thebroadfoundations PAY FOR PERFORMANCE PACE Conference Oakland and Los Angeles, CA March 2009

2 thebroadfoundations PAY

3 thebroadfoundations DIFFERENTIAL PAY

4 thebroadfoundations PAY for PERFORMANCE

5 thebroadfoundations What is wrong with the current system? Traditional pay systems do not reward educators for results. Traditional compensation programs that pay extra for degrees, credits and professional development do not necessarily result in improvements in student achievement. Providing compensation based on tenure restricts the ability of a district to use compensation to attract and retain talent.

6 thebroadfoundations Early and mid-career teachers are over 10x more likely to leave the district than late career teachers, yet the lion’s share of compensation is focused on late career teachers. 6 Source: Denver Public Schools

7 thebroadfoundations How can pay for performance help? Pay for performance can be an important lever in improving teacher effectiveness. Linking educator pay to student performance can attract, motivate, reward and retain the most effective teachers. By rewarding and retaining the most effective teachers, we can accelerate the improvement in student achievement even more.

8 thebroadfoundations Are teachers really motivated by M O N E Y? “Compensation” and recognition for a job well done comes in many forms, and not all of them are green. Compensation policies impact employee behaviors, practices and expectations, and have a direct connection to the norms and culture of those organizations. A new generation of teachers are interested in tying a portion of their compensation to quantifiable results. P4P has the potential to transform the K-12 education labor market. A number of pioneering school systems and teacher unions are leading the way – and their teachers are embracing pay for results in significant numbers.

9 thebroadfoundations The Broad Foundation’s investments in P4P Denver Teacher Advancement Program (Minneapolis and Chicago) New York City Houston

10 thebroadfoundations TBF Grants to Date: Program Descriptions GrantProgram Descriptions DenverMax Award: $7,500 All new teachers participate; experienced teachers opt-in Provides rewards for student achievement, PD and teaching at hard to staff schools Funded by local tax levy TAPMax Award: $2,500 Schools must vote to participate in the program Awards earned based on student achievement and for results on a professional evaluation. A career ladder and an embedded PD model are also part of the program, as is pay for “master” and mentor teachers. Funded by district and state funds

11 thebroadfoundations TBF Grants to Date: Program Descriptions GrantProgram Descriptions Houston Max Award: $8,600 All teachers in the district participate Rewards teachers for increasing student achievement (classroom & school wide) Funded by board resolution that ties salary increases to P4P funding commitment NYCMax Award: $5,000 Challenged schools can apply to participate; plan is to expand to entire system Rewards are allocated based on school-wide performance Funded by district and philanthropic funds

12 thebroadfoundations TBF Grants to Date: Results GrantResults Denver Established permanent local funding More than 1/3 of teachers have opted-in to the system and all new teachers automatically participate DPS uses its new pay system as a recruiting tool. DPS has grown student achievement results faster than the state for most grade levels TAPTAP implemented in over 20% of Minneapolis Public schools; other alternative compensation programs cover over 80% of teachers in the district High levels of teacher approval of the program Early data shows TAP schools in Minneapolis out- performing comparison schools in improving student achievement

13 thebroadfoundations TBF Grants to Date: Results GrantResults HoustonHISD increased applicants per open position by 15 applicants per position since the inception of the P4P program HISD outperforms 100% of comparison groups in increasing achievement since the inception of the program NYCApplications for teachers at schools participating in the bonus program exceeded applications to comparable schools by 50% Early student achievement data inconclusive

14 thebroadfoundations Critical Program Design Elements Design Element ProductiveOptimal ParticipationTeachers at high need schools are rewarded with bonuses. All teachers in the district are eligible for bonuses. Group vs. Individual Awards Teachers are rewarded for the academic results produced at their school. Teachers of tested subjects are rewarded based on the results produced in their classroom. Teacher Evaluation Rewards based on a professional evaluation are offered even if they are not predictors of academic results. Bonuses are based on ability to improve academic achievement and rating from professional evaluation matches rating from academic achievement.

15 thebroadfoundations Critical Program Design Elements Design Element ProductiveOptimal Size of Bonuses Maximum bonus at least 10% of base salary. Maximum bonus equal to 20% or more of base salary. Distribution of Bonuses Bonuses are not offered to teachers who do not demonstrate growth in student achievement. Bonuses for the top 5-15% are twice those of average performers. Bonuses are not offered to teachers who do not demonstrate growth. Changes to Step and Lane System Some base salary increases based on degrees and credits. Salary increases only offered to those who produce results. No pay increases for degrees and credits.

16 thebroadfoundations Critical Program Design Elements Design Element ProductiveOptimal Differential Pay for Hard to Staff Subjects and Schools Up front “placement” incentive of more than 10% of annual salary for the first three years. These placements should be based on teacher effectiveness data whenever possible. Back end “results” incentives of 20% or more of annual salary for demonstrating results in the hard-to-staff subject or school. These hard-to-staff incentives should be higher than incentives for regular schools, but need to be tied to a “trigger ratio” to determine when a subject or school is no longer categorized as hard-to-staff.

17 thebroadfoundations Commitment District, school board and union leadership must embrace the program as a central element of the district improvement strategy Communications District determines non-negotiable elements of the program, but involves the union early on in design and implementation roll out Teachers receive significant information and training regarding the design of the program and their bonus potential Data Bonuses are determined by a statistical methodology that is clear, credible and transparent Facets of a Successful P4P Implementation

18 thebroadfoundations Attracting and Retaining Talent Data from the P4P program is utilized to make decisions regarding recruitment, selection, retention, promotion remediation and removal of teachers Financial Sustainability A set-aside pool of funds (tax levy, compensation pool carve out) is established that is dedicated to P4P Continuous Improvement Acknowledge that we are in the early innings of paying educators for results and be open to modifying and improving the program based on results, an independent evaluation and teacher feedback Facets of a Successful P4P Implementation

19 thebroadfoundations DISCUSSION