Performance Contracts for Principals

To attract a new breed of site administrators, a school district offers higher pay for higher expectations and less job security by ROD PAIGE, SUSAN SCLAFANI and MICHAEL J. JIMENEZ

How can a school district committed to decentralization and high-level professional performance remove building principals who remain tied to the old way of doing things and who are unable to meet the new demands being placed on school leaders?

How can a school district committed to decentralization and high-level professional performance remove building principals who remain tied to the old way of doing things and who are unable to meet the new demands being placed on school leaders?

That was the challenge facing the Houston Independent School District during the early 1990s as we sought answers to low test scores, a high dropout rate, low public support and a rapidly increasing student population.

After our board of education in 1990 adopted a sweeping mandate for change called "A Declaration of Beliefs and Visions," the district recognized the need for a new brand of school-based leader--one who could move independently yet take action consistent with the goals of the district. As the school district took its first steps to decentralize decision-making and to shift from a culture of compliance to one that stressed professional performance, we had to make changes in management.

Similar to the private sector, we wanted to be able to shake hands and to wish administrators well when they departed the organization. Yet because of the term contracts that all school administrators had at the time, this became a daunting task. Designed to protect the rights of the administrator and enforced by the Texas Contract Nonrenewal Act, these contracts made it virtually impossible to make management changes without going through protracted legal steps. It was not unusual for cases to take longer than a year and cost more than $100,000 in legal fees and accumulated salary. (One principal accused of sexual harassment fought his dismissal for two years.) Streamlining was in order.

Waiving Job Protections
After much research, the district determined it could offer special contracts to 280 principals and the superintendents of the 12 administrative districts. The special contracts would, in effect, waive the rights of the TCNA to due process for a nonrenewal at the end of the contract, or waive the rights for due process for a finding of just cause for termination during the contract year.

While principals and district superintendents could not be forced to accept the new terms, we sweetened the option by providing a payment to those who waived their due process by signing the new contract. These payments amounted to $7,500 for principals and $15,000 for district superintendents. The school district later expanded the offer to all positions with superintendent in their title and other business positions at the same level as assistant superintendent for a $7,500 payment.

In essence, we purchased a waiver of those rights. Any newly hired administrator had to accept the contract accompanying the position. In return, the district gained the right to remove an administrator during the contact term, without cause, by simply buying out the remainder of the contract (up to a maximum of one year’s salary and a minimum of two month’s salary).

In addition, the district may elect not to renew the administrator’s contract when it expires. This option does not require school board approval, which further simplifies the process. However, because this type of contract places the administrator in greater risk, the district had to develop a process to keep the administrator apprised of how he or she was performing.

Widespread Buy-In
In December 1994, performance contracts were approved for administrators who report directly to the superintendent, including the 12 subordinate district superintendents. The following summer, performance contracts were established for all administrators, principals and above. At first, the contract was offered on a voluntary basis, and nearly 95 percent of those eligible converted to the new terms. Now subsequent administrative appointments have no choice. If the individual wants the position, he or she must accept the contract that goes with it.

During the transition, we worked hard to secure widespread buy-in to the new contract by addressing the administrators’ concerns. The most frequent question asked was, "How do I know whether my supervisor thinks I am doing a good job?" The answer was simple: The administrator must talk to the supervisor.

This discussion starts with a goal-setting conference, which we incorporated into the administrator appraisal system. The supervisor is expected to establish goal criteria, including performance standards for each principal.

Performance standards for each principal were specific including measurable objectives connected to the goals in the school improvement plan. Annually, each school’s shared-decision-making committee analyzes the school’s data for both students and adults and sets measurable objectives for the next year’s performance. These objectives specify the percentage of students passing the state-mandated student assessment, student attendance rates, teacher/staff attendance rates, improvement in the number of discipline actions, lower dropout rates and higher rates of parental participation in school activities. The principal then selects from these objectives the specific areas to include in his or her performance review with the district superintendent.

At the end of the appraisal period, the evaluation addresses the administrator’s performance in achieving the goals and standards established at the outset. We expect the supervisor and the building administrator to have periodic discussions about progress to date. This connection to the appraisal system is critical to the effectiveness of the performance contract.

The Bottom Line
On paper, this sounds like a great concept, but the real test is whether it works in practice. Have performance contracts in the Houston schools contributed favorably to the bottom line--better student achievement?

Many indicators suggest they have. From 1994 to 1998, the student test scores have risen at every grade level. In addition, the annual dropout rate has improved from 6.7 percent in 1992-93 to 2.8 percent in 1996-97. Obviously, the improvements cannot be attributed entirely to the contract. We have worked hard on several fronts, including mathematics and reading initiatives, curriculum alignment, classroom management and professional development for principals. However, we believe the contracts contributed significantly to the focus on improvement that we see in our schools and departments.

Finally, we have accomplished this without raising the tax rate for the last five years. In turn, these collective achievements have helped restore the public confidence that any school district needs to survive. We believe the communication and accountability that come with performance contracts have unified our drive toward the beliefs and visions we established eight years ago.

Parting Terms
During the past three years, four principals returned to their previous positions, one was not renewed at the end of the contract, and six were given the option of retirement or nonrenewal. In addition, two district superintendents were not renewed at the end of their contracts, and one business administrator was bought out during the contract. These smooth transitions would otherwise have resulted in acrimonious and costly legal battles.

In most instances, when a principal has been advised that the district does not intend to renew the contract, the supervisor has allowed the principal to help set the stage for departure. Usually, the principal elects to announce his or her own retirement. This saves face for the individual yet accomplishes the change sought by the district. The school district also benefits by avoiding a protracted legal battle.

We believe the Houston Independent School District is fully wedded to the change process envisioned eight years ago. We are achieving success after success, and a key ingredient of our gains has been the quality of our leaders and their focus on what needs to be done. Our successes have not occurred by accident. The performance contract has played a crucial role.

Rod Paige is superintendent of the Houston Independent School District, 3830 Richmond Ave., Houston, Texas 77027. Susan Sclafani is the district’s chief of staff for educational services and Michael J. Jimenez is deputy superintendent for human resources.