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Merit Pay, History Repeated

The Human Resource Manager and Pay for Performance: Knowing First Cindy Pilch-EDAD 5600 University of Wyoming This paper will examine the history of pay for performance in education, the research on incentives and the pros and cons of using incentives. It will also explain how the accountability movement in education has resulted in increased pressure on HR personnel to incentivize teachers. Over the last two centuries research shows varying degrees of initiation of merit pay. The 21st century has the pendulum swaying back toward the idea of finding a way to incent teachers for student achievement.

Gratz ( 2005) discusses merit pay and performance pay being used synonymously and over a long period of time. The range of his study goes back to 1710 in England where children’s test scores in reading, writing and arithmetic determined a teacher’s salary. This practice continued in various forms through 1890, where after 30 years, the practice was determined to be unsound. By 1905 teachers were given autonomy in their teaching and were described as “assisting” students in their work. Merit pay in schools in 1928 had fallen to 18% and by the 1950’s it fell even further to 4%.

This decline was due to increased student populations. The single salary schedule came to fruition in 1921 because the National Education Association (NEA) stipulated the measures used to evaluate merit pay were unreliable. According to Gratz (2005) a small resurgence for merit pay began in the 1950’s because of Sputnik and a true commencement occurred during Nixon’s Presidency. In the 1960’s an experiment at Texarkana, AR in the use of merit pay was initiated due to the concern over the neglect of educational achievement in the urban poor.

This resurgence was followed in the 1980’s by an endorsement by President Reagan of A Nation at Risk recommendation to promote competitive salaries that were market sensitive and based on teacher performance. Today, Obama’s fiscal 2010 budget proposal seeks additional funds for Teacher Incentive programs. It allows for grants by school districts to develop programs focused on additional pay for performance (Klein, 2009). Rebore (2007) states the use of teacher incentive pay based on performance-also known as merit pay, differential pay or financial incentives has continued to be a debate in education .

Thus, as a Human Resource (HR) Manager recognizing the history of incentive pay, looking at research and synthesizing past attempts at pay for performance will help determine what has positive affects and what has not been deemed effective. Work done by Kinnucan, Zheng, & Brehmer (2006) concludes teacher experience has significant positive correlations for student achievement. Summarizing this work through a supply demand framework depicted several outcomes: • teacher-pupil ratio; 112 studies were cited and only 9 positive correlations, 14 negative with 89 insignificant teacher education. There was very little significance found for teacher education. • teacher salaries reflected 9 positive correlations, 1 negative with 50 insignificant • experience in teaching reflected 33 positive correlations, 5 negative with 69 insignificant With these correlations in mind using a meta-analysis approach and the knowledge gained by understanding the importance of per pupil expenditures it was determined that increasing experienced teacher’s salaries increased student achievement.

Another overview supporting incenting teachers’ for student performance comes from Podgursky and Springer (2007). Their research was based upon a compilation of research from a few studies done from the years 1999 to 2006. They used a qualitative study on causal effects of teacher incentive programs on student achievement. It was concluded “this literature is extremely diverse in terms of incentive design, population, type of incentive (group vs. individual), strength of study design, and duration of the incentive.

Yet in every case, the evidence suggests that teachers responded to the incentives” (p. 567). They also looked at traditional public schools, charter, private and nonreligious regular schools to identify if the use of a traditional salary schedule was prevalent. Over 90% of traditional schools use some form of schedule versus charter-62. 2%, private-65. 9%, and nonreligious regular schools-45. 1%. Summarizing Podursky et. al. (2007), it was concluded from the data ranging from 1999-2000 that private and charter schools had a significantly higher use of performance pay bonuses.

It is clarified that because these studies were short lived the overall determinations of effectiveness lie within motivation and not in sorting of teachers effectiveness. Podursky et. al. (2007) discussed the comparison of teacher performance on evaluations conducted by the principal to student achievement. It was concluded, “Research literature to date and particularly the recent work by Jacobs and Lefgren show that subjective evaluations of teacher performance are valid measures of teacher effectiveness as measured by student achievement gains. ” (p. 562).

Principal evaluations reflecting low stakes were used to acquire these results. The question still remains if these types of evaluations will continue to be of value in a merit based system. Also would a principal who would normally give a teacher a lower performance score, under regular circumstances-non-high stakes evaluations, do the same if it were linked to merit pay? Some States are beginning to evaluate their current salary schedules and take advantage of federal grants. States have been availed competitive grants from the Federal Department of Education to incent teachers.

However, this process has been difficult to cultivate because states have allowed individual districts to develop their own methods of incenting and evaluating teacher effectiveness. One model universally accepted by most states is the National Board Certification (NBC) process. Cavalluzzo, L. (2004) found teachers who had NBC increased student achievement. The National Certification Teaching Board has a following in every state and in many districts within the each state. Following this type of protocol is one philosophy, using a national model, to incent above and beyond the teacher’s salary on the salary schedule.

Texas has also examined incentive pay. The use of value-added growth, where the teacher is linked to the student by test results, is being initiated. Four districts in Texas are cited for use of performance pay to increase student achievement from 1995 up through 2008. These models have all followed some of Rebore’s (2007) criterion for effective implementation of incentive systems. These models have learned some valuable lessons (Terry-Dollens, 2008). They include the following; communication, logistics, and policy.

Communication is critical and involving all stakeholders at the beginning of the process is paramount. Communication should be ongoing, achievable, open and documented along the way. Districts should remember to discuss how student learning is the primary reason to incent teachers. Logistical changes should be re-evaluated and re-aligned to ensure districts goals are being met. Data systems to accommodate individual student data needs to be in place and teachers need to have adequate training in value-added data and how it is to be used.

In regards to policy, slowly raising the performance targets and making sure teachers know they are attainable but not allowing the targets to stay stagnant or to easy, allowing every teacher to reach the goals, is important. Use of district as well as federal money to support the initiative shows buy in and commitment. The federal grants, Teacher Incentive Fund (TIF), does not allow for the money to be used for teacher retention ensuring teachers are incented for the output criteria as stated by Ellis (1984).

Using the incentive plan to promote the district and entice new “master” teachers to the district can be a positive spillover outcome. Considering the role of all stake holders in student achievement leads the HR Manager to consider the drawbacks of incentive pay as it relates to parents, and students. Education in the United States is compulsory and public (Lavy, 2007). The normal protocol consists of students going to a school near their home. If parents do not want their child to go to his/her home school then the parent must enroll him/her in a private school or move.

A child may not get the quality education outlined in state standards if a pre-determined set of criteria focusing only on reading and math is initiated and incented (Lavy, 2007). It is reflected (Chamberlin, Wragg, Haynes & Wragg, 2002, as cited in Richardson 1999) Unless some of these are set out in terms that are so general as to be vacuous there is a real danger that such a limit will mean that important parts of a teacher’s normal duties will not be covered. If so it is very likely that some teachers will disregard some of their normal tasks. (p. 38)

Another drawback of incenting teachers lies within the school environment. Teacher to teacher and teacher to principal relationships can be negatively affected. Consider the scenario of the use of collaboration on a single incentive pay approach for each teacher. If a team approach is not considered and one teacher is incented and the others aren’t this may create unfair competition and undermine the collaborative model most schools attempt to implement (Lavy, 2007). Also, take into account the hierarchy incentive pay may play in the principal-teacher relationship.

The principal may look at the evaluation as a way to determine how a teacher is contributing to the school whereas the teacher looks at as a way to improve instruction. The principal may then have an additional source of power over the teacher and the curriculum (Lavy, 2007). Chamberlin et. al. (2002 as cited in Cohen 1986) argues …teachers may have little incentive to change their behavior in pursuit of higher income. What is worse, teachers may learn that concealing their problems and playing up to evaluators is what the organization rewards – dramatically complicating managers’ evaluation problem. p. 39) Lavy (2007) also discusses the idea of teachers’ requesting additional compensation which could then raise the cost of education. Teachers unions are another barrier when looking to use incentive pay as a way to attract and keep “master” teachers. Lobbying by the teachers’ union at the legislature has deterred legislation that would incent individual or groups of teachers. The unions’ worry that subjective evaluations might lead to a weakening of collective bargaining strategies and therefore the proposals have been rejected outright (Lavy, 2007).

As the pendulum swings back toward pay for performance it leads to the development of appropriate compensation models for teachers (Rebore, 2007). Therefore the HR Manager should be aware of best practice is in regards to incenting teachers. Rebore (2007) discusses the idea that in order for a performance incentive system to be effective the following components must be considered: 1. Effective teacher evaluation procedures 2. Training programs for management and supervisory personnel who will implement the plan 3. School board and management commitment to the plan in time and resources . Staff involvement in developing the program 5. Teacher acceptance and satisfaction 6. Adequate financing 7. Merit pay for all who meet the criteria 8. Plausible, fair, and equitable performance criteria 9. Valid and verifiable measures of results 10. Objectivity and consistency in applying assessment measures 11. Increased student learning promoted (p. 245) Rebore (2007) posits the idea of merit pay based on performance as: A reasonable conclusion concerning the relationship of money to motivation is that money definitely affects performance under certain circumstances.

Unfortunately, most school districts use a seniority-based salary schedule, which does not reward performance but rather rewards an individual’s survival for another year (p. 253). Thomas Ellis ( 1984) describes several ways merit pay is delineated. It can be part of a salary schedule: it is tiered in a way allowing for teachers who have higher ratings to move up the scale more quickly, to bonuses, to incentive pay as well as “master teacher” plans. According to Ellis (1984) there are two types of performance indicators. They include input criteria and output criteria.

The first being teacher performance and the latter being student performance. The Legislation of NCLB solidifies the use of output criteria. As student performance is looked at by the Federal Government and continued legislative appropriations of supplemental funding are availed it is the responsibility of each state to develop a test to ensure students are performing at a proficient level. The results are compared with the NAEP testing: a random sampling of 4, 8 and 11th graders on a nationally developed proficiency based test.

States are required to put in sanctions for districts not meeting the minimum requirement of proficiency set up by each individual state with the key being all students meeting proficiency by the year 2014. With proficiency levels for students so critical, the HR Manager is as an integral part of finding ways to increase student achievement by hiring highly qualified teachers. The stringent regulations and the highly publicized results of state mandated tests may lead to less teacher candidates therefore it is important to find ways to incent teachers.

Understanding 80% of district’s funding goes towards wages, planning for salaries and working on compensation packages is fundamental to hiring and retaining the best teachers (Rebore, 2007). It is the responsibility of the Human Resource Managers to ensure teachers are receiving competitive salaries and compensation packages. As the HR Manager reflects upon the history of incentive pay, the research for and against, its limited application, and the pressure from the U. S. government to increase test scores as well as its possible negative effects on teachers it is critical to have all stakeholders involved in the process.

It can’t be assumed the Superintendent or the school board will back proposals without proper information. It is imperative to remember, in every big picture presented, there are always small pockets of extreme personal interests that matter to each stakeholder therefore traveling this road blindly will lead to the HR Managers own peril. Great leaders persist until the results are clear, but they always watch where they step. The HR Manager is the human resource face for the district, teachers, students and parents. References Cavalluzzo, L. 2004). Is National Board Certification an Effective Signal of Teacher Quality? (IPR 11204). Alexandria, Virginia. Chamberlin, R. , Wragg, T. Haynes, G. , & Wragg, C. (2002). Performance-related pay and the teaching profession: A review of the literature. Research Papers in Education,17 (1), 31-49. Ellis, T. (1984). Merit pay for teachers. Eric Digest . Gratz, D. (2005). Lessons from Denver: The pay for performance pilot. Phi Delta Kappan , 569-581. Kinnucan, H. (2006). State aid and student performance: A supply-demand analysis. Education

Economics , 487-509. Klein, A. (2009). Budget would boost incentive pay, turnaround aid. Education Week . Lavy, V. (2007). Using performance -based pay to improve the quality of teachers. The Future of Children. 17 (1), 87-109. Podgursky, M. &. (2007). Credentials versus performance: Review of the teacher performance:Pay research. Peabody Journal of Education , 82 (4), 551-573. Rebore, R. (2007). Human Resources Administration in Education. Boston: Pearson. Terry-Dollens, B. (2008). Paying for Results. The Board Foundation Education.

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