Executive Perspective

Performance Pay an Asset and a Distraction

by DANIEL A. DOMENECH

It all started with Ronald Reagan during his term as president. If private-sector employees could be induced to perform at higher levels by rewarding that perform-ance, why not school teachers?

Not far from the White House, in suburban Fairfax County, Va., the school system decided in 1984 to pilot merit pay. From the very beginning, the local teacher organizations opposed the plan. When Bud Spillane was hired as superintendent in July 1985, he inherited the job of implementing a workable merit pay system.

Dan DomenechDaniel A. Domenech


Today, the federal push for pay for performance is the strongest it has ever been. The Teacher Incentive Fund was established under the Bush administration in 2006. It argues that traditional teacher compensation systems are based on a teacher’s years of experience and the number of academic and/or in-service credits earned beyond the bachelor’s degree and that neither factor is closely linked with improved student performance.

The Teacher Incentive Fund received $97 million in the FY 09 budget, enhanced by an additional $200 million in the American Recovery and Reinvestment Act. The current administration makes no bones of the fact that it supports pay for performance as a strategy for placing quality teachers where they are needed most and for tying compensation to student achievement.

Part of a Process
Last summer AASA surveyed its members and found a third felt strongly in favor of considering pay for performance, a third were opposed and a third did not feel strongly one way or the other. At least 26 states are implementing either a federally or district-funded pay-for-performance plan, and that number will grow given the $297 million available. Recently, the National Education Association, the American Federation of Teachers, the National School Boards Association and AASA reached consensus on some guiding principles to be used when developing and implementing a performance-based compensation plan.

The four organizations agree that pay for performance must be a part of a systematic process for school improvement, as opposed to a stand-alone strategy. It must involve administrators, school board members and teacher groups in the initial discussions, and these groups must work together to garner community and stakeholder support for the plan. Fairfax County, with more than 160,000 students, was the first large school system in the country to implement a merit pay plan but, by the time I arrived there as superintendent in 1997, the plan was gone, the victim of politics and economic hard times.

As I sought to address the challenge posed by a growing student population made up mostly of second-language learners, minority students and children on free and reduced lunch, the need to attract and retain good teachers in high-needs schools became a priority. Unfortunately, by then merit pay had become a dirty word and its mere mention caused everyone to run out of the meeting room. Nevertheless, as I placed the finishing touches on Project Excel, our reform agenda for the lowest-performing schools, it was apparent some form of merit pay needed to be part of the school improvement plan.

The old plan was implemented systemwide and required substantial pay increases to win the support of the teacher groups. As the economy worsened, budget cuts began to take a toll on the amount available for merit pay based on teacher evaluations. Another of the guiding principles speaks to the need for the funding plan to be adequate and sustainable.

Project Excel incorporated a bonus component. The plan was limited to the 20 elementary schools participating in the project. The bonus was tied to student achievement gains, but it was not based on individual teacher performance or evaluation. Rather, it was based on schoolwide performance. If at the end of the school year the school attained its student achievement growth target, every employee in the school would receive a bonus of up to $3,000. The principal, the teachers, the office staff, the custodians, the teacher aides, each of them would receive a check for $3,000.

One unexpected effect of the bonus was that, in many of the schools, noninstructional personnel volunteered to tutor students and played a role in improving student achievement. Another guiding principle to consider when developing performance pay plans is to start with schoolwide plans, as they foster collaboration among school staff and are easier to develop and implement.

Targets Reached
We were extremely pleased in Fairfax with the success of Project Excel schools. The bonus did not accrue to base salary and was paid only when schools reached their achievement growth target. William Sanders, guru of the student growth model, helped us to develop the achievement targets. The bonus plan, in and of itself, did not turn those schools around, but it was clearly a contributing factor, along with professional development, increased instructional time and the selection of appropriate instructional strategies to match the needs of the students.

The end goal is to improve student achievement. Tying compensation to scores on standardized tests, teacher evaluations and individual teacher performance is a challenge, particularly in states with collective bargaining laws that require the plan be subject to negotiations.

Pay for performance can be a positive factor in improving achievement, but it can also be a huge distraction at a time when we should all be focused on meeting the needs of our students.

Daniel Domenech is AASA executive director. E-mail: ddomenech@aasa.org