Performance-Based Salaries

Performance-based salaries are a reform option for improving teacher accountability in U.S. public schools. Parents and government officials want teachers to be held accountable for their effectiveness, and different pay scenarios have been created both in the United States and in other developed countries to create systems of accountability. Whether or not performance-based pay incentives result in increased student performance has not been proven. Debate continues over how, if performance-based salaries were implemented, teachers' performances ought to be assessed, and how to award salaries.

Keywords Average Income; Global Economy; Gross Salary; Median Income; Merit Pay; Modernization; No Child Left Behind Act of 2001(NCLB); Performance-Based Pay

Overview

School district administrators work tirelessly to balance their budgets. While state and federal governments pay per student enrollment dollars toward those budgets, teacher salaries and pensions take a large percentage of those resources. While the general public may disagree, teachers are not paid higher salaries when compared to employees in other professions. Parents and government officials want teachers to be held accountable for their effectiveness, and different pay scenarios have been created both in the United States and in other developed countries to create systems of accountability. Whether or not performance-based pay incentives result in increased student performance has not been proven.

For many, becoming a teacher is a dream; it is an employment opportunity in which they can practice an education philosophy they have established while positively influencing the lives of children. For others, however, it is an employment opportunity that offers a decent wage, health benefits, a pension, and summers off. For those who are of the less dedicated bunch, employment research may be necessary before a final determination is made regarding a life's work. Studies show that dollar for dollar, teachers do not make as much as professionals in other positions, nor do they (necessarily) focus all of their time on the subject of study they regard so highly.

Teachers begin learning their craft in college, for the most part. In addition, many of those teachers graduate and find positions teaching while earning advanced degrees or specialized certifications. They teach and study their field and earn a wage respective of their education and experience. In some districts in the United States, however, teachers are earning a wage depending on their students' academic achievements. Performance-based pay structures have been offered in other nations and are becoming popular in the U.S. for the equity they claim to offer regarding teacher pay, though the idea still creates some controversy.

Historically, teacher salary has been an issue among tax-payers. Taxes increase as district budgets compensate for raises, lost state funding, and lower student enrollments. For those on the outside, a work day that lasts from 7:30 a.m. to 3:30 p.m., Monday to Friday, and an employment year that only lasts 180-190 days can seem excessively light. On the other hand, helping students develop into academically and morally sound individuals is a large task. Each state has its own specific formula for determining district budgets, and teacher salaries and pensions are factored into that formula.

There is nothing universal within the U.S. regarding how much a teacher should earn because state and local funding varies from district to district within and among states. As a result, budget disparity makes it unfair to create a blanket wage for everyone with the same credentials. One thing that does tend to be universal is the way teacher salaries are misinterpreted and misrepresented. $45,000 per year for someone who works less than half of it seems like a pretty good buck. When seriously considered, though, much more than dollars needs to be examined. Bracey (2007) responds to a paper by Greene and Winters (2007) summarizing the pay of public school teachers in the United States for the 2005 year. Greene and Winters break down a comparison between teachers, economists, and architects, and Bracey criticizes them for not reporting accurate information based on the statistics provided by the Bureau of Labor Statistics' National Compensation Survey (NCS).

How do We Measure Teacher Salary?

Bracey's (2007) biggest complaint is that the respective salaries are interpreted by the hour, and teacher salaries do appear to be greater when compared to that of other professions in that light. The rate of pay for each of the three professions is broken down hourly, showing teachers earning an estimated $34.06, architects $30.22, and economists $33.85. When calculated by hours worked per year, however, the figures flip, with architects earning $65,108, economists $72,810, and teachers $46,995. Greene and Winters claim that teachers are paid better than most other professionals based on their hourly salary; their claim is not clearly substantiated, and Bracey points out their reporting limitations (Bracey, 2007).

In addition, the original data used by Greene and Winters came from an analysis of over sixteen professions broken down into the following "skill criteria": "knowledge needed, supervision received, guidelines applied, complexity, scope and effect, personal contacts, purpose of contacts, physical demands, work environment, and supervisory duties. When these researchers compared teachers' salaries to 16 other occupations that had similar total numbers on the criteria, teachers trailed all but one, the clergy. They trailed architects by $275 a week" (Bracey, 2007, p. 634).

Leaving the Profession

A teacher new to the profession does not begin a career expecting it to end within a few years. However, those who left the profession in 2004-2005 outnumbered the teachers who moved to different schools (or from the public to the private sector) in the same year. That statistic shows the highest rate of teachers leaving their profession since data started being collected through a survey from the National Center for Education Statistics in 1988-1989 (as cited in Bracey, 2007, p. 634). Furthermore, teachers with less than three years or more than twenty on the job, those younger than thirty or older than fifty, and those making less than $30,000 or more than $40,000 were more likely to be the ones who leave (as cited in Bracey, 2007, p. 634). Finally, teachers working in both public and private schools cited similar reasons for leaving their schools: dissatisfaction with working conditions and administrative support. While public school teachers changed schools, private school teachers were more likely to leave the profession entirely and change careers (as cited in Bracey, 2007, p. 635).

The Case in New York …

Something to note with this data is that the private sector generally requires less credentials for their teachers; according to the National Center for Education Statistics (2013), during the 2011–12 school year, 56.7 percent of full-time private school teachers had only a bachelor’s degree or less, compared to 44.5 percent of full-time public school teachers. In New York State, a teacher working in public schools has three years following the acquisition of a bachelor's degree in which to earn a master's degree. Many candidates work provisionally while gaining that second degree, and teachers are required to maintain professional development standards in the way of recertification after receiving teaching permanency. In contrast, many private schools require no education past the bachelor's degree level. It may be that once teachers in the private sector leave their schools, they have limited options within the teaching profession, and that is the reason they change careers. The private sector in New York State also pays a wage considerably less than that of the public sector. On average, public school teachers’ salaries in New York State are the highest in the nation.

That being the case, teachers in the New York City public schools tend to fare worse than their counterparts in nearby counties. For the 2012–13 school year, the median salary for public school teachers (as calculated by district) started at $69,901 in the Bronx, Manhattan, and Brooklyn and ranged as high as $72,990 (Bronx), $75,092 (Manhattan), and $75,796 (Brooklyn), compared to a statewide median salary of $75,279. Salaries in Queens and Staten Island hovered around or slightly above the median. Meanwhile, median salaries in nearby Suffolk, Nassau, and Westchester Counties ranged from $73,249 to $112,870, $89,096 to $132,249, and $71,668 to $137,017, respectively (Empire Center for Public Policy, 2014).

… and Elsewhere

Between 2001–2 and 2011–12, average (mean) teacher salaries throughout the United States declined 2.8 percent when adjusted for inflation. Colorado, Florida, Georgia, Illinois, Indiana, Michigan, North Carolina, South Carolina, Virginia, and Washington State all saw declines of 5 percent of more, with North Carolina having the largest decrease (15.7 percent). Average salaries for the 2011–12 school year ranged from $38,804 in South Dakota to $73,398 in New York State. In one year, from 2010–11 to 2011–12, average salaries declined 0.1 percent nationwide (not adjusted for inflation), with Illinois seeing the largest decrease, of 10.7 percent (National Education Association, 2013).

Alternative Pay Scenarios

Enticing, developing, and maintaining effective teachers is a concern not just for the United States but for other industrial countries as well, especially in the fields of computer science, math, foreign languages, and science. As such, salary alternatives have been explored within the region and abroad. In some areas of the United Kingdom, for example, higher education costs are forgiven for teachers who work in specific areas and remain in the position for at least ten years. In addition, "[c]ountries such as Austria, Denmark, Finland, and Scotland are offering fewer benefits but higher pay for teachers--more comparable with salaries in other professions--in the early years of their careers" (Jacobson, 2006, par. 6). Furthermore, areas in Singapore that show a shortage of teachers in specific subject areas and for students with disabilities have started offering teachers supplements to their salaries for changing fields or student populations (Jacobson, 2006).

Former attempts to restructure teacher pay offer little with which to push restructuring forward. For example, "[d]uring the 1980s, states experimented with merit-pay plans that tied teachers' salaries, in part, to evaluations of their performance, and with career ladders that paid some teachers more for taking on extra roles and responsibilities. But teachers often complained that the evaluations were too subjective, and that the limited pots of money available for such programs encouraged unhealthy competition between colleagues. And when tight budget times came, such initiatives were often the first to go" (Olson, 2007, p. 14).

Something to consider here is that in most professions, the employee has little to say with regard to how s/he is evaluated or what taking on additional responsibilities should cost an employer; those decisions are made by someone else.

Performance-Based Salaries

In addition to incentives created to lure teachers to the profession, some districts are changing the way teachers earn their paychecks once on the job. Paying teachers based on their performance is a strategy that districts in the United States and abroad are discovering might benefit both students and teachers. However, paying teachers according to their performance poses many challenges, such as how that performance is assessed. While that assessment tends to be objective, it depends on student achievement, which may be impacted by variables other than how a teacher does his or her job. Also, performance based pay can focus on individuals or teams of teachers, such as all of the teachers in a grade or those working on a specific project. And districts can offer incentives other than those tied with a monetary value. For example, in a team-teaching situation, the team may receive a reduction in classes in order to prepare their students for a project or exam. Teachers may also receive promotions or public recognition for their efforts in lieu of or in addition to a financial reward, which may be a onetime remuneration or an ongoing salary increase (Lavy, 2007, p. 89).

Increasing Teacher Effectiveness with Performance-Based Pay

In a global economy, when countries compete with each other for interest in oil, consumer goods, and employment opportunities, the education sector becomes universally significant. Those in the teaching profession lie at the heart of that significance, and as such, industrialized nations want to heighten teacher performance whenever possible. Increasing teacher effectiveness, presumably, should revolve around compensating teachers for that increase (Lavy, 2007, p. 88). In order to do that, one teacher needs to prove to the public (as well as administrators) that he or she goes above and beyond what the next teacher does, therefore requiring additional compensation for what he or she offers students. The motivation would be to earn additional pay, improve student performance, and be recognized for skills that are considered valuable to the profession. Furthermore, a district that offers performance based pay will attract the teacher who is motivated by the incentive, with the result being an improvement in student performance and retention and possibly increased enrollment for the district as a whole.

Performance-based pay can also lend itself to a district's sweeping itself of mediocrity with regard to its teachers. The teachers who tend to be less productive (those who show to earn a paycheck yet find no reward in going above and beyond the minimum requirements) will find motivation within the performance-based pay structure as well. The minimalists will find themselves earning less than their more motivated peers, lacking the same opportunities for advancement, and receiving less recognition from their district administration. In addition, these minimalists may also find themselves without a job if what they instill in their students is a minimalist approach to academics. The goal is to improve student performance; if teachers cannot do that within this payment structure, they will be held accountable by losing their positions.

Implications for Performance-Based Pay

An additional concern for districts is the possibility that they might not be responsible for the performance goals or oversight of accountability of their teachers. A draft bill presented by the House Education and Labor Committee in 2007 encouraged districts to make attempts at paying teachers based on their performance (i.e., based on student test scores) as a measure to ensure the reauthorization of the No Child Left Behind Act of 2001. The two largest teachers' unions, the National Education Association (NEA) and the American Federation of Teachers (AFT), are strongly opposed to federal interference regarding how school districts should pay teachers (Olson, 2007). Whether districts choose to keep teacher salaries weighted on a traditional scale (i.e., based on education and experience) or offer performance -based incentives is currently up to each district. If every school district had the same budget, the same student population, and the same teacher credential requirements, the overarching standards of the proposed bill might be plausible, especially when evidence of teacher performance is based entirely on standardized test scores. The reality of public education in the United States, however, suggests that each district needs control over how teachers will be evaluated and on what basis they are compensated for their efforts.

One of the concerns about performance-based pay is that when it is not teams who are rewarded but individuals, and other individuals are not rewarded, competition among teachers and the havoc the competition could wreak on professional relationships can cause schools to become divided, with the payment structure backfiring on student performance. Additionally, within a performance-based pay structure, someone has to be assessing the performance. Making principals or other administrators take on that burden creates an additional stress of resources for districts. For example, if the principal is now spending all of his or her time monitoring teachers, who is putting parents' minds at ease, working with school boards, or planning for next year's budget? Also, putting administrators in the position of offering financial gain, a promotion, or job security to a teacher gives the district more power than it has traditionally had (Lavy, 2007, p. 92).

Additional concerns about performance-based pay involve a more personal aspect of education delivery. The teachers who teach because they feel a sense of internal satisfaction with the profession may find that having to prove themselves on a daily basis takes away from that satisfaction. "This threat is particularly real for teachers, who, as a group, exhibit strong intrinsic motivation flowing from the value they place on interacting with children and seeing them succeed" (Lavy, 2007, p. 93). Finally, if the goal is to improve student performance, it may seem appropriate for teachers to focus their time on students they believe have the potential to improve, making the strongest and the weakest students less warranting of the teachers' attention (Murnane & Cohen, 1986, as cited in Lavy, 2007, p. 93). Neither federal nor local governments want that as a result of any salary incentive.

Conclusion

Teachers earn their degrees and enter into a profession in which (it seems) their performance is always in question. If students are not achieving academically, it must be the fault of the teacher, even though several factors play a role in a student's success. If teachers are easy to blame they should be just as easy to praise when student test scores improve and retention rates increase. Offering teachers incentives to raise standards is a motivating enticement, but it is also a way for district administrators to keep a watchful eye on their teachers, which may be counterproductive, as it is not a scenario most new teachers consider when entering the field. Generally speaking, teachers should want to help their students improve academically. The pay, health benefits, time off, and pension can only go so far if a person is not internally satisfied with the profession he or she walks into each day. Performance-based pay is an option for school districts, but it is also a means to an end that can cause undesired results in schools.

Terms & Concepts

Average Income: The income determined by adding together all salaries and dividing the total by the number of incomes within the group.

Gross Salary: Income earned in total, before taxes, health benefits, retirement, or other benefits have been deducted.

Median Income: The income mid-point based on a group of salaries (A+B+C+D = B.5).

Merit Pay: Salary based on teaching effectiveness for specific outcomes: the highest increase in standardized test scores over a period of time, for example.

Modernization: Making standards (i.e., teaching credentials, expectations, etc.) in agreement with current beliefs.

No Child Left Behind Act of 2001 (NCLB): Legislation enacted to ensure that all students (regardless of ethnicity, socioeconomic status, or disability) have access to instructional approaches that have been proven to be successful.

Performance-Based Pay: Salary based on student achievement, improvement, and dropout rates—the results of teaching effectiveness.

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