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Published in Print: March 1, 2005, as Weighing the Merits

Weighing the Merits

Several states are implementing pay-for-performance plans.

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Some 37.1 percent of education spending was earmarked for teachers in 2001-02, according to the American Federation of Teachers, and most of that money was paid out using traditional compensation systems. But as expectations for accountability increase, a handful of states are looking to pay-for-performance systems to attract quality teachers—and, increasingly, to reward them based on their students’ achievements.

“Static steps and lanes won’t entice Generation Y and ‘echo boomers’ into the classroom,” says Chas Anderson, Minnesota’s assistant education commissioner for finance and administration.

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“Dollars & Sense”

Most pay-for-performance efforts are in their infancy, are hampered by budget constraints, or involve only a few schools or selected local districts. But six states have launched their own performance-based systems that compensate teachers for demonstrating specific knowledge and skills in the classroom, according to Education Week’s survey of all 50 states and the District of Columbia. Of those six states, four also offer programs that reward teachers based on their students’ achievements. A seventh—North Carolina—offers lump-sum cash awards tied directly to student performance under its own accountability system.

Twenty-six states also now offer incentives—such as bonuses, education aid, or housing assistance—to attract people to such hard-to-staff subjects as mathematics. Fourteen have similar enticements for teachers who agree to work in high-poverty or low-performing schools. But it’s the pay-for-performance question that’s drawing the most attention.

Arizona, Delaware, Florida, Iowa, Minnesota, and New Mexico all offer performance-pay initiatives that reward teachers for demonstrating specific knowledge and skills, but the details vary by state. New Mexico, for example, has a three-tiered licensure system, under which teachers are observed in the classroom and must complete professional development dossiers; satisfactory scores allow them to advance to the next tier and receive higher pay. Minnesota provides money to districts that have developed state-approved alternative compensation systems that encourage teachers’ ongoing improvement.

Five states—Arizona, Florida, Iowa, New Mexico, and North Carolina—have pay-for-performance plans that link teacher salaries to student outcomes. North Carolina’s may be one of the most ambitious: The state awards financial incentives to entire schools that meet or exceed projected student academic growth, giving $1,500 to each teacher in a school that achieves “exemplary” status under the state accountability system and $750 to each teacher in a school that meets expected growth. North Carolina has budgeted more than $100 million for the awards this school year.

In other states, tight budgets have limited or completely stopped proposed pay-for-performance plans. Oklahoma has had an incentive-pay program on the books since 1990, but a lack of state funds has prevented districts with approved plans from implementing them. And in Iowa, budget constraints have prompted state officials to implement only the first two levels of its four-tier “career path” program, which includes a series of skills that teachers must master and demonstrate through performance evaluations before they can advance.

Additionally, more than a half-dozen states are working with an outside philanthropic organization to provide incentives. As part of a comprehensive career-development plan, the Milken Family Foundation’s Teacher Advancement Program rewards educators for acquired knowledge and skills as well as growth in student achievement. A study of TAP schools in Arizona and South Carolina found that they outperformed nonparticipating schools more than 60 percent of the time on test scores.

Vol. 16, Issue 05, Page 22

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