The Merits of Merit Pay: Ten Tips on Pay-for-Performance Reform

Merit pay can sometimes seem like the third rail of educational policy: It's politically dangerous, potentially explosive, and liable to burn anyone who touches it. But now, this powerful controversy is proving to be hard to ignore as salary bonuses and peer review resurface as hot reform topics in 2008.

Pay Points

Below are ten recommendations by principals and other educators on how to implement reform and avoid catching fire:

• Make sure teachers are competing against mediocrity rather than one another. "A merit system has to incorporate a belief in teacher mentorship and teamwork," explains Hillary Miller, a former public elementary school teacher in Austin, Texas.
• Ensure that there's enough project funding in the bank to last at least five years, because a great merit-pay system a school can afford to offer for only a short time leads to disillusionment rather than hope.
• Make sure the size of the committee involved in creating the system and maintaining it is reasonable; too many voices delay decisions. (One teacher says five to seven people is a good rule of thumb.)
• "Teacher buy-in is a must," reports the Center for American Progress, in Washington, DC. In Chicago, for example, 75 percent of the teachers in a school must vote yes on a pay-structure change before the system can be instituted there.
• Judge a teacher's effectiveness using agreed-on evaluation tools, not based on how students perform on one test.
• Engage teachers in the development of an objective, rubrics-based evaluation tool. Try out the tool, and then refine and revise it.
• Offer at least 15-20 percent of base pay as a potential annual bonus. A teacher's added pay "has to be transformative," says Nínive Clements Calegari, coauthor of Teachers Have It Easy: The Big Sacrifices and Small Salaries of America's Teachers and a member of The George Lucas Educational Foundation's National Advisory Council. "You can't offer her $500, $2,000. You have to make it worth it."
• Start with volunteers for the alternate-pay program -- especially new teachers and those with five years of experience or less -- before extending the plan to veteran educators.
• Continually offer training to new and experienced peer reviewers.
• Listen to the advice administrators and peer reviewers provide, and solicit ways to improve the program.

Where It Works

Principal Yvonne Chan with students at the Vaughn Next Century Learning Center.

Photo courtesy of Yvonne Chan

One school demonstrating particular success with a merit-pay system like the one outlined above is the Vaughn Next Century Learning Center [1], in Pacoima, California.

Vaughn, a low-scoring public elementary school in its pre-charter school incarnation, implemented many of the reform tips and went on to win numerous accolades, among them a National Blue Ribbon Schools Award. The school won the award, which recognizes outstanding public and private schools nationwide, due in no small part to changes in its teacher-pay structure.

At Vaughn, Principal Yvonne Chan has instituted a system in which teachers can earn an additional $17,000 a year in performance-based bonuses. When you consider that the average elementary school teacher makes about $45,000 a year, it's obvious that that kind of money is a big incentive. "Leaving the district was a no-brainer," says Andy Carbonell of his switch to teaching sixth-grade math at Vaughn after eleven years as an elementary school teacher in the Los Angeles Unified School District.

"My base pay at Vaughn is virtually identical to the district's," Carbonell points out. "But when you include all the possible bonuses and incentives, my salary is substantially larger."

Chan offers one last tip: "Principals and administrators must opt in first."

Laura McClure is a freelance writer and editor in San Francisco.