Teacher Compensation and the Employee Value Proposition

The teacher evaluation system, compensation plan, and employee/district value proposition should be aligned to maximize the effectiveness of the district or school and enable it to reach challenging performance metrics.? Indeed, one of the key systemic challenges of public-school districts is the misalignment between what the organization values and how it compensates people.

In order for the evaluation system to be meaningful and effective – that is, support the accomplishment of district/school achievement and performance goals – there should be some agreement about the employee value proposition.? This begins by aligning what the school system values with what the employees value.?

While consensus in some areas may be difficult to obtain, failure to arrive at some understanding of the employee/district value proposition will lead to perfunctory evaluations, low accountability, and a compensation plan that sends the wrong signals as to what is really valued by the community and by the school district’s constituents.

The diagram below describes a reasonable value proposition:? the organization (and community) values high quality instruction and student academic success.? It also wants its employees to be part of a professional team, working together to meet high expectations.? In return for these outcomes, the district/school agrees to pay teachers a fair salary and hire school leaders who will guide the teachers in creating a positive school culture, professionally develop the teachers, and provide teachers enough autonomy to enable them to do their best work.

But what happens if the organization is not getting the outcomes it wants and the students need?? Right now, most schools and districts compensate teachers based on years of experience and college credits earned.? Districts do this even if the teacher has mediocre quality of instruction and does not get student achievement results.? Granted, there may be mitigating circumstances, but the point is that there is a misalignment between what the system values and how it compensates its employees.

Is there a better way?? Yes.

A better way is one that honors what employees value, but still has meaningful accountability for the outcomes the organization values.? A better way is to design an evaluation system and compensation plan that is aligned with the employee/district value proposition.

In public education, there are four basic compensation plans that reflect different aspects of an employee/district value proposition: the traditional teacher salary schedule, an incentive pay system, a pay-for-performance plan, and the “hospital model” (a highly differentiated compensation plan based on the content discipline and skill set required).? Fundamentally, each compensation plan varies distinctly from the others in three main respects:

1.???? The degree of accountability the system requires.

2.???? The degree to which desired results and outcomes are rewarded.

3.???? The amount of job security employees enjoy.

The key variables for the employee/district value proposition then become the degree of accountability for outcomes, the likelihood of keeping one’s job, and the amount of compensation.?? At the risk of oversimplifying, the value proposition for both the employee and the organization would be more aligned or “fair” if greater accountability for outcomes were matched with greater compensation.? While few would argue with the last sentence, many would argue against its natural pair (the other side of the coin): employees whom the system holds less accountable should be paid less than those who are held more accountable.? The diagram below reflects this relationship between accountability and compensation.

Similarly, if the organization values student achievement and the quality of instruction, it should select a compensation plan that supports these goals.? Thus, a fair compensation plan would be

one in which the system pays for the clearly defined and measurable outcomes it wants.? From the organization’s perspective, it would not be fair to pay employees well if they could not get the results the organization needs to be successful.? The greater the contribution to performance outcomes, the greater should be the compensation.?

Finally, both the district and the employees should be honest and transparent about the “price” of “tenure” or job security.? The cost to the district is the risk of continuing to pay employees well who do not achieve what the organization values – its performance metrics.? Given what we know about public education, the risk is unlikely to be negligible, and there is a cost to the district associated with that risk.?

On the employee side, job security and the “reward” of tenure are things of value.? Many teachers prefer the traditional salary schedule because it is more predictable and less risky.? To be fair, job security and the peace of mind that comes with it, should not be treated as valueless.? In other words, a fair value proposition would balance compensation and job security:? the less the job security, the greater the compensation.???

Attaching compensation to an employee value proposition and being transparent about both the degree of accountability and job security will allow employees to determine if they are a fit for the organization and allow employers to hire employees who will most likely thrive in their culture.? Mutual agreement not only on compensation, but also on values, will ultimately benefit students.