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Pay for Performance: It Can Work -- Here's How

While performance pay philosophies and plans abound, working systems are harder to find. Education World examines systems in two Colorado districts: Denver and Douglas County. Included: Descriptions of working performance pay systems.

Pay for Performance The amount of time and effort needed to develop and implement a performance pay system is surpassed by only one thing: maintaining it.

There are school districts and teachers' unions, however, that have done the homework, created plans, launched them, and are watching them unfold. Monitoring those districts are analysts such as the Consortium on Policy Research in Education at the University of Wisconsin-Madison as well as other states and school districts that are considering similar plans.


"Developing a performance plan has to be a process, not an event," said Robert Weil, deputy director, education issues for the American Federation of Teachers (AFT) and the former president of the Douglas County (Colorado) Federation of Teachers, which has used performance pay since 1994.

For those who do decide to go forward, once a new program is designed and implemented, 90 percent of the challenge is ensuring that it works over time, said Dr. Marc J. Wallace Jr., founding partner of the Center for Workforce Effectiveness, which is allied with the Center for Policy Research. "Many fall apart after one year because people fail to administer them properly."


The performance pay system for the Douglas County Federation of Teachers (DCFT), has both stability and longevity. The purpose of the plan, according to the district, is to reward teachers for outstanding student performance, enhance collegiality, and encourage positive school and community relations.

"One of the basic ideas behind it is a strong base salary," according to Patrick McGraw, president of the DCFT. A committee comprised of community members, teachers, and administrators developed the ten-year-old system, McGraw added. "We still have an evaluation system. But we also have different ways of rewarding teachers."

The Douglas County plan includes knowledge- and skills-based pay and group-based performance pay in its salary structure. Under the skills-based part of the plan, teachers earn increases for mastering skills the district has identified as desirable. The school system provides access to skill training. Teachers must demonstrate how their work is being used to drive instruction, McGraw said, and they are rewarded for employing new skills.

Instead of annual increases based on years of experience, though, teachers only receive increases if they earn a rating of "proficient" or better on their annual evaluation. To qualify as proficient, they cannot receive an "unsatisfactory" rating in any category. Principals evaluate teachers based on classroom observations rather than test scores. Teachers also develop personal growth plans every two years.

Taking on additional responsibilities also can earn a teacher more money; building administrators decide on the payment for the extra tasks. Annual bonuses also are awarded to teachers considered outstanding performers.

And all the teachers in a school, or in a group involved in an initiative targeted to improve a student objective, can qualify for a group incentive.


Among the reasons the system functions, McGraw said, is that teachers working with administrators created it. "They all were part of the development system. It works because of the attention to detail district administrators and teachers put into it." The system also gives people who work harder a chance to make extra money. "If we were going to reward teachers with extra compensation, we couldn't use the same old system."

The pay structure has increased collegiality among staff members, as well as the number of district-level professional development programs, McGraw said. "We don't pit teachers against one another," he said. "We have building incentives; staff members set goals and have to work together."


The Denver Public Schools, along with its teachers' union, the Denver Classroom Teachers Association, is in the fourth year of piloting a performance pay system in 16 schools. But while some districts have been reluctant to tie teacher raises to student performance, that is at the core of Denver's system.

"We are not focusing on teacher skills and knowledge in the pilot -- we are focusing on student achievement," said Brad Jupp, leader of the Denver Public Schools' pay for performance design team. "We think it is doable and professionally responsible. We believe we can measure student learning with a degree of certainty. We are looking at outputs rather than inputs because of pressure from the community. The goal is to move [student scores] up percentile points. But it is hard work.

Pay for Performance

Education World examines the timely and often sensitive topic of pay for performance in this four-part series. Read the other three installments:

Pay for Performance: What Are The Issues?
The pros and cons of some of these pay-for-performance/skills systems.

Pay for Performance: What Went Wrong in Cincinnati?
A look at the crushing defeat of Cincinnati's ground-breaking teacher compensation proposal.

More States Brave Teacher-Pay Debate
Public, political sentiment prompt tries at performance pay.

"The long-term goal is to make teaching a more lucrative profession. The objective is to design a salary system that includes student achievement in determining how we are paying teachers."

A joint task force on teachers' salaries that includes five teachers, three principals, two central office personnel, and two community members has developed and is monitoring the salary system. The trial period will wrap up by June, and the task force is due to draft a proposal for a new salary structure by spring. The teachers' union and school board are scheduled to vote on the proposal in March 2004. If 85 percent of union members vote in favor, the plan will be adopted, Jupp said.

Goals for the pilot include developing a set of school performance indicators that link teacher objectives to school improvement planning and increasing communication to teachers and administrators about the revised salary system.

Criteria used to evaluate teachers, which were agreed on by the union and the school district, include student achievement, as measured by scores on the Iowa Test of Basic Skills and by criterion-referenced tests and other teacher-created measures; teacher acquisition of knowledge and skills specifically related to improved student achievement and behavior, and reviews by principals.

The traditional salary structure remains in place, but teachers can qualify for bonuses of up to $750 for each objective they meet. Each teacher decides on two objectives in consultation with the principal. Six hundred and thirty-three teachers set 1,266 objectives, of which 986 have been met, according to Jupp. Another 134 objectives were not met and 146 are pending. The pilot program is operating at 12 elementary schools, two middle schools, and two high schools.

Public expectations and concerns about accountability spurred officials in Denver to revamp a system that no longer seemed practical, said Jupp. "We are looking at more sophisticated ways of paying teachers than the single-salary schedule," he said. "The issue is not going away. Community activists are interested in it and it is continuing to surface."


Article by Ellen R. Delisio