Merit Pay… Get on the Bus?

As illustrated in the Contemporary Politics section, not all stakeholders have been convinced that merit pay is a solution to the problem of teacher quality.  Nevertheless, we believe that more teachers and researchers would be inclined to support merit pay if implemented as part of a comprehensive compensation reform with a tiered salary schedule, funding for professional development, performance pay, and incentives for high-needs positions.  Designed with stakeholder participation, we believe that merit pay, when developed as part of a larger compensation reform, should be explored and implemented on a larger scale to improve school performance.

Our Recommendation: A Comprehensive Reform System

A comprehensive reform package, designed by Harvard’s Susan Moore Johnson and John P. Papay (2009), presents the most promising framework for teacher compensation reform.  They propose to replace the traditional single-salary pay schedule for teachers with a career-oriented compensation system that aims to increase the human capital of school district employees.  The “Tiered-Pay-and-Career-Structure” system is designed to attract strong teaching candidates, support their development and skills throughout their careers, and reward successful teachers with substantial additional pay for student achievement and increased responsibilities. 

Rather than instituting a merit pay program that focuses solely on awarding teachers for student performance, Johnson and Papay (2009) recommend a variety of inducements to increase human capital in school districts. There are four main components of their proposal:

• Four Tiered Salary Structure: Teachers receive higher salaries based on their years of experience, professional attainment, and varying levels of expertise.  Teachers would advance one step annually within each tier as long as they received satisfactory performance evaluations and continued to demonstrate success with their students.
• Learning Development Fund: This fund provides teachers with financial support to pursue opportunities to acquire new knowledge and skills. This simultaneously fosters a teacher’s professional diversification and development within their career.
• Performance Bonuses:  Schools who successfully increase student achievement are awarded school bonuses.
• Incentives for High Need Positions: This includes bonuses for hard-to-staff districts, schools, and subjects (e.g. math, science, special education). 

(Johnson & Papay, 2009, p. 55).

Papay argues that this framework is responsive to the needs of teachers, challenges traditional arguments against compensation reform, and is, most importantly, adaptable to any local school district funding, personnel, or priority realities (personal communication, 2009, November 10). As such, this pay system will look different across districts, but the framework remains the same: eliminate the single-salary pay schedule which pays teachers equally despite potentially unequal performance and skills, reward school and individual performance that leads to student achievement, give teachers an opportunity to develop their professional knowledge and skills, and incentivize teaching positions that have difficult or unfavorable work conditions.  Most importantly, this plan presents a clear opportunity for districts to solicit buy-in from stakeholders, like union leaders and teachers, when the model is adapted to each district. 

Because history shows that the most successful programs are those that are developed with the consultation of their stakeholders, school districts should develop their models with the collaboration of participating teachers.  This will give stakeholders an opportunity to engage in the development and implementation of a suitable compensation reform package that best meets the needs of individual teachers and districts without altering the overall framework of the plan.  Further, it provides a learning opportunity for stakeholders to better understand how comprehensive compensation reform can support school improvement (Johnson & Papay, 2009).

This approach supports efforts to increase human capital while simultaneously rewarding teachers for a variety of achievements or professional decisions.  This plan also merges market-based plans, such as merit pay, with traditional inducement plans, such as bonuses, ultimately addressing the concerns of conventional opponents.  As of November 2009, the plan had yet to receive public criticism.  While Papay admits that this may be due to the proposal’s recent publication (personal communication, 2009, November 8), we contend that the program’s novel approach to compensation avoids the usual criticism and merits high praise. The important endorsement of AFT President Randi Weingarten strengthens this model’s credibility, especially given past union apprehension to previous attempts of compensation reform (2009).

Barriers to Implementation

Because the Johnson and Papay framework leaves many decisions to the individual school districts, there are certain considerations that must be addressed for successful implementation.  Many concerns align with traditional criticisms of merit pay.  Most importantly, districts must consider how they will fairly evaluate teachers given concerns about administrative bias, reliability and validity of teacher evaluations, and the perceived inequity of the merit pay system (E. Useem, personal communication, November 4, 2009). While merit pay (labeled “performance awards” in the framework) is only one piece of the compensation reform plan, it does require thoughtful planning to ensure fairness.  Second, districts must cultivate support for the large-scale compensation reform that this plan requires for successful implementation.  Teachers may be apprehensive given the historical failings of compensation plans, so developers must solicit stakeholder buy-in.  Districts must also consider the logistical hurdles to implementation.  These include, but are not limited to securing sustainable funding, creating an implementation timeline, establishing clear metrics for achievement, allocating personnel resources to the project’s coordination and management, marketing the plan appropriately to prospective and current teachers, and evaluating the program annually to determine effectiveness (Johnson & Papay, 2009; Heneman, et al. 2007). If districts consider these concerns when adapting this model, they will be less likely to be hindered by traditional obstacles to implementing new compensation plans.

General Conclusions and Implications

Despite criticisms for using pay to improve teacher quality, we firmly believe that the Johnson and Papay (2009) plan for compensation reform is the most comprehensive approach to rewarding and encouraging improvements in teacher performance. It addresses the traditional concerns of the single-salary pay schedule, incentivizes teachers to push themselves professionally, and blends market-based performance bonuses in a way that fosters teacher and school collaboration. This plan, when adapted to each district, provides the opportunity to address traditional compensation and evaluation concerns, especially when developed in collaboration with teachers.  Thus, this framework represents a powerful opportunity for increasing teacher quality Webmail.

Given the infancy of Johnson and Papay proposal, we believe that it is critical to experiment and evaluate its implementation in a school district to fully determine the plan’s feasibility and effectiveness.  Fortunately, school districts appear to be receiving adequate supports to soundly adopt and implement this framework.  President Obama announced his intention to significantly expand performance-based pay through the federal Teacher Incentive Fund.  Race to the Top provides incentives for states to implement programs that experiment with linking teacher pay with student achievement.  The Bill and Melinda Gates Foundation is turning its attention toward teacher quality and funding merit pay programs.  And further, AFT President Randi Weingarten has endorsed the Johnson and Papay plan, strengthening the plan’s overall popularity and credibility among collective bargaining organizations.

These supporters indicate that a sense of urgency has arrived. By adopting compensation reform packages that include a variety of incentives and inducements like the plan proposed by Johnson and Papay, we believe pay can positively affect teacher quality, satisfy all important stakeholders, and ultimately improve the quality of teachers in today’s schools.   

1. Talk with recent clients Ask agents to provide a list of what they've listed and sold in the past year, with contact information, says Ron Phipps, past president of the Chicago-based National Association of Realtors, or NAR. Before you start calling the names, ask the agent if anyone will be "particularly pleased or particularly disappointed," he says. With past clients, "I'd like to know what the asking price was and then what the sales price was," says William Poorvu, adjunct professor emeritus at Harvard Business School and co-author of "The Real Estate Game: The Intelligent Guide to Decision-making and Investment." And, if you're the seller, ask if these past properties are similar to yours in price, location and other salient features, Poorvu says. What you want is someone who specializes in exactly what you're selling. SHARE THIS STORY LinkedIn Delicious Reddit Stumbleupon Email story Another good question for sellers is: How long has the home been on the market?

2. Look up the licensing States will have boards that license and discipline real estate agents in those states, says Phipps. Check with your state's regulatory body to find out if the person is licensed and if there have been any disciplinary actions or complaints, or check to see if the information is posted online.

3. Pick a winner Peer-given awards count, says Phipps. One that really means something is the "Realtor of the Year" designation awarded by the state or local branch of NAR. "These agents are the best as judged by their peers," he says. "That's a huge endorsement."

4. Select an agent with the right credentials Just as doctors specialize, so do real estate agents. And even generalists will get additional training in some areas. So that alphabet soup after the name can be an indication that the person has taken additional classes in a certain specialty of real estate sales. Here's what some of the designations mean:

5. Research how long the agent has been in business You can often find out how long the agent has been selling real estate from the state licensing authority. Or, you can just ask the agent. "If they haven't been in business five years, they're learning on you and that's not good," says Robert Irwin, author of "Tips & Traps When Buying a Home." Ultimately, what you're looking for is someone who is actively engaged in a particular area and price range, says Phipps. You'll want to know what knowledge of those two factors they can demonstrate and "what kind of market presence they have," he says.

6. Look at their current listings Check out an agent's listings online, says Brobeck. Two places to look are the agency's own site and Realtor.com, a website that compiles properties in the Multiple Listing Service into a searchable online database. Most buyers start their search on the Internet, and you want an agent who uses that tool effectively. "A key thing is an attractive presentation on the Web," says Brobeck. You also can look at how closely the agent's listings mirror the property you want to buy or sell. Are they in the same area? Is the price range similar? And does the agent have enough listings to indicate a healthy business but not so many that you'd just be a number?

7. Ask about other houses for sale nearby A good agent should know about other area properties that are available "off the top of his head," says Irwin. Mention a house in your area that's sold recently or is for sale. If the agent knows the property and can give you a few details, that means he or she really knows your area, he says. "You want someone like that who's on top of the market."