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Contracts Put Superintendents to Performance Test

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Schools are used to people saying shape up--or else.

Now, superintendents in some districts have agreed to put their money where their mouths are.

In Philadelphia and Minneapolis, for example, the schools chiefs are under contract to meet certain performance standards, such as improving student achievement. And the stakes are high: a set payment or end-of-the-year bonus for achieving results, a dock in pay for falling short.

Other districts, including Los Angeles, are also using performance-based contracts to increase accountability, but without directly tying goals to salary or bonuses.

"People want to know the leaders of their institutions really have it on the line," said Superintendent Peter Hutchinson of the Minneapolis schools.

Mr. Hutchinson and his company, Public Strategies Group Inc., manage the district under a strict performance-based agreement. The company receives a $60,000 annual payment and earns more money only for those results it achieves.

Some Remain Skeptical

"C.E.O.'s are paid according to whether stock prices rise or profits increase," pointed out Scott D. Thomson, the executive secretary of the National Policy Board for Educational Administration. "It's the same idea."

Mr. Thomson said it is likely that more and more districts will consider such contracts.

Several other sources also argued that this is "the future" of contracting for top officials, particularly as private companies compete for the management of public schools.

But the concept of pay-for-performance has been controversial among teachers. And some officials in school administration also are skeptical.

"One of the fundamental questions I have about it is: Are [the superintendents] going to be given the resources that are necessary to meet the goals?" remarked Paul D. Houston, the executive director of the American Association of School Administrators.

Mr. Houston also said he worries that such contracts put the burden "all on oneperson to change things."

"But it's the whole place that has to change," he said.

In some districts, though, the idea is being applied to other top school brass as well as the superintendent.

The Minneapolis school board last December hired Public Strategies, a local, for-profit company, to oversee the 44,000-student district. (See Education Week, Feb. 9, 1994.)

The district was one of the first in the nation to adopt a contract holding its superintendent and other officials financially accountable for a set of objectives.

Under the company's original contract, for instance, each task was assigned a payment ranging from $1,000 to $35,000, for a six-month total of $214,000.

The district's top management team and the school board have agreed to meet performance standards and to receive financial rewards based on their success.

The experiment appears to have paid off so far. School officials recently revealed that the company had succeeded on about three-quarters of its tasks, earning about $165,000.

Last week, the board and superintendent were still working on a 1994-95 contract, which is expected to have fewer--but more ambitious--objectives, Ann Kaari, the president of the school board, said.

But district leaders have acknowledged that it could take decades to achieve their primary goal: closing the achievement gap between white and minority students.

On Their Toes

The main function of a pay-for-results contract is to keep officials on their toes. But it also forces district leaders to step back and re-evaluate their efforts, Mr. Hutchinson said.

Urban districts, in particular, have a tendency to embrace one reform after another, without a clear idea of what they hope to accomplish, some educators say.

"It helps the entire organization focus its attention," Mr. Hutchinson said, pointing out that his district had more than 50 initiatives under way when he took office.

David W. Hornbeck, the new superintendent of the Philadelphia schools, will be held accountable for producing results with a formula he advocated as a prominent national education consultant.

Mr. Hornbeck, a former Maryland state superintendent, was tapped in June to run the Philadelphia district, which has about 200,000 students. (See Education Week, June 22, 1994.)

The objectives include developing a strategic plan to boost student achievement and reviewing all curricula and instruction to determine whether they are effective, fair, and reflect the interests of the district's minority students.

The superintendent also is expected to evaluate and restructure the district's management and adopt performance evaluations.

The contract "makes it clear that accountability does have to begin at the top," Mr. Hornbeck said.

Already, the schools chief has asked for and received the resignations of about 20 top district officials. Mr. Hornbeck has the authority to decide whether those officials should stay or go based on the quality of their work as well as their job functions.

"This is a demonstration that business is not as usual," Rotan E. Lee, the president of the Philadelphia school board, said.

If Mr. Hornbeck meets the goals in the first year of the five-year agreement, he could earn a bonus of up to 10 percent of his base pay of $160,000. But if the board decides that the superintendent has failed, his salary could be reduced by 5 percent for up to a year.

"The board is also going to have its feet held to the fire," Mr. Lee said. "Because if it creates objectives that can't be met, there's something seriously wrong with the policymaking here."

Getting 'In Sync'

The Los Angeles school board and Superintendent Sidney A. Thompson also approved a pact focusing on student achievement and ongoing restructuring efforts in the massive, 640,000-student district.

In July, the board approved a two-year extension of Mr. Thompson's contract, due to expire at the end of the school year.

School officials said the decision to include performance standards is intended to give the district a sense of how well its myriad reform efforts are working.

The superintendent is expected to set goals for student performance in the district's school clusters by the end of the year, and, six months later, release a report showing progress in reaching them.

In addition, he has agreed to come up with a plan by next June that insures that within three years all schools participate in the reform plan engineered by the Los Angeles Educational Alliance for Restructuring Now, or LEARN.

The contract, however, does not specify that Mr. Thompson will receive a bonus or pay cut based on whether he meets the objectives.

The board will re-evaluate the superintendent at the end of the school year, and Mr. Thompson will review the performance of other school officials who agreed to work toward related objectives, Bill Rivera, a spokesman for the superintendent, said.

"The board's ultimate ability is to fire a superintendent or not renew his or her contract," said Mark Slavkin, the president of the Los Angeles school board. "But we don't mean these to be punitive; they're benchmarks."

The contract's "value is bringing the board and superintendent in sync," he said. "It's a statement of shared goals."

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