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Understanding Educator Compensation Systems

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One area of talent management that piques my interest (and an issue that I spend a great amount of time working on with districts across the country) is compensation. On December 31, 2011, the New York Times published an article, "In Washington, Large Rewards in Teacher Pay." It highlights the work of one of Washington, D.C.'s finest educators, Tiffany Johnson, but also compares "merit pay systems" in four districts across the country: District of Columbia Public Schools, Denver Public Schools, Miami-Dade County Public Schools, and the Houston Independent School District.

There are more and more articles being written about educator compensation, and specifically, articles that seek to compare compensation systems from different districts. I think it is important for readers to be aware that not all educator compensation programs have the same characteristics. For instance, comparing the "merit pay systems" in Washington D.C., Denver, Miami-Dade, and Houston is like comparing apples to oranges.

There are three basic types of compensation models that currently exist in public education-the traditional step-and-level system, bonus structures, and alternative compensation systems. Each of these pay programs result in different cultures, district strategies, outcomes, types of employees, sustainability plans, HR systems, and policies.

What is a Traditional Step-and-Level System (a.k.a. Single Salary Schedule or Step-and-Lane)?
Definition: A salary system (in education) in which employees' base pay increases are determined by educational attainment level and years of service.
Info: Step-and-level came about in the 1920's. The first step-and-level system was created and implemented in the state of Iowa. Today, the overwhelming majority of districts across the country operate under such a system.

What is a Bonus System?
Definition: A bonus is a one-time payment of direct or indirect compensation that is offered in addition to an individual's base pay.
Info: Many school districts that receive federal Teacher Incentive Fund (TIF) grants from the U.S. Department of Education use these dollars to create bonus systems. These systems use the traditional step-and-level structure (described above), while providing educators with additional payments for meeting specific measures, including value-added scores, evaluations, achievement scores, AYP, professional learning community involvement, completing additional professional development, student survey feedback, district goals, etc.

Here is a sample of districts that currently use bonuses (on top of their step-and-level pay system) to reward teachers:
• Houston Independent School District - Houston, Texas: Accelerating Student Progress. Increasing, Results & Expectations. (ASPIRE)
• Miami-Dade County Public Schools - Miami, Florida: Rewards and Incentives for School Educators (R.I.S.E.)
• Fort Worth Independent School District - Fort Worth, Texas: Redesign to Increase Schools of Excellence (R.I.S.E.)
• Butler County School System - Greenville, Alabama: PayPLUS
Pittsburgh Public Schools - Pittsburgh, Pennsylvania
• Longview Independent School District - Longview, Texas
• Austin Independent School District - Austin, Texas: REACH
• Dallas Independent School District - Dallas, Texas
Lebanon Special School District - Lebanon, Tennessee
• Hollow Rock-Bruceton Special School District - Bruceton, Tennessee
• Tipton County School District - Covington, Tennessee
• Shelby County Schools - Memphis, Tennessee: Project A.I.M.
• Hamilton County Schools - Chattanooga, Tennessee: Benwood Initiative
• Metro Nashville Public Schools - Nashville, Tennessee
• Bradford Special School District - Bradford, Tennessee
• Guilford County Schools - Greensboro, North Carolina: Mission Possible
• South Dakota: Incentive Fund
• Alaska Compensation Reform Initiatives - 3 District Consortium
Ohio Teacher Incentive Fund (OTIF) and Ohio Appalachian Collaborative (OAC)

What is an Alternative Compensation System?

Definition: A salary system in which employee base pay increases are determined by factors other than educational attainment and years of service. Such factors differ from district to district but (could) include components such as evaluation scores, value-added, peer evaluation, additional duties, parent/student surveys, working in a hard-to-staff subject/building, or skill attainment. Thus, people who receive high marks or are more involved get higher base increases than lose with low marks or those who are not as involved.
Info: The alternative compensation systems that currently exist across the county have been home-grown (with occasional consultant assistance) to fit districts needs. A number of these systems have been developed using Race to the Top dollars, private foundation funding, and research initiatives. However, the large majority were created through TIF grants. These compensation programs are all extremely different. Some may include bonuses as well as base increases.

There are only a handful of districts that use an alternative compensation system (some with bonuses as well) to pay and reward teachers:
• Denver Public Schools - Denver, Colorado: ProComp
• Washington D.C.: IMPACT
• Eagle County Schools - Eagle, Colorado: Rewarding Excellence in Teaching
• Putnam County Schools - Cookeville, Tennessee: Putnam County Accelerating Student Success (P.A.S.S.)
• Trousdale County Schools - Hartsville, Tennessee: Alternative Comp
• Aldine Independent School District - Houston, Texas
• Westside Community School District 66 - Omaha, Nebraska
• Lexington City Schools - Lexington, Tennessee
• Johnson County Schools - Mountain City, Tennessee

There are many strengths, weaknesses, opportunities, and challenges to consider when selecting (or altering) a compensation system. Depending on the district and its culture, these can vary. But, while the debate will continue about which type of system is best, it's important for talent managers, school leadership, teachers, parents, and all district stakeholders to remember that what's really important is whether or not your pay system matches the vision, mission, and goals of your district.

More on compensation to come...

Thom Griffith, Battelle for Kids Human Capital Specialist, contributed to this post. Thom is a Human Resources professional with a Masters of Labor and Human Resources from The Ohio State University Fisher College of Business.

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