1. 1 Teacher Incentives: Defining and Getting To A New Deal Marc J. Wallace Center For Workforce Effectiveness

2. 2 Today’s Agenda We’re In Love With Business! Can SBPA and KSBP Work In A Professional Environment? 7 Hard Won Lessons Getting To A New Deal

3. 3 We’re In Love With Business Lionized Heroes Like Jack Welch Popularity of Six Sigma Run Like A Business

4. 4 Can SBPA and KSBP Work In A Professional Environment? What’s The Difference Between General Electric and a School District? What’s The Difference Between a Manager or a Sales Person And A Teacher? Does Money Motivate? Some Good Questions...

5. 5 Historically variable pay was restricted to select groups of employees: Executive Compensation - Short & Long Term Incentives Sales Incentives Recent experience shows great interest in extending variable pay to broad groups of employees School Based Performance Award SBPA Basics

6. 6 Be careful what we call variable pay: Incentive - Cash payment that is earned Bonus - Cash payment that is discretionary Both have a place in a total compensation strategy School Based Performance Award SBPA Basics

7. 7 Unit incentive plan Long term business goals Continuous improvement SBPA is an adaptation of a business practice called GoalSharing School Based Performance Award SBPA Basics

8. 8 GoalSharing plans establish an operational model of the business and share a part of any gains beyond specified targets. Rewards shared with employees for achievement above target Operations Target School Based Performance Award SBPA Basics

9. 9 GoalSharing is much more than just a pay system. GoalSharing communicates the company’s strategy that impacts the culture of the Virtual Workplace School Based Performance Award SBPA Basics

10. 10 Corporate Perf. Co/Unit Perf. “How can we possibly make this goal?” “How can I get these costs down?” “How can I increase our stock price?” “How long until I can go home?” Small Team Individual School Based Performance Award SBPA Basics

11. 11 Corporate Perf. Co/Unit Perf. “How are we doing right now?” “How can we do better?” Small Team Individual School Based Performance Award SBPA Basics

12. 12 Overview of Knowledge And Skills Based Pay Dates to the Middle Ages - Common in the professions E.g, Medical, legal, accounting professions Replaces traditional job evaluation Pay the person according to competencies acquired and put to work

13. 13 Common Characteristics of Knowledge and Skills Based Pay Pays the person not the job Everyone starts at the same beginning rate Base pay increments are attached to increasing levels of competency to perform Pay structure is relatively flat (Top Rate 160% to 200% of entry level) Upward movement is expected of all (“Up or Out”) Steps are based on significant results related to professional expectations Overview of Knowledge And Skills Based Pay

14. 14 What Have Successful Organizations Achieved With Skill Based Pay? Flexibility More Efficient Use of People Higher Levels of Productivity Improved Quality Improved Customer Service Fulfilled Employees Overview of Knowledge And Skills Based Pay

15. 15 Best Fit Scenarios Organizations Have A Need For Skilled Professionals Work Has Been Designed To Allow For the Use of the New Competencies Sufficient Trust and Empowerment Exists Between the Organization and the Professionals Management Sees the Value of Investing In Professional Capital Overview of Knowledge And Skills Based Pay

16. 16 Overview of Skill Based Pay Major Threats to Skill Based Pay Topping Out - “What’s Next” Threat of Degenerating Into “Paper Hanging” Conflict with Traditional Job Evaluation Designs System Expense Re-Certification and Currency

17. 17 Seven Hard Won Lessons About SBPA and KSBP

18. 18 Seven Hard Won Lessons Lesson #1: 38 % of Incentive Programs Fail They end up as entitlements They end up as a source of contention between management and labor They fade away and leave a bitter taste

19. 19 Lesson #2: When they fail, the cause is not a matter of having poor design but a matter of poor execution Not being ready Not communicating enough and not communicating eloquently Not involving team members in goal setting Not being able to assess the impact of the program and change its direction Seven Hard Won Lessons

20. 20 Lesson #3: In order to be successful, an incentive system must achieve each of the following criteria... It must capture attention and generate excitement. It must be understood. It must communicate business goals and objectives. It must operate as designed. It must lead to improved business performance. Seven Hard Won Lessons

21. 21 Lesson #4: Meaningful Collaboration Is Essential Involvement of Teachers and Other Staff Partnership Between Boards, Administrators and Union Leaders Ownership of the Participants Seven Hard Won Lessons

22. 22 Lesson #5: SBPA and KSBP Must Have Credible Standards Make sure SBPA measures are valid and reliable Make sure teachers can make a difference Make sure steps KSBP steps add value Make sure that certification is based on performance and results in addition to knowledge Seven Hard Won Lessons

23. 23 Lesson # 6: Conflict With Tradition “Seniority and tenure don’t count anymore!” “Holding out money is demeaning!” Seven Hard Won Lessons

24. 24 Lesson # 7: Credible Pay Comparisons KSBP Must Still Be Competitive (External Fairness) KSBP and SBPA Are Not Band Aids For A Flawed Base Pay Program KSBP and SBPA Programs Must Be Fair Internally Seven Hard Won Lessons

25. 25 Getting to the New Deal --- Rules of the road High Tech New Schools CWE New Deal Skills

26. 26 Rule #1: Get Past Future Shock The New Deal forces us to get past characteristic milestones of adjustment to major change: Stage 1 Denial CompanyEmployee “This is a blip. We’ll tough it out and business will be back.” “They can’t really mean it! These things don’t happen here!” Stage 2 Anger “Why can’t they leave us alone! They don’t play fair!” “How dare they do this to loyal employees!”

27. 27 Rule #1: Get Past Future Shock (Continued) Stage 3 Bargaining CompanyEmployee “If we get lucky, this is the last change we will have to make!” “Maybe if I work harder!” Stage 4 Depression “What’s the use?”“It’s hopeless!” Stage 5 Acceptance The New Deal

28. 28 Teacher Accountability Board Accountability Student Accountability Rule # 2: Think Impact and Accountability Let’s Get A Common Understanding of Roles….

29. 29 Rule # 3: Make Collaboration A Habit Collaborators: Teachers Support Personnel Administrators Boards Communities Students

30. 30 Rule # 4: Career Management Forget career franchises: My career is a platform that gets me close to core problems NOT Promotion sequences in the same school district based on merit Career pay is driven by increasing personal asset value, not tenure

31. 31 Rule # 5: Tough Love Tough Love requires that the employment relationship shift: From:To: Parent/childto Parent/child Mutual responsibility Self management Shared risk to

32. 32 Thank You!