Monday, November 21, 2011

Merit Pay

Last week, I was contacted by a government student at Worthington Kilbourne High School who was doing a paper on Merit Pay. He wanted to interview me as his teacher told him I was a proponent of Merit Pay. Because of the difficulty in scheduling, I told him to send me a list of questions and I thought the responses might be an interesting blog post. Here are the questions (and answers) from the "interview". The questions are in normal type and the responses are in bold.

1. How do you feel about the current, mostly seniority based system for determining teachers pay and why?

Before answering this question and some of the others, I think we need to reach some understanding of why people get paid what they get paid. Why does Mark Sanchez, QB for the New York Jets, make 15 million dollars per year while the guy selling beer in the stands makes $10/hour. How and why do corporations pay what they pay.

This is a complicated question but the short answer is that in the United States and in most capitalist societies, there is a law of supply and demand. If the New York Jets could hire a similar quality quarterback for less than they are paying Sanchez, they would do it. If you couldn't find workers willing to sell beer in the stands for less than $20/hour, you would have to pay that much to attract workers.

Now let's look at teachers. How much do we have to pay to attract quality teachers into the profession and retain them once they are employed? There answer is - no one knows because a free market does not exist in the education profession. In a perfect world, since we are using public taxpayer dollars, we would pay exactly what we must to attract the quality we desire, no more and no less. Lacking a free market, there is absolutely no correlation between what you spend and what you get. You can spend $90,000/year and get a horrible teacher who makes that much money because they have been there 30 years, and you can spend $40,000 to get a fantastic teacher who works 5 times as hard but makes that much money because they just started teaching. Furthermore, because there is no free market, experienced, quality teachers cannot go to other districts and negotiate their own raises. In fact, after about 10 years in the business, teachers are forced to stay in their current districts or take a pay cut.

There is also the reality that some teaching jobs are harder to fill than others. In Worthington, we needed to hire a high school physics teacher. We received 3 applications of which we thought 1 was qualified. Each year, we also need to hire elementary school classroom teachers. We get literally hundreds, perhaps thousands of applications for each one of these positions. Clearly, this is because the person qualified to teach high school physics is also qualified to work in the private sector, and those jobs pay more so few qualified individuals want to go into teaching. I want to pay high school physics teachers more so I can attract them to Worthington but I am not permitted to do so by the seniority system. Likewise, I can attract quality elementary school teachers for much less than I am paying now. If I was permitted to do so, I would be able to employ more teachers, lower class sizes and increase offerings for students.

With that as background, the answer to your first question is that I think the seniority system for determining pay for teachers does a disservice to the taxpayers, the students and the teachers. We should be able to pay great teachers more, we should let market forces work for determining how much taxpayers must pay to attract quality and we should be able to provide the best education experience for the students without the artificial constraints imposed by the seniority system. Please note, however, that this first question did not address "Merit Pay". There are two concepts which are sometimes confused. The first is "Merit Pay", the ability to pay teachers extra for better teaching or for a better quantifiable result, the second is "Differentiated Compensation" which is the ability to pay teachers based on supply and demand or for quality.

2. Can teachers performance be effectively evaluated by testing? Why or why not?

Not completely and sometimes, not at all, for a variety of different reasons. Whole books have been written on this subject. Standardized tests will provide some insight into how well a teacher performs their task, but there are a multitude of other factors that one must consider when determining teacher quality. I'll offer two (fictitious) examples to illustrate the point. Let's say that you have an Algebra 2 teacher at WKHS. In her class are kids who took Algebra 1 from a variety of teachers at McCord, some good and some not-so-good. The kids who did not have quality instruction in Algebra 1 will not do well in Algebra 2 through no fault of the Algebra 2 teacher. The second example is even more obvious. Some kids are not prepared to go to school each morning. Their parents are struggling to make a living, they don't have time to help the kids with homework, they don't have internet access at home and they can barely afford breakfast. Other kids have the best of everything, including tutors if they need extra help. Any attempt at evaluating teachers must take these factors into consideration.

In addition, there are some areas where testing is subjective. For example, how would you judge a theatre teacher or a music teacher lacking standardized tests. In these situations, other metrics would need to be used. Finally, there are a range of categories where some teachers excel in ways that don't show up on tests. For example, a student may reach out to a teacher in a time of crisis in their life and the teacher's actions might have kept the student from making a serious mistake, getting on drugs or worse. Some teachers get that connection with their students and others go through the motions. All of that must be part of a teacher's evaluation.

3. Many say that paying teachers based on years of teaching experience is unfair, and often results in lower pay for the best teachers. Is this a common problem?

To the extent that quality can be measured (a prerequisite for determining who the "best" teachers are), most studies show no correlation between quality and seniority, therefore, there is also no correlation between pay and quality. Since there is no correlation between pay and quality, it is fair to say that the "best" teachers will sometimes receive lower pay. In your own high school experience, did you have really good teachers who were just starting out, or really bad teachers who were older? How often this occurs would be difficult to measure but to the extent that it does happen, the pay differential would be unfair.

This is one such study that you can use for background information:

4. The goal of merit pay is to reward the best teachers. Is this ideal and is this possible?

First, I do not agree with the premise of the question. The purpose of strategic compensation is to advance the goals of the organization. School districts are best served with quality teachers, therefore, the purpose of strategic compensation in a school district is to attract and retain quality teachers. Merit Pay is a component, a small component, of strategic compensation. Arguably, a district with merit pay might be more attractive to a quality teacher than a district without merit pay. The other thing to keep in mind is that as we look at teaching as a profession, we need to fix the fact that there is no career path for teachers that does not lead to administration. A teacher essentially has the same job in year 30 as they did in year 1. We need to define that career path and recognize that there are other ways to reward teachers than with money. For example, a "Master Teacher" designation, in addition to carrying a higher salary, might receive greater autonomy, the ability to serve on state committees, the ability to write and teach new courses and so forth. If we are just talking about merit pay as a small incremental for achieving good test scores in a given year than no, I don't think you accomplish much of anything. We need to look hard at the teaching profession and start treating teachers as the professionals that they are.

5. Could merit pay create hostile competition between teachers?

Sure, but that's no different than what some teachers feel today. If you are a great teacher working 70 hours a week doing everything possible for your students, and you are making half as much as the teacher next door who does the bare minimum, that might also foster negative feelings. It is human nature. As long as compensation is administered fairly and always with an eye towards advancing the goals of the organization, strategic compensation would yield better results than the status quo.

6. Some opponents of merit pay say that teachers don t become teachers for the money. Does this mean incentives for higher performance do not work?

Choice of career is a function of a large number of variables. I didn't become a software developer for the money either, I did it because I enjoyed working with computers and I had a passion to learn everything about them. Did that mean that as my career advanced, I didn't take advantage of opportunities to increase my pay? Of course not. The notion that teaching is the only profession whose practitioners are never motivated by money is silly.

There are volumes of research on the question of whether incentives for higher performance work and I assume as part of your study, you will cite work on either side of the argument. I think you are asking the wrong question. What you need to ask yourself is whether a system of strategic compensation works better than the existing system. With the existing system, there is no correlation between quality and pay. Don't take my word for it - try to find such a study. Research shows that we are pulling teachers from the bottom 33% of college classes. That would seem to indicate that we are not paying enough to attract the best possible candidates to the profession, or, that the best candidates for the profession have many options for career choice and the thought of going through 35 years of a career with no opportunity for advancement is not appealing. Either way, we can do better. One thing is for certain. With the existing system, we are surely limiting the pool of possible teachers to those who are NOT motivated by money and excluding those who are, and that can't be healthy for the profession.

7. Private schools are often cited as successful examples of merit pay. Could this success be translated to public schools?

I don't agree with the premise of the question, that private schools are often cited as successful examples of merit pay. There are many merit pay experiments occurring in both public and private schools, however, I am aware of only a few that use strategic compensation to attract and retain teachers. For example, 60 minutes did a report earlier this year on a public school in Manhattan that paid all of their teachers $125,000/year. They wanted to hire the absolute best. This would not be merit pay, this would be strategic compensation. This was the report:

8. Would merit pay distort the goals of teachers for better or for worse?

Sure, but no more so that the incentives and disincentives built into the current system. For example, to pass a state standard might require 75% of the kids to achieve a score of 60 on an achievement test. A teacher might spend more time with kids bordering on 60 to pull them over the top and spend less time on kids at the top or kids that have no chance to pass the test. That's why you have to be really careful when designing the goals. If I were to ask you what the goal of the Worthington School District should be, how would you answer? It is not an easy question because there would be many goals - selecting only one would be quite a challenge. Is it to produce National Merit Scholars? What about kids at the bottom? Is it to see that everyone graduates? How does that serve kids that are most gifted? See what I mean?

Bottom line is that merit pay, as an adjunct to strategic compensation can certainly further the goals of the organization but the organization itself needs to understand those goals first. If the organization understands what it is trying to accomplish, formulating a merit pay scheme to move everyone in that direction is possible.

9. Obviously there are a lot of compromises that must be made to create an effective system. Please describe what you view to be the best method for determining teacher salaries.

I'd need a bit more time to answer this one, but you get a sense of the alternatives from my earlier answers. Market forces must be allowed to prevail. We cannot not continue to treat teachers, one of the most important professions, the same as assembly line workers at GM. We need to use strategic compensation to attract and retain people in the profession. There is one question you should have asked that you did not. If the market says that to attract quality people, we need to pay more, can we afford to do so. My answer is yes, because if we can fix public education, I believe that a significant percentage of money currently being spent on social services would no longer be required. We are going to invest money anyway, either in education or in social services - I think society is best served by investing in education at the front end.