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Ohio's Guiding Principles for Alternative Compensation Systems -- By Educators, For Educators

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Over the past six months, I have had the extreme honor of working with the Ohio Department of Education, four Ohio County Educational Service Centers, and the American Institutes for Research, as well as teachers, union leaders, principals, HR employees, and central office staff from 21 Ohio public and charter school districts to create guiding principles for local and state education leaders who wish to explore, design, and implement an alternative compensation system (ACS). After sharing the group's report at Ohio's Annual Statewide Education Conference earlier this month as well as through presentations at other events outside the state, I realized that many people are eager for more information about alternative compensation in education.

Why Alternative Compensation in education?

In an ACS, base pay increases are calculated using multiple measures (such as performance, additional duties, years of experience, and degrees) in contrast with the traditional step-and-level system in which pay is based solely on years of service and advanced degrees. You may also hear these models referred to as alternative salary schedules, differentiated pay, or (incorrectly) merit pay systems. Alternative compensation systems can be used in a variety of ways to help improve organizational and employee performance. The group of educators I worked with in Ohio developed a list of 13 reasons why districts and states should explore alternative compensation.

1. Better align pay with the strategy and goals of the district
2. Increase student growth and achievement
3. Attract new talent
4. Retain top talent
5. Be competitive in acquiring new talent when competing with other districts and other professions
6. Recognize exceptional work
7. Allow participants to control their pay
8. Incent staff to participate in personal and professional growth activities
9. Ensure pay systems reflect research on educator effectiveness
10. Gain support from stakeholders and the community
11. Increase fairness
12. Focus on financial sustainability
13. Meet legislative requirements in some states
(Note: Alternative compensation is not currently required statewide in Ohio. However, school districts in Florida, Louisiana, Indiana, and Michigan are required by law to build such systems.)

How were Ohio's ACS guiding principles developed?

Members of the Ohio ACS group participated in a blended learning experience that included:

• Attending a conference to learn more about how alternative compensation is part of a comprehensive human capital system in education;
• Engaging with speakers from the Ohio Department of Administrative Services, Emerson Network Power, and Battelle Memorial Institute to better understand how state government, the business community, and nonprofit organizations look at total compensation, rewards, and strategy;
• Taking a series of online courses around strategic compensation in education, as well as participating in an online chat board and various group discussions, reflection and activities; and
• Studying models and measures being used across the country and listening to recorded webinars from districts that have engaged in this work.

The group also did a ton of reading on the topic of compensation in education. A few articles we read were:

• "Alternative Compensation Terminology: Considerations for Education Stakeholders, Policymakers, and the Media," an October 2009 Emerging Issues report on the Center for Educator Compensation Reform website by Cortney Rowland and Amy Potemski of Learning Point Associates.
• "Guiding Principles for Teacher Incentive Compensation Plans," a February 2011 report developed jointly by the American Association of School Administrators (AASA), the American Federation of Teachers (AFT), the National Education Association (NEA), and the National School Boards Association (NSBA).
• "Institutionalizing Performance-Based Compensation by Revising the Salary Schedule: Introductory Overview and Design Principles for Revising the Single-Salary Schedule," a March 2012 paper written by Anthony Milanowski and Matthew Graham of Westat and Herbert G. Heneman III, professor within the graduate school of business and Wisconsin Center for Education Research at the University of Wisconsin-Madison.

The Result
The group's report "Guiding Principles for Alternative Compensation System Exploration, Design, and Implementation" helps answer the following questions for state and local education leaders:

Explore: What should my organization consider when investigating an alternative compensation system?
Design: What should my organization consider when building an alternative compensation system?
Implement: What should my organization consider when it comes to executing an alternative compensation system?

Through Ohio's Race to the Top initiative, districts have the opportunity to apply for funds to design and implement an alternative compensation system with a team of teachers. Once districts have begun this work, I will make sure to share their progress.

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