Performance -Based Compensation: Design and Implementation at Six Teacher Incentive Fund Sites

Jonathan Eckert
August 2010

In 2006 the federal government enacted the Teacher Incentive Fund (TIF), a program intended to support efforts to create performance-based teacher and principal compensation systems in high-need schools. Thirty-three TIF grants are currently being used in a variety of different ways across the country, including the Teacher Advancement Program in Cincinnati and Columbus Schools, though the Ohio sites are not evaluated in this report.  Instead, this report analyzes performance-pay programs in North Carolina, Arizona, Pennsylvania, Louisiana, South Carolina, and Texas.  Through the use of interviews, focus groups, data analysis, and site visits, researchers were able to put in to words the importance of performance based pay and the key elements behind it. While the designs of these programs all differ, common themes exist.  This report spells out six themes that are necessary for any successful pay-for-performance program.  The most interesting are:

  • To be most effective, a pay-for-performance program must be a collaborative approach between teachers and principals.  Professional development and vigorous evaluations are essential to this goal. 
  • The selection of strong leaders is fundamental.  Choosing strong principals that can work closely with teachers to help them improve is absolutely necessary if a pay for performance program is going to work. 
  • Financial incentives must be directly tied to the core of an organization’s purpose.  In the case of education, financial bonuses must be tied to teacher improvement and student growth.

The above themes as well as some others in the report serve as the foundation for some very successful performance programs.  Consider Project EXCELL in Arizona’s Amphitheater Unified.  School district Project EXCELL combined teacher, principal, and district leaders’ inputs to create a system that focused on student growth, professional development, and increasing teacher retention rates.  This system led to a 9 percent value added increase at the classroom level and a 9.3 percent increase at the school level. 

Overall, this study of six TIF sites suggests that thoughtful and well-implemented performance pay programs can lead to real tangible results in the classroom.  Teacher quality has a tremendous impact on student achievement.  Schools around the country and in Ohio must figure out a method that allows for principals to identify and support effective teachers in the hope of improving student learning. 

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