HAYIDION The Prizmah Journal

Change Leadership: Re-thinking Pay for Performance

by Patrick F. Bassett Issue: Teacher Retention & Development
TOPICS : Leadership

Each year at the Institute for New Heads, I give the school leaders some sardonic advice: “If something goes terribly awry, and you need to buy time to rectify it before your parent body finds out, suggest a change to the dress code. This tactic will keep parents embroiled for at least 18 months, so you can fix the problem you need to hide while the parent body is distracted.” Next July for the new group of heads, I’m going to add a similar strategy for the faculty: “If you need to implement a change that will, like all change, cause gnashing of teeth and drawing of battle lines, do it after you form a task force to study changing the compensation system to a merit pay model. The faculty will be so annoyed and preoccupied by trying to ameliorate that offense, the other change will seem minor by comparison.”

Despite historic and gigantic resistance, performance pay initiatives in the public school sector have taken off in the US in the last three years.

By now, we know why what is standard practice in the business world, basing pay on individual performance, is anathema to most faculties. Because…

…effective schools are dependent upon a climate of collegiality, a climate faculty members assume will be undermined by head-to-head competition for a limited resource, performance pay.

…faculty evaluation systems, even those created by the faculty themselves, become suspect as subjective if used to determine pay rather than their rightful purpose, professional growth and development.

…many faculty members assume that no administrator is remotely qualified for or objective and fair about assessing the performance of the craft of teaching.

…the one most objective yardstick of teacher performance, student performance, is not easily tied to the singular factor of a teacher: Some of the best student achievement occurs when teachers simply get out of the way of brilliant students. Some of the worst student performance occurs despite the heroic efforts of great teachers, because other factors derail students. And much of the salubrious impact of teachers is delayed, sometime by decades.

…as Andy Guess notes, “Not everyone agrees what exactly ‘merit’—or ‘performance,’ or ‘incentive pay’—entails.”

The bright side of the change to the Millennials: They are incredibly idealistic, task-oriented, ambitious, and risk-tolerant.

Kimberly Merriman writes that while 85% of Fortune 1000 companies base at least part of employees’ pay on group or team performance, based on the theory that this compensation strategy will increase the effectiveness of teams, in fact, individuals prefer individual pay systems because they don’t trust their colleagues to be effective and think it unfair that their pay be tied to someone else’s performance. So even team-based performance pay, which some schools also use, doesn’t quite achieve what management intends for it to achieve: boost performance of individuals and teams and reward achievement, since it often engenders distrust and exasperation rather than trust and teamwork. (And in fact non-compensation rewards seem to work better for teams: praise and spotlighting team success.)

James W. Guthrie and Patrick J. Schuermann observe that despite historic and gigantic resistance, performance pay initiatives in the public school sector have taken off in the US in the last three years, with more than $500 million allotted for this year along for performance pay plans, affecting at least 10 percent of teachers nationwide. While enthusiasm among policy-makers and pundits grows, the research jury is still out on whether or not such systems in the public schools achieve either of two typical goals: increasing student achievement and attracting a broader base of talent into the profession.

As I frequently observe (and
occasionally experience), “No change agent ever goes unpunished.”

So why would and should school leaders wade upstream against the tide of faculty resistance? Because downstream a storm is brewing:

  1. Board Demands for Strategic Accountability: Boards, typically consisting of a good number of business leaders, rightfully insist on maximizing their investment in salaries and benefits and increasingly understand that fixed scales remove any incentivizing levers for change and progress. Instead of pay scales on a step system that favors years of experience and advanced degrees (neither of which necessarily correlates with superior performance), enlightened boards ask school leaders to develop a compensation philosophy, one that addresses the key desired outcomes for pay: a) attracting and retaining talent; b) incentivizing change and thereby moving the institution forward; c) rewarding initiative and performance.
  2. Higher Benchmarks for Salaries: Starting salaries for public school teachers have a new national benchmark: $42,500 for 2008-09, established by the Denver Public School system, and rooted in a pay for performance model supported by the teachers union, ProPay. Since all independent school teachers (and their spouses who have an interest at stake) benchmark their salaries against public school norms (national or local, whichever is higher), a new high water mark has just been set, especially for those schools that recruit nationally. If we’re going to have to pay more, we may as well try to get more, the reasoning goes.
  3. The War for Talent: The competition for talent is heating up, significantly. The baby boomer teachers, largely highly talented women, are about to retire. Since women of that generation had few career options other than teaching or nursing when they entered the job market in the late 60w and early 70s, public and private schools benefitted, and both systems had a heavy proportion of exceptionally bright teacher candidates (with high SAT and GRE scores and grades, a proxy for stellar verbal abilities necessary for effective teaching, graduating from the top of their classes at selective colleges and universities, a proxy for achievement-orientation, ambition, leadership, and success-orientation). Now, given the wide-open career opportunities for women (and minorities), the prospective teacher pool from education schools is weak: students with the lowest SAT-scores in the weakest programs of the least selective colleges and universities. The one exception: Teach for America, where America’s “best and brightest” sign up for combat duty in American’s most challenged schools. Note to self: the attraction for these bright stars is two-fold: the opportunity “to give back” after receiving so much; the distinction of being chosen into a very, very selective program.
  4. Accommodating the Millennials: Our own children and students graduating from college now have introduced some incredibly difficult challenges to the workplace. If the research on the Millennials is correct (and early experience with them in the marketplace seems to indicate it is), this next generation of teachers will be much more demanding of higher salaries, more rapid advancement, and more options for creativity and leadership. (This is why they all want to work for Google.) So a traditional step system of compensation that only rewards, slowly, years of experience and advanced degrees is less likely to attract the talent we’ll need and want. What we can anticipate from the new work force is that it will be less institutionally loyal, and more transient. The bright side of the change to the Millennials: They are incredibly idealistic, task-oriented, ambitious, and risk-tolerant, all of which will make change, including compensation-system change, more achievable and agreeable.
  5. A New Value Proposition for Schools: NAIS’s call over the last several years for re-engineering school finance in the name of financial sustainability has migrated beyond being “relevant” to becoming “urgent.” Both NAIS and ISM (Independent School Management) for years have been noting that schools can only have two of the three following factors simultaneously in play: small classes, high salaries, and modest tuition increases. NAIS’s take on this equation is that “small classes” is a proxy for “individual attention”; “high salaries” is a proxy for “high quality faculty”; “modest tuition increases” is a proxy for “access and affordability.” For the last two decades, independent schools have committed to the first two factors at the cost, literally, of forsaking the third. What our trend lines have intimated, the current economic crisis has punctuated: Many schools have hit or passed the “price-break” point where demand has softened because price has put their service out of reach of all but the most affluent. So the future calls for choosing a different pair of factors: high salaries and modest tuition increases, with larger classes (or at least more efficient ratios of students: faculty and students:total staff, however achieved). Since the research is compelling that class size up to 22 – 25 has no bearing on student or school success and achievement, at least in independent schools and probably in all schools (except for LD programs), most schools have some significant wiggle room in changing the equation. And the bright spot here: we can change the equation for the next generation of teachers more easily than for the current generation about to retire.

We should create more leadership opportunities that allow teachers to stay in the teaching track.

So, once school leaders find themselves in the pay for performance stream, up to their elbows in the rushing waters, what are the “lifeline” strategies they can safely grab onto?

Salaries: Higher Starting, Lower Top, Compressed Middle: One rather evident opportunity is to flatten the scale and range of salaries, since most attrition happens at the front end (three-to-five years as a teacher, leaving the profession) and mid-career (10-15 years as a teacher, moving to a new school with higher pay and some leadership opportunities). This will happen naturally as the highest paid teachers retire and the lowest paid teachers are paid higher starting salaries, but school leaders should plan for it and leverage it proactively as part of their “war for talent” recruitment strategy. The simplest “pay for performance” shift is to compressed pay scale. The “new take” will be that the range of pay is not so widely disparate because everyone does about the same work and because one’s position is the variable, not one’s pay. That is to say, if an individual teacher is not performing to the high standard that the relatively high pay demands, then “counseling out” becomes a more compelling management obligation.

Leadership Opportunities: A systemic weakness of teaching as a profession is that there are no advancement possibilities, unlike virtually all other professional careers. We should change that immediately by creating more leadership opportunities that allow teachers to stay in the teaching track (and not forsake teaching to jump to administration just to have leadership and higher pay options). I’m imagining schools where beyond “department chair,” we’ll have many more leadership options that even young teachers will have a shot to fill: grade-team leader, curriculum specialist, new teacher mentor, grade dean of students, lead coach, etc. These leadership options would include title (i.e., status), recognition, and additional compensation.

Hybrid Systems: By posting a query on any school leader listserv, one can find scores of schools that have experimented, many successfully, with the various “pay for performance” options to a fixed scale, namely three alternatives:

  • “bonus” systems (the corporate model of rewarding outstanding individuals or teams)
  • “overlapping bands” (the professions model of flexible and overlapping ranges based on workload and skills)
  • “faculty rank” ladders (the university model of ascending ranks where “up or out” forces quality assessments at various career stages)

NAIS encourages school leaders and the task forces they form to imagine alternatives to these three basic models, including hybrids. The least divisive and most acceptable first step may well be a hybrid approach, incorporating the essence of all three models in a “more pay for more work” approach, a more consciously driven transitional stage of doing what schools have done informally from the beginning: find ways to reward the “stars” in the system outside of luring them into administration and out of teaching. This works as the administrative team annually assesses the “high performance/good attitude” members of the faculty and invites them into a newly created leadership role or heavier schedule, in addition to the teaching responsibilities, not in place of them. Who, at whatever age and stage in their career, can teach larger classes, take on more sections (e.g., six sessions meeting four times a week rather than five sections meeting five times a week), take on additional leadership roles, coach more athletic and other extracurricular teams, adopt more technologies into their classrooms, invent more creative lessons, etc.? This change strategy has always worked in the past because base salaries progress with the system in place and don’t jeopardize the system that other faculty members favor, but “rewards” gravitate to the all-star performers who are identified and recruited by school leaders. And those rewards and additional assignments are annually determined rather than permanently incorporated into base salary, so renewals of the rewards are dependent on performance.

Change Leadership Strategies: The greatest impediment to any change in schools (and in many churches, synagogues, and mosques) is the cultural attachment to consensus. For complicated cultural and psychological reasons, even schools and religious institutions that are deeply liberal in social issues tend to be deeply conservative about organizational change, so the decision-making process tends to be inherently weak, since consensus is the enemy of change. One “change management” strategy is to proscribe what decisions get to be made consensually, and what get to be made administratively. Just that one cultural and operational change would take schools upstream on any number of issues, without the same two costs of consensus decisions: a) initiative regression to the mean (“watering down” to the point of acceptability and thereby removing the most salient elements); b) the change curve downside: collateral damage to collegial relations among faculty, including anger, hostility, sadness, mourning, depression, subversion by those who oppose the change in the discussion and resist it in implementation and practice by their colleagues. So how about a new pay-for-performance system that is voluntary, at least during a pilot, transitional period, targeting early adopters and forsaking the one-size-fits-all approach of most consensus-based policy changes? For example, a school could require all new hires to be on the new pay-for-performance system and give current employees a choice: Choose security at a fixed annual cost-of-living increase to salary, or choose pay for performance, with one’s raise attached to the school-defined performance criteria, essentially a “pay-at-risk” option that would punish poor performance with no pay increase (and probably probationary status) but reward good performance with a pay increase well beyond COL.

As I frequently observe (and occasionally experience), “No change agent ever goes unpunished.” So the risk for leaders is one that they knowingly signed up for: to lead. Leadership requires change because change in the external and internal environment is inevitable and constant. Standing still in the stream means getting behind. To avoid change leadership is to manage rather than to lead, to be the caretaker and not the visionary. Since compensation is the driver of all school budgets and will be forever, change leadership is in the arena of compensation strategy is no longer an option. ♦

Patrick F. Bassett is the president of the National Association of Independent Schools in Washington, DC. He can be reached at bassett@nais.org.

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Teacher Retention & Development

Teachers are the most precious resource of any school. The measure of a great school is its ability to recruit and retain great teachers who know their subject and craft, care deeply about all their students, and are passionately committed to their own development and the school as a community. Here, find guidance for finding, preparing and evaluating teachers, and keeping them happy and productive stakeholders.

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