynn.  "Pay-Performance Link in Salaries Gains Momentum." Education             Week  19, 7 (October 13, 1999): 1, 18. 
Solmon, Lewis C., and                  Michael Podgursky.  "The Pros and Cons of Performance-Based                     Compensation."  Milken Family Foundation, 2000.                                 http://www.mff.org/ 
Urbanski, Adam, and Roger Erskine.  "School               Reform, TURN, and Teacher Compensation."  Phi Delta Kappan 81,                  5 (January 2000): 367-70. EJ 599 066. 
WEB RESOURCES 
The                     following links contain information on various alternative plans and            on studies as well as specific information on the plans enacted in              Cincinnati and Douglas County, Colorado. 
American Federation of               Teachers: http://www.aft.org/research/index.html 
Consortium for               Policy Research in Education at the University of Wisconsin-Madison:            http://www.wcer.wisc.edu/cpre/ 
Education Week:                                http://www.educationweek.org/ew/ewstory.cfm?slug=04cincy.h20&keyword            s compensation 
National Board for Professional Teaching Standards:            http://www.nbpts.org 
National Commission on Teaching & America's              Future: http://www.tc.columbia.edu/~teachcomm/ ----- 
A Product of             the ERIC Clearinghouse on Educational Management, College of                    Education, University of Oregon, Eugene, Oregon 97403-5207. 
This              publication was prepared with funding from the Office of Educational            Research and Improvement, U.S. Department of Education, under                   contract No. ED-99-C0-0011.  The ideas and opinions expressed in                this Digest do not necessarily reflect the positions or policies of             OERI, ED, or the Clearinghouse. This Digest is in the public domain             and may be freely reproduced. The text of this Digest may be viewed             electronically at http://eric.uoregon.edu. EA 030 657.                       **Title:** Alternative Teacher Compensation. ERIC Digest Number 142.                    **Document Type:** Information Analyses---ERIC Information Analysis Products (IAPs) (071); Information Analyses---ERIC Digests (Selected) in Full Text (073); **Available From:** ERIC Clearinghouse on Educational Management, 5207 University of                Oregon, Eugene, OR 97403-5207; Tel: 800-438-8841 (Toll-free).                **Descriptors:**  Compensation (Remuneration), Elementary Secondary Education,                   Incentives, Job Performance, Mastery Tests, Merit Pay,  Merit                   Rating,  Performance Based Assessment, Personnel Evaluation,                     Teacher Competency Testing,  Teacher Salaries                               **Identifiers:** ERIC Digests, National Board for Professional Teaching Standards             
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