Spotlight

Experiences of an Early Adopter of Incentive Pay

by AMY A. HOLCOMBE

In less than four years, Guilford County, N.C., Schools’ strategic compensation program, known as Mission Possible, has achieved the unthinkable. Our 30 hardest-to-staff schools have been fully staffed for the past four years; teacher attrition has dropped about 25 percentage points to 11.7 percent, and student test scores have consistently risen, in some cases by 46 percent.

While impressive, these results were not easily achieved. Before you decide whether strategic compensation is the right approach for your school district, consider some of the advice we wish we had known when first implementing our pay plan.

Amy HolcombeAmy Holcombe


Tip 1: Understand Your Purpose

Two popular approaches are in use across the nation for strategic compensation. The first is differentiated pay. This type of striated pay schedule recognizes that faculty in certain licensure areas are more difficult to recruit than others. Our district is challenged to find quality math candidates but has significant numbers of social studies candidates. By paying the 120 math teachers in our participating secondary schools a recruitment/retention incentive of up to $10,000 per year, we are able to be more competitive in our recruiting efforts.

Another compensation approach is pay for performance. This approach rewards employees by paying incentives for achieving predefined results. Teachers who exceed the district’s average value-added data teacher-effect score receive additional incentives of up to $4,000.

Used together, these approaches can yield a robust strategic compensation structure. In marketing and implementing your program, you need to be clear about the purpose of each. The first addresses the issue of recruitment; the second addresses teacher effectiveness. Mission Possible encompasses both, with the emphasis on the recruitment incentive being as much as 2.5 times that of the performance incentive.

Tip 2: Learn From Others
Once you define the purpose of your strategic compensation program, it helps to find out what others have tried.

When we first sought to implement Mission Possible, there were no districts to reach out to as a resource. Now there are dozens of districts implementing such programs. Talk to them. Ask about their program design. Find out what didn’t work. Ask that important question, “What would you do differently if you could do it all over again?”

Tip 3: Strive for Simplicity
A simple model will be easy to explain, implement and evaluate. A strong program will be based on a well-defined logic model, be easily represented by a graphic and clearly communicate to employees what they need to do to achieve the highest levels of incentives.

If using compensation incentives to recruit talent, you need to be able to sell your program in 60 seconds or less. The more complex the program, the more inaccessible it will seem to potential candidates.

Tip 4: Build Consensus
Guilford held public meetings to discuss a strategic compensation model but moved into the implementation phase before gaining a critical mass of support. This resulted in district personnel having to sell the value of the program after it was already in place.

Ultimately, the model you implement may not have 100 percent support. However, there should be a broad enough understanding that any pushback will not hinder successful program implementation. Reach out to hard-to-staff school faculties, schools of education that produce teacher candidates, local businesses and politicians. Help your community to understand the need for your program as well as your proposed solutions. If you don’t do this work on the front end, you will be doing it on the back end with much greater effort expended!

Tip 5: Sell Your Program
Sell your program through a robust communication strategy. You will need to develop a comprehensive website that includes the following at a minimum: a graphic model of your program, a logic model showing inputs and outputs, a clearly illustrated compensation map, frequently asked questions, a program description and eventually a program evaluation.

On our website, we also offer a program overview video, 30 school recruiting videos, a data quality plan, a communications plan, access to our advisory team members, an online program orientation and newsletters.

And, yet, confusion still exists. We know communication is an ongoing effort and one that will always be a part of our program.

Tip 6: Set Realistic Expectations
Board members, employees, private funders and the public will expect immediate results. Set realistic expectations in advance. It is logical that test scores will not increase until teachers are in place long enough to have an impact.

Our mistake was assuming that everyone would reach this logical conclusion. Because we failed to set realistic expectations in the beginning, we put unnecessary effort into explaining why we weren’t meeting all of our goals at the end of year 1. Once we set realistic expectations, sharing our results became a celebration.

Our outcomes: Years 1-2, recruitment efforts will yield 100 percent staffed schools (we met this). Years 3-4, teacher attrition will decrease until it meets the district average (attrition rate is 11.7 percent, below the district average of 12.8 percent). Years 5-6, student test scores will increase until they meet the district average. We are now in our fourth year.

Tip 7: Develop a Data-Tracking System
Until you begin implementing a strategic compensation plan, it is impossible to estimate the time and expense of tracking program data. At a minimum, you will need a programmer to create a tracking system, a database architect to design the data repository, and a data manager to track new hires, resignations, changes in salary status, leaves of absence, days employed, requirement fulfillment, etc.

Our database contains more than 100 data points per employee, and our data manager spends 100 percent of her time keeping our records accurate. Without accurate records, we could not administer this program with integrity. While seemingly simple, this one tool is what allows us to operate so smoothly.

The most important learning is that each district has unique needs, and a successful compensation program will speak to those needs. Strategies that work for one district may fail in another and vice versa. As we move forward with our own program, we have found our colleagues and policy experts an invaluable source of advice and information. But in the end, the best advice came from our own employees.

Amy Holcombe is executive director of talent development for the Guilford County Schools in Greensboro, N.C. E-mail: holcoma@gcsnc.com