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Published in Print: August 6, 2003, as Leveraging Teacher Pay

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Leveraging Teacher Pay

How we can raise student achievement through better systems of compensation.

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How we can raise student achievement through better systems of compensation.

Schools today are under enormous pressure to raise student test scores, or, in the parlance of standards-based education reform, to educate students to high and rigorous performance standards. This goal, basically the core state education objective in all 50 states, was reinforced and given more accountability rigor by the federal "No Child Left Behind" Act of 2001, passed by Congress with bipartisan support. Accomplishing it would produce both equity and excellence gains—the achievement gap would shrink and overall levels of achievement would rise dramatically.

In pursuit of this lofty agenda, states and the federal government are focusing their attention on the importance of teacher quality, defined as excellent classroom instruction. Why? Because improved classroom instruction is the prime factor to produce student-achievement gains. Thus, the ability of teachers to improve their instructional practice and tailor it to the various needs of the more complex student population attending schools today is key to nearly all federal, state, and local education policy objectives.

What will drive improvements in instructional practice? States and districts are searching for several points of leverage. Some are making preservice teacher preparation more rigorous. Others are increasing their investments in and implementing more effective professional-development programs. All of the these are important initiatives, but they ignore the fact that as much as 50 percent to 75 percent of the education budget, by far the largest portion, is spent on teacher compensation. Doesn't it make sense for states and districts to ask how teacher pay can be leveraged to increase the excellence of instructional practice and deliver on our commitments to improved student achievement?

Changing the ways teachers are paid and raising the pay levels of the most effective and sought-after teachers are key parts of responding to the school-improvement challenge.

We believe that the answer is yes, and that is why we argue that both changing the ways teachers are paid and raising the pay levels of the most effective and sought-after teachers are also key parts of the response to this challenge.

Our proposition is quite simple: Make the teacher-compensation portion of the educational budget more effective by producing higher levels of student achievement—and thus increase the productivity of the education dollar. This objective should take a high priority during the current era of fiscal stringency that is buffeting nearly all states.


Most teachers are paid on the basis of years of experience and numbers of education units and degrees—the single salary schedule. But research shows that, except for the first three years or so of experience, these factors are not linked to student-learning gains. Moreover, teachers in high-demand areas— mathematics, biology, physics, chemistry, computer science, and so forth—get paid at the same level as other teachers, which results in both teacher shortages and lower teacher quality in these areas.

There are far better ways to spend the compensation dollar—for the individual teacher, for students, and for the education system. Knowledge- and skills-based pay structures, for example, reward teachers for acquiring the instructional expertise needed to boost student achievement. They represent the major compensation innovation that would accomplish this objective. The state of Iowa is implementing such a system statewide. Idaho has a proposal to do the same thing, and a joint committee of the Arkansas legislature, created in response to a school-finance-adequacy court mandate, is considering a similar policy. Districts such as Cincinnati, Minneapolis, Steamboat Springs, Colo., and Philadelphia, as well as the Vaughn Charter School in Los Angeles are implementing or piloting similar changes.

What is more, research is showing that the new factor used to trigger major pay increases in these systems—a measure of the actual instructional performance of teachers—is linked to student-learning gains. Sophisticated statistical analyses of the performance-evaluation scores of teachers in Cincinnati and at the Vaughn school, and of a similar performance-evaluation system in Reno, Nev., where the results are not yet linked to pay, show that the higher the evaluation score, the greater the learning gains of students in that individual teacher's classroom. Having such a factor trigger the major pay increases ensures that higher pay levels will be linked to greater student achievement.

When compensation is brought into the teacher-quality agenda, it makes the system take all elements more seriously.

Several educational systems around the country also are beginning to pay more for teachers in high-demand areas, adding yet another positive change to the teacher-compensation landscape.

Designing and implementing such new pay structures can be a challenge. It requires, first, creating a compensation strategy, and also the following:

  • A performance-evaluation system for teachers, together with rigorous teaching standards and clear scoring rubrics;
  • A new salary structure for which the major factor producing base-pay progression is teacher instructional expertise;
  • Additional pay for teachers in shortage areas, and in low-performing or geographically isolated schools;
  • A sophisticated implementation strategy, to make sure that the evaluation system works well and that teachers are aware of all parts of the new system (implementation problems are the primary culprits in the delayed implementation of the Cincinnati system); and
  • An aligned professional-development system that helps teachers learn and use the new instructional strategies.

Such knowledge and pay systems can be "topped off" by school-based performance-award programs that provide salary bonuses to all staff members in schools when the school as a whole meets preset targets for improved student performance. Such systems today must also be aligned with the accountability requirements of the No Child Left Behind Act.

When such systems are fully implemented and working, it should be clear that:

  • Professional development helps teachers learn the instructional strategies that boost student learning.
  • Teacher-evaluation scores are substantive and measure teaching practice that is linked to improved student learning.
  • The more effective teachers are the highest-paid teachers.
  • The education dollar is being used more productively.

The growing development of these new forms of compensation at both the state and local-district levels suggests that this aspect of standards-based education reform is increasingly seen as a critical element. When compensation is brought into the teacher-quality agenda, it makes the system take all elements more seriously: recruitment, selection, professional development, and evaluation. In most places, moreover, such forms of compensation also lead to higher levels of pay, thus producing a trifecta for the education system: better teachers, better-paid teachers, and higher-performing students.

Allan Odden is a professor of educational leadership and policy analysis at the University of Wisconsin-Madison and a co-director of the Consortium for Policy Research in Education. Marc J. Wallace Jr. is the founding partner of Teacher Effectiveness through Compensation, or TEC, a compensation consulting firm in Lake Bluff, Ill., and is a former partner in the Center for Workforce Effectiveness.

Vol. 22, Issue 43, Page 64

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