Alternative Compensation Terminology: Considerations for Education Stakeholders, Policymakers, and the Media. Emerging Issues. Report No. 2
Author: Rowland, Cortney
Date: 2009-10-00
Type: Reports - Evaluative
Subjects: Teaching (Occupation),Compensation (Remuneration),Teacher Salaries,School Districts,Merit Pay,Incentives,Teacher Motivation,Educational Change,Program Design,Program Implementation,Program Effectiveness,Vocabulary,Stakeholders,Audiences,Communication Skills,Unions,Politics of Education

Schools, districts, and states across the nation are changing the way educators are paid. Through the Teacher Incentive Fund (TIF) and other publicly and independently funded programs, educators at every level are designing and implementing modified pay and reward structures for teachers and principals. Sometimes these initiatives are called "merit pay" and sometimes they are referred to as "pay for performance." In other situations, one might hear a program referred to as "differentiated compensation." Currently, the field uses dozens of expressions to describe these different reform efforts, including the following: (1) Merit pay;  (2) Performance pay, pay for performance, or performance-based compensation; (3) Alternative compensation; (4) Differential pay (including "knowledge- and skills-based pay"); (5) Teacher incentives or incentive pay; and (6) Teacher bonuses. The discussion about what this all means and the terms that are used to describe these efforts have taken on a life of their own. The vocabulary can be confusing and imprecise, and it potentially gets in the way of a productive discussion about the substantive issues of reforming teacher pay. The misuse of these terms by education stakeholders, policymakers, and the media as well as the frequent misrepresentation of programs based on incorrect terminology have created two unfortunate situations: (1) the terms themselves are losing meaning, and (2) reform efforts are faltering before they even begin, in part because they are incorrectly described. Although all of the terms in the list above are important for a discussion about the terminology of educator pay reform, this paper focuses primarily on the first two terms, "merit pay" and "performance pay" because they are the most commonly used when discussing programs and initiatives related to alternative compensation. Furthermore, these terms are used interchangeably, and little effort is made to distinguish their meaning. When it comes to alternative compensation terminology, particularly the use of the terms "merit pay" and "performance pay," this Emerging Issues paper puts forth the following three points for policymakers, education stakeholders, and the media to consider: (1) the Center for Educator Compensation Reform (CECR) argues for the "discontinuation of the term 'merit pay.'" "Merit pay" is an outdated term that typically refers to teacher pay based on principal evaluations, which have traditionally been rife with problems; (2) CECR suggests that when stakeholders, policymakers, and the media describe an alternative compensation system, they "use terms consistently." Those individuals working on the development and/or implementation of a program should develop a communication plan that uses clear and consistent language to describe the title, goals, and design features of the program. A well-constructed plan can ensure the consistent use of terminology and must be widely shared with the public and media. The public and the media should consider such plans when communicating about alternative compensation programs to further ensure the consistent use of terminology; and (3) CECR recommends that stakeholders, policymakers, and the media "include a description of the specific measure of performance" to be rewarded when they describe alternative compensation programs. For example, will teachers receive performance awards based on student test scores, principal evaluations, or a combination of both? Including language about specific performance measures will allow those who communicate about alternative compensation to share a clear message of program design with audiences, instead of allowing audiences to speculate about what a program entails based on general or misleading terms. Quick-Reference Glossary of Terms Related to Alternative Compensation is appended. (Contains 2 tables.