How Should Teachers Be Compensated?

After highlighting teacher and principal salary data, and sharing it all here over the past few weeks, you might be wondering what the data told us.

Other than being a whole bunch of numbers that demonstrate the gap between teachers and principals and the loss of real purchasing power over the past six years….what more can it tell us?

What questions come to mind?

How about this: “how should we be compensating teachers given what we expect of them?” Notice the question isn’t “how much”, just how.

As a working professional, one should expect to obtain raises and promotions based at least in part on performance and effectiveness relative to the challenges faced.

That isn’t necessarily true for teachers in Alabama. Raises are restricted by steps in the schedule, and the career path for promotions too often takes great teachers out of the classroom.

Steps and promotions aside, are teachers compensated based on the challenges they face in a classroom?

The average salary data showed tremendous disparities in average teacher salaries between districts, with a range of more than $11,000 between the lowest average salary (Chickasaw City at $43,681) and the highest average salary (Mountain Brook City at $54,908) for 2015.

These disparities in average salary likely reflect the local tax resources available to fund higher salaries rather than challenges faced in their classrooms.

What We Know So Far about Teacher Compensation

Teachers in Alabama are paid based upon a salary schedule, approved by their local board of education. Many school districts pay teachers using the minimum salary schedule approved by the state legislature each year as part of their annual appropriation from the Education Trust Fund (ETF) budget.

Here’s that schedule for FY15:

Teachers advance through the salary schedule by remaining employed within the public education system for another year.

When a teacher moves from one public education system to another, credit is given for past experience in public education.

The state minimum salary schedule only allows for a monetary increase every three years, or “steps”.

The columns represent another way teachers can increase their compensation: earning a higher degree. This is known as changing “lanes”.

Some school districts give raises every year within their schedules, such as Homewood City Schools does through Step 15, when subsequent raises are given at differing intervals.

If an Alabama teacher become “nationally board certified” through the National Board of Professional Teaching Standards, an additional $5,000 per year is earned and funded through state funds. That amount is appropriated each year by the Alabama legislature and can change on a year-to-year basis.

Depending upon the district, a teacher can earn additional compensation (a.k.a., supplements) by taking on additional duties, such as serving as a department head, a club sponsor or an athletic coach. There is no standard for awarding supplements, with a few districts awarding supplements as a percentage of base salary and others awarding supplements as flat dollar amounts.

Supplements for elementary school teachers are few and far between.

All of these methods affect a teacher’s take-home pay.

We won’t discuss fringe benefits at this point except to say that currently, fringe benefits that are required to be provided to all teachers include employer (school district) contributions to the Teachers Retirement System (TRS) at $825 per active employee, and the Public Education Employees Health Insurance Plan (PEEHIP) at $780 per active employee.

Check out the Alabama Legislative Fiscal Office’s 2015 Budget Fact Book for more information on benefits and historical data.

Is the Step-and-Lane Salary Schedule the Best Way to Compensate Teachers?

While the step-and-lane salary schedule maintains fairness across a school district by minimizing favoritism displayed by those who have the authority to grant raises, folks at the national level are questioning whether this method of compensating teachers is the right way to attract, retain and reward the most effective teachers.

Yes, measuring teacher effectiveness is a controversial topic. More on that in a moment.

In “Smart Money: What teachers make, how long it takes and what it buys them“, the National Council for Teaching Quality (NCTQ) measures the salary trajectory of teachers in 113 school districts across the country and makes the following observation:

Generally speaking, the salary trajectory for teaching is characterized by relatively small, incremental raises doled out each year, serving in stark contrast to many jobs in the private sector, with its system of promotions, bonuses and relatively rapid raises.

In “Shortchanged: The Hidden Cost of Lockstep Teacher Pay“, The New Teacher Project (TNTP) identifies three major problems associated with step-and-lane salary schedules (“lockstep pay”):

1. Low early-career salaries keep talented people from even considering teaching.
2. Great teachers feel pressure to leave the classroom, while less successful ones are encouraged to stay.
3. The best teachers aren’t recognized for leading the classrooms where they are needed most.

TNTP offers this explanation of why “lockstep teacher pay” doesn’t work:

The most notable feature of lockstep pay systems is that they lack any attention to job performance. At every level of experience or academic accomplishment, you’ll find teachers at very different skill levels. Some are talented enough to pack more than a year of learning for their students into a single school year, while others struggle to reach students at all. Common sense suggests that great teachers should be earning higher salaries than those who are less effective, but in most districts all teachers get an automatic raise every year regardless of their performance. This means that in most school systems, the money devoted to teacher salaries is not actually paying for great teaching. Instead, it is paying for paper credentials and time on the job—neither of which has proven to be a reliable indicator of success, particularly beyond the first few years in the classroom. (p. 1)

This is not a pitch for performance-based pay tied to test scores. There are ways to improve compensation for teachers other than tying pay to test scores.

[But while we’re at it, here is a good post from TNTP about facts and myths related to performance-based pay.]

Instead, think of this as an introduction to seeing what other folks are doing to recruit, retain and reward effective teachers.

Disparities in Teacher Pay: Inter-District and Intra-District

The step-and-lane salary schedule, and the salary trajectory that it allows, depends in large part on whether the school district sticks with the state’s minimum salary schedule or utilizes a higher-paying salary schedule, where districts make up the difference with local tax revenue.

The variations in wealth among Alabama’s school districts is well known, but little is said about the variations of needs (and the variation in need to utilize financial resources0 within the larger school districts.

Schools within the same district can face very different challenges due to students with varying levels of needs. Using eligibility for free or reduced-price meals as a proxy for poverty among students, the following graphic illustrates how teachers in the same district, though locked in to the same salary schedule, face varying levels of challenges.

The examples in Part 2 show how the relationship between average teacher salary and levels of students in poverty, assuming that students in poverty faces greater academic challenges, is not what you would expect.

Teacher Effectiveness in the ESEA Waiver Renewal

Alabama has operated under a federal waiver from the Elementary and Secondary Education Act (ESEA) since June 2013. All states are required to submit renewals to the U.S. Department of Education (USDOE) this year. The draft of Alabama’s proposed waiver renewal was out for public input through March 31, 2015.

The third of the three principles covered in the waiver (the first is about standards, the second is accountability) outlines Alabama’s plan to ensure effective educators and leaders are in every Alabama school.

Learning gains as measured by state assessments is a part of the proposed evaluation system for teachers.

Those measures of effectiveness could be utilized in designing a compensation system for teachers that rewards effectiveness, if districts chose to move in that direction.

Check out the plan, beginning on page 116 of the waiver (page 122 of the PDF). To be clear, the waiver renewal says nothing about teacher pay, only teacher evaluations.

So What Ideas Are Out There?

Very little is said at the state level about offering teachers varying levels of compensation outside of the accepted step-and-lane schedule plus supplements (when districts can afford them).

The Alabama legislature includes the minimum salary schedule in their appropriation for education funding every year. It is ingrained in public education in Alabama that the minimum salary schedule is the way to go where teacher compensation is concerned.

Yet there are many ideas about how to compensate teachers in an equitable way that recruits, retains, and rewards effective teachers.

In “Smart Money“, TNTP recommends three principles to keep in mind when designing compensation systems for teachers:

• Raise early-career salaries, to compete with other professions for top talent. It’s especially important to make sure that effective teachers can move quickly up the pay scale in the first five years on the job.
• Offer raises for strong classroom performance, to encourage high performers to stay.
• Create incentives for great teachers in high-need schools, to get the best possible teachers in the schools with the greatest challenges.

What do you think? Would Alabama’s children benefit from teachers who are more equitably rewarded for the work they do?

Additional Resources

What follows are a few resources to get you familiar with current research on various ways to compensate teachers.

Teacher effectiveness (where learning gains in some form are a part of the measure) and performance-based pay is a component of some of these systems.

Education Resource Strategies (ERS) – Strategic Design of Teacher Compensation

NCTQ – Smart Money: What Teachers Make, How Long It Takes, and What It Buys Them

TNTP – States Are Part of the Teacher Pay Problem

TNTP – Rethinking Teacher Pay: The Role of State Policy

TNTP – Shortchanged: The Hidden Costs of Lockstep Teacher Pay