designing a performance based salary structure · • in the middle is a salary structure that...

Designing a Performance‐Based Salary Structure

Robert StonehillAmerican Institutes for Research

Julia KoppichJ. Koppich and Associates

Jackson MillerWestat

Mark FermanichAPA Consulting

Purpose

• The federal Teacher Incentive Fund (TIF) supports a series of projects to incorporate performance‐based strategies into school districts’ human capital management systems.

• The goal of the TIF program is to enable grantees to better recruit, retain, and reward effective teachers and school leaders.

• A core strategy to achieve that goal across TIF Cohort 4 projects is to create additional career advancement opportunities and a sustainable compensation system that rewards high performance.

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Purpose

• Through these TIF grants and other federal, state, and district initiatives (e.g., Race to the Top), substantial resources have been made available to implement new systems of performance‐based compensation.

• This is a unique opportunity to carefully design, pilot‐test, and implement a transparent and fair compensation system that rewards and advances the careers of teachers, in various ways, for excellent performance.

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Human Capital Management System

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Why Consider a Performance‐Based Salary Structure?

A performance‐based salary structure can promote the following:• Recruitment and retention of high‐quality

teachers• Recognition and rewards for outstanding

teaching performance• Leadership opportunities and advancement

throughout a teacher’s career• Structured activities to continually improve

teaching and learning• Alignment of compensation strategies with

district and school priorities

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Planning for a Successful Transition

The transition process must incorporate the factors that make compensation reform efforts successful:

• They are developed in collaboration with all key stakeholders, including teachers.

• They create significant incentives that achieve their objectives to recruit, retain, and reward effective teachers.

• They provide earned compensation to all who qualify.• They establish multiple pathways through which

compensation can be influenced, including improvement in student achievement in particular.

• They provide compensation transparently and predictably.

• They are sustainable over time.6

Key Steps in Designing a Performance‐Based Salary Structure

• Engage a full range of stakeholders in design work• Identify goals and design the system structure and “big

picture” • Design explicit and transparent rules for salary

advancement• Develop detailed qualifications and selection

criteria for career ladder or lattice positions• Develop a detailed implementation timeline• Ensure that there is a communications plan and that

stakeholders are regularly kept informed• Estimate system costs for at least the first three years of

implementation• Identify additional financial resources as needed• Ensure that it is working as intended through

continuous evaluation and revision7

Elements of a Performance‐Based Salary Structure

• In TIF grants, required elements include these salary advancement criteria:– Demonstrated and maintained high‐quality

teaching, measured in part by student academic growth and in part by rigorous observations of teaching practices

– In addition, the competition established competitive Priority 5, an educator salary structure based on effectiveness. To comply with this priority, applicants proposed to implement a salary structure based on effectiveness for both teachers and principals.

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Elements of a Performance‐Based Salary Structure

• TIF Cohort 4 grants require additional compensation for effective teachers, or principals who take on additional responsibilities and leadership roles, or additional compensation for effective teachers who take on career ladder positions.

• Optional elements include salary advancement through– Moving up a career ladder or across a career lattice – Taking on hard‐to‐staff assignments– Other factors (e.g., cost‐of‐living adjustments, automatic steps for novice teachers)

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Determining an Underlying Philosophy

• In the next part of the presentation, you will see a range of strategies that represent different approaches to a performance‐based salary structure.

• At one end of the spectrum is a base salary determined largely, or even solely, by teacher performance, irrespective of teacher role or seniority.

• In the middle is a salary structure that incorporates performance in whether teachers move up the scale.

• At the other end of the spectrum is a performance‐based salary structure determined largely, or even solely, by advancement through a defined career path.

• In designing your own performance‐based salary structure, you should consider combining elements from each of these approaches.

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Career Ladders

Career ladders can• Create a career pathway in an otherwise “flat”

teaching career• Acknowledge developmental levels of teaching• Reward teacher excellence• Provide opportunities for teachers to assume

leadership roles without leaving teaching• Various career ladder constructs can serve any or

all these purposes.11

Career Ladders

• Example: Cincinnati’s Career in Teaching• Cincinnati’s Career in Teaching (CIT) Program

is a collaborative effort of the Cincinnati Public Schools and the Cincinnati Federation of Teachers.

• Salary advancement is based on performance evaluations.

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Career Ladders

• CIT has five career levels:1. Apprentice2. Novice3. Career4. Advanced5. Accomplished

• Levels are incorporated in the salary schedule.

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Career Ladders

• CIT lead teachers— Are drawn from Advanced and Accomplished

levels— Have opportunities for leadership roles— Often are released from the classroom full

time or part time— Receive additional pay

The number is determined annually from an assessment of district’s needs.

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Career Ladders

The CIT Lead Teacher Panel• Governs the lead teacher portion of CIT• Has six members—administrators appointed

by the district; teachers, by the union

Responsibilities are to administer lead teacher applications, certify lead teachers, and recommend additional roles.

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Career Lattices

• Montgomery County (MD) Public Schools (MCPS) career lattice emphasizes advancement roles within teaching:

• Is part of the district’s human capital Professional Growth System

• Aligns with MCPS’s strategic plan• Is designed to attract and retain high‐quality teachers

• Is designed to promote teacher leadership for educational improvement

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Career Lattices

• Accomplished teachers, as determined by instructional proficiency and leadership skills, can become lead teachers and assume new roles and responsibilities.

• Some lead teacher positions include full or partial release time.

• All lead teacher positions include additional pay.• Lead teacher positions were developed by a multi‐

stakeholder team that included representatives of the district and the teachers’ and principals’ unions.

• Lead teachers are overseen by a Career Lattice Joint Panel.

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Developing a Career Ladder

1. Define the goals.• What do you want the career ladder to accomplish?• Tie the career ladder to district goals/instructional initiatives.

2. Determine a process for making program decisions.• Teacher task force?• Teacher‐administrator task force?• Labor‐management committee?• Specify charge, roles, responsibilities

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3. Identify levels and roles.• What levels of teaching are appropriate?• What responsibilities should be included?

4. Determine the criteria for advancement.• On what basis do teachers advance?• Are there added criteria for leadership roles?• Note: TIF 4 requires teachers to be at least “effective” to be

eligible for salary incentives.

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5. Determine compensation for career levels and leadership roles.• How much is movement to a new level worth?• What is the form of payment for leadership roles?• What about teachers who no longer meet career‐ladder

criteria?

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6. Develop procedures for evaluating teachers with leadership responsibilities.• Does the regular evaluation system appropriately appraise

performance of leadership duties?• May need to customize evaluation rubrics and procedures.• Note: TIF 4 requires evaluation to include some measure of

student achievement—important if some leadership roles are full time.

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7. Consider the costs:• Cost as teachers advance career levels• Cost to prepare teachers for specific leadership roles• Cost to train evaluators for new levels and roles

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Examples of Performance‐Based Salary StructuresA Performance‐Driven Approach

LEAP Academy (Camden, New Jersey)

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A Performance‐Driven Approach

LEAP Academy (Camden, New Jersey)• Teachers’ pay is based on the following:

– Teacher evaluations, for which 100 points are divided as follows:

• Classroom observations: 48 points• Leadership and professional contributions: 24 points• Student growth: 28 points (seven points for each of four student‐growth measures)

– Additional one‐time bonuses are available to teachers who demonstrate exemplary leadership.

• Portfolios showing evidence of leadership contributions result in an added pay increase of 0.5–1.5 percent of base pay.

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A Revised Salary Schedule Approach

Harrison School District 2 (Colorado)Five Effectiveness Levels Salary Level (as of 2013)

Novice $35,000

Progressing I $38,000

Progressing II $40,000/$44,000

Proficient I $48,000

Proficient II $54,000

Proficient III $60,000

Exemplary I $70,000

Exemplary II $80,000

Master $90,000

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Harrison School District 2 (Colorado)• Teachers receive little additional pay:

– No bonuses, stipends, or extra‐duty pay– No pay for additional hours of work– No pay for teachers to be mentors, department chairs, or hall monitors

– No pay to attend voluntary professional development– No additional pay for mathematics or science teachers

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Harrison School District 2 (Colorado)• Teachers’ pay is based on the following:

– A 100‐point scale is applied, with up to 50 points based on teacher performance and up to 50 points based on student achievement.

– Movement up the salary schedule is determined entirely by teacher performance and student performance, not by longevity or other factors.

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A Hybrid Approach With a Career Ladder

The Center for Educational Innovation–Public Education Association’s Partnership for Innovation in Compensation for Charter Schools (PICCS) TIF 4 Model:• Performance on annual evaluations leads to annual increase

on PBSS.• Performance on annual evaluations leads to advancement

on differentiated staffing career ladder or lattice. • Must receive rating of effective or higher on the composite

HEDI chart (see next slides) for salary increase or, as appropriate, career advancement.

• Charter schools select exact amounts for annual salary increase, within minimum and maximum levels based on performance evaluation, and specific criteria for career advancement.

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DIFFERENTIATED TEACHING LEVEL FRAMEWORKCohort 4 PICCS schools are using a common framework to set school‐specific policies and practices for a differentiated teaching‐level system. The purpose is to move away from hiring, retention, and promotion practices that focus on years of service or graduate‐level credits and toward a system that creates career ladders for teachers and provides compensation based on high performance over time.Aspiring teacher: A one‐year appointment for a certified teacher with no prior teaching experience who serves as an apprentice to an established teacher.Novice teacher: A continuing appointment for a certified teacher with limited or no prior teaching experience who serves as teacher of record for a classroom or cohort. Focus is 100% on classroom instruction; does not take on any additional leadership positions in the school but does participate fully in collaborative teams.Associate teacher: A continuing appointment for a certified teacher with demonstrated effectiveness within a classroom based on at least three years of evaluations at the novice teacher level (or equivalent). Primary focus is on classroom instruction and can also take on additional one‐year appointments in leadership roles such as collaborative team leader, data team coach, and other positions defined by the school.Master teacher: A continuing appointment for a certified teacher with demonstrated effectiveness at the associate teacher level (or equivalent). Serves as teacher of record for a classroom or cohort, with a primary focus on classroom instruction, and can also take on additional one‐year leadership roles such as professional learning communities coach, data coordinator, mentor teacher, and other positions defined by the school.Teacher leader: A continuing appointment for a certified teacher with demonstrated effectiveness at the master teacher level (or equivalent). Spends a portion of time providing direct instruction through a collaborative team teaching model where the other teacher is the teacher of record for the classroom or cohort and spends the other portion of time providing leadership within the school community such as directing curriculum and instruction initiatives or guiding the charter renewal application.

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PICCS TIF Cohort 4 ModelExample: HEDI Composite Rating and Score Chart


RatingOverall Composite Score

Potential Salary Increase Ranges (TIF‐funded)

Highly Effective

97–100 From $1000 (novice/associate) to $5000 (master/teacher leader)



Effective




Developing 65–74 $0

Ineffective 0–64 $030

PICCS TIF Cohort 4 Model• Additional possible compensation for leadership roles:

– A meaningful responsibility that a teacher voluntarily accepts “to strengthen instruction or instructional leadership in a systemic way, such as additional responsibilities related to lesson study, professional development, and peer evaluation.”

– Differentiated salaries for teachers in high‐need subjects; for instance, a mathematics teacher with three years of experience may be hired at a higher salary level than an English teacher with three years of experience, if mathematics is a high‐need subject at the school.


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Stakeholder Engagement inDesign and Implementation

Authentic stakeholder engagement is key to successful compensation reform. What are the characteristics of engagement?

– Creates opportunities for teacher leadership on teacher policy

– In turn, may improve teacher recruitment, retention, and morale

– Teacher engagement also leads to the following:

• Sound policy designs• Effective implementation• Sustainable reforms

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Authentic engagement may also include– Representative task forces and committees that genuinely include all stakeholders’ voices

– Automated feedback mechanisms, such as blind e‐mail boxes, hotlines, or Web‐based comment forms

– Formal and informal surveys or focus groups– Union involvement: In states with collective bargaining, salary levels and structures must be negotiated.

Stakeholder Engagement inDesign and Implementation

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Design of a Performance‐Based Salary StructureKey Decisions

Stakeholders must collaboratively resolve issues such as the following:• Which staff members will participate and whether participation will be

mandatory, incorporating experienced new hires• Entering pay• The number of salary rungs and the spread of salary levels• Performance levels at which pay is differentiated• The minimum number of years to reach the top• Consequences when performance levels are not maintained• Stipend‐generating responsibilities• How pensions will be affected• Rules about quotas

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Stakeholders must collaboratively resolve issues such as the following:• Addressing potential unanticipated consequences (e.g., teaching

to the test or feelings of competition)• Estimating costs to ensure that the system can be implemented

and sustained as designed• Identifying factors in the evaluation system that need continual

monitoring (e.g., consistency of ratings for teachers of different grades and subjects)

• Assessing how professional development addresses performance issues (e.g., supporting all teachers to improve their observable teaching skills)

Design of a Performance‐Based Salary Structure: Key Decisions

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Ongoing Implementation and Continuous Improvement: Key Decisions

Stakeholders will collaboratively tackle issues such as the following:• Consequences for performance• Procedures for appeals• Collecting feedback to improve the system• Training and communications related to the new system

• Planning for affordability and sustainability• Placing current teachers on the new schedule• Consequences if teachers do not maintain the level of performance they are being paid for

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Stakeholders will collaboratively tackle issues such as the following:• How to place new teachers with experience but no performance rating

• How teachers can move across the new schedule• Whether and when teachers will have an opt in/opt out option

Ongoing Implementation and Continuous Improvement: Key Decisions

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• Have clear goals for what the new salary structure will accomplish

• Develop a sound program design aligned with goals• Ensure broad stakeholder buy‐in• Integrate the salary structure with overall district/school improvement strategy—not standalone

• Make it operationally efficient• Make it financially sustainable• Institute process for ongoing review and improvement

Ensuring Sustainability in a Performance‐Based Salary Structure

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• Develop a flexible model that accurately projects current and alternative schedule costs at least three to five years out

• Important cost drivers include— Base salaries—Where performance level break points are set— Pay increases across performance levels— Other incentives—hard‐to‐staff schools/subjects— Grandfathering and other transition costs

Financial Stability

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Can a performance‐based schedule be revenue neutral?

• Very difficult during transition yearsOther sustainability strategies include

• Identifying new resources• Reallocating existing resources

Financial Stability

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New resources• Increases in your state’s funding formula• Local property tax “override” or “excess” levies• Grant funding

— Federal— State— Foundation/corporate

Financial Stability

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Reallocating existing resources• Retasking federal funding such as Title I or Title II• Possibility of reallocating state categorical funds to support PBSS

• Realigning general fund allocations: Could some resources be used more productively in PBSS?

Financial Stability

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Key References

Behrstock‐Sherratt, E., Rizzolo, A., Laine, S. W., & Friedman, W. (2013). Everyone at the table: Engaging teachers in evaluation reform. San Francisco: Jossey‐Bass.

Heneman, H. G. III, & Kimball, S. (2008). How to design new teacher salary structures.Madison: University of Wisconsin/WCER/CPRE. Retrieved from cpre.wceruw.org/papers/cb‐3‐salary‐structure.pdf

Milanowski, A. T., Heneman, H. G. III. (2012). Institutionalizing performance‐based compensation by revising the salary schedule. U.S. Department of Education, Teacher Incentive Fund program. Retrieved from http://www.tifcommunity.org/sites/default/files/35202_TIF_SalSched‐for508.pdf

Odden, A. T., & Wallace, M. (2008). How to achieve world class teacher compensation. St. Paul, MN: Textbook Media Press.

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http://www.cpre.wceruw.org/papers/cb-3-salary-structure.pdf

http://www.tifcommunity.org/sites/default/files/35202_TIF_SalSched-for508.pdf

http://www.tifcommunity.org/sites/default/files/35202_TIF_SalSched-for508.pdf

For More Information

TIF WebinarDate: October 17, 2013Time: 2 p.m. (EDT) Topics:

• Key dimensions of compensation policy and their implications for designing performance‐based pay structures

• Determining costs and sustaining performance‐based salary structures

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Robert Stonehill202‐403‐[email protected] Institutes for Research1000 Thomas Jefferson Street NWWashington, DC 20007‐3835www.air.org

Jackson Miller(301) 610‐[email protected] Research Blvd.Rockville, MD 20850www.westat.com

For More Information

Julia Koppich415‐661‐[email protected]. Koppich and Associates1474 11th Ave.San Francisco, CA 94122

Mark Fermanich720‐884‐[email protected] Consulting1120 Lincoln St., Suite 1101Denver, CO 80203

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mailto:[email protected]

http://www.air.org/


http://www.westat.com/



For More Information:

Visit: www.tifcommunity.org

Email: [email protected]

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