Michigan schools try merit pay

By Chris Andrews

In Michigan, the rural school district of Oscoda is a trailblazer when it comes to merit pay for teachers.

Teachers in the northern Michigan community earned across the board $250 bonuses after the 2007-08 school year — $10 for each of 25 categories in which students met achievement goals on state tests. Soon, the district will divvy up $25,000 among the 94 teachers for 2008-09 scores, but the payouts will vary depending on how students performed in individual teachers’ classrooms.

Some teachers will get larger bonuses, some smaller ones. And some none at all.

Superintendent Christine Beardsley acknowledges that the amount of money – roughly one half of 1 percent of salaries – will motivate some, and not others. “Do I think that $25,000 will be enough? No,” she said. “But do I think it will have impact? Yes.”

It remains to be seen whether other school districts will follow Oscoda’s example. Merit pay, either in the form of raises or bonuses, is the rare exception rather the rule in Michigan, where most teachers are represented by the powerful Michigan Education Association.

But change is in the air. President Obama and U.S. Education Secretary Arne Duncan have made it clear – at least in general terms – that they support greater accountability for teachers, and compensation systems that reward outstanding teachers. And the chance for cash-strapped school districts to grab federal stimulus dollars could prove a powerful incentive to at least experiment with pay for performance.

“It is not widespread, but there are a large number of districts (trying it),” said Matthew Springer, director of the federally funded National Center on Performance Incentives, which studies compensation systems for schools. “It is definitely a movement that is increasing.”

Supporters of merit pay argue that a well-crafted merit pay system rewards excellence and provides financial incentives for educators to work hard, seek out professional development opportunities and teach effectively. They believe the reform can keep good teachers in the classroom and boost student achievement.

Obama has yet to fully define his “Race to the Top Fund” school reform program, but it is clear that more than $4 billion will be available in competitive grants, and that it will emphasize teacher accountability. Duncan, his education chief, headed the Chicago public schools, which provided merit pay on a building-wide basis.

For starters, the Obama administration is insisting that to be eligible for the funds, states develop data systems that can be used to link teachers to individual student performance. But it is widely expected to include additional federal dollars to schools that develop merit plans.

There are skeptics, to be sure, as well as sharp disagreement about what a pay-for-performance plan should look like. “Quite frankly, merit pay is union-busting,” a delegate at a National Education Association meeting told Duncan, drawing applause from the audience. Critics say poorly merit pay plans can pit teacher against teacher and punish teachers in circumstances where poor test scores are beyond their control.

Kerry Birmingham, spokeswoman for the Michigan Education Association, said the union is not universally opposed to merit pay – especially if it rewards teachers for working well in teams or encourages them to develop themselves professionally.

“We do believe that there are fundamental flaws with the idea of traditional merit pay, where a teacher is rewarded based on the single standardized test score of the students in the classroom,” Birmingham said. “It doesn’t take into account what happened for those students in the three or four years before that, it doesn’t take into account what kind of environment the kids may have outside of the school — if they faced poverty, if they faced English as a second language.”

Single salary schedules

Across the country, about 97 percent of school districts pay teachers through single salary schedules; they base teacher compensation on years of experience, degrees held and academic credits attained. Math teachers earn the same as English teachers or physical education teachers. Teachers receive annual step increases for a decade or longer; those with master’s degrees earn thousands of dollars more each year.

In the Warren Consolidated School District, for instance, a teacher with 10 years experience and a master’s degree will earn $86,783 this school year, compared with $52,070 for a teacher with a bachelor’s and three years experience, according to the contract, which is posted on the web site of the Mackinac Center for Public Policy.

But education compensation experts say that pay systems should be structured to spend money in ways that achieve better student outcomes. They say the single salary schedule gets failing grades on that count.

“There is definitely good evidence that teachers get a lot better in their first few years. There is a big learning curve in the first few years,” said Brian Jacobs, the Walter H. Annenberg Professor of Education Policy and professor of economics at the University of Michigan. “But after about three years – and certainly after five years — there’s no difference between a fifth-year teacher and a 15th-year teacher. And yet there are huge salary differences.”

And master’s degrees? “A recent survey found there wasn’t a single study that found the positive effect of a master’s degree,” said Silver, director of the Vanderbilt-University based National Center on Performance Incentives. “And yet we are spending billions of dollars rewarding master’s degrees through the salary schedule.”

Linking pay, performance

The Bush administration encouraged merit pay experiments through Teacher Incentive Fund grants to school districts. Schools in at least 34 states created programs. According to a list on the National Center on Performance Incentives web site, none of the school districts was in Michigan.

Until now, there has been little in the way of rigorous research studies on the value of merit pay. Springer says there have only been nine such studies, including ones in rural India, Kenya, and Israel. “Of those studies, the evidence seems to be positive that there can be a positive impact, but it’s a very small research base.”

In Denver, the ProComp system rewards teachers with salary increases based on student achievement growth, performance evaluations, increased knowledge and skills and by working in certain high-risk schools. Residents voted to raise their taxes to pay for the plan, which costs about $25 million a year.

In Houston, educators are rewarded with bonuses as part of the ASPIRE (Accelerating Student Progress, Increasing Results and Expectations) program. Teachers complained loudly after the initial payout in 2007 that the system was unfair, too complicated and resulted in an excessive bonus to the superintendent. The criticism has abated since the program was revised, but teachers remain divided over its value. In 2008, the average bonus was $2,100, with the maximum award of $7,800, according to the Houston Chronicle.

Three years ago, the National Center on Performance Incentives implemented a three-year controlled study experiment with merit pay bonuses for teachers in Nashville, Tennessee. Researchers hope it will provide the best data yet regarding the effectiveness of pay for performance.

Numerous options

For those who believe that financial incentives will lead to higher student achievement, there are a variety of ways to achieve that. Some offer bonuses, others increase base pay. Some reward teachers, others clusters of teachers or even the entire staffs of buildings. Others still reward teachers who teach in disadvantaged school districts, or teachers in areas where there are shortages, such as math and science.

Michigan Superintendent of Public Instruction Mike Flanagan says he supports merit pay at the building level. That gives the entire staff — the principal, teachers, aides, the school secretary and custodian — a financial stake in boosting student achievement.

Flanagan believes the building-wide approach is superior because it fosters collaboration and teamwork. Teachers will be inclined to help underperforming peers, rather than view them as “not my problem.”

“If someone’s not pulling their weight, you (teachers) need to take care of it,” Flanagan said. “If teachers are getting smaller bonuses because Joe doesn’t show any growth, they’ll say, ‘Joe, you need to take training, Joe, we’re going to help.’”

Michigan State Board of Education member John Austin agrees.

“It is analogous to what the private sector has found to be powerful and effective ways to link worker performance with a financial reward, which is, don’t have an individual bonus and pick the stars, but have a collective team record,” he said.

Austin also supports incentives that encourage teachers to improve their skills.

“North Carolina has done a lot around teacher quality improvement. They pay a bonus for teachers that get national board certification, which is a rigorous program of competency- building for existing teachers,” he said. “They have thousands of nationally board-certified teachers, and we have about 100 or 150, even though the national headquarters of that effort is in Michigan.”

Michigan: Few and far between

Michigan has only a handful of districts with pay for performance.

In Oscoda, merit pay was negotiated into the contract that teachers ratified in September 2008 at the insistence of several business owners who served on the school board, said Beardsley, who is in her ninth year as superintendent.

In the 2007-08 school year, all teachers earned incentives equally based on student performance in 34 areas. Every teacher earned $10 for each of the 25 areas in which the district achieved its goals, so each teacher received an additional $250.

The $25,000 merit pay bonus pool for the 2008-09 school year will go to individual teachers based on the performance of their students on the Michigan Education Assessment Program tests. In the new school year, teachers bonuses’ will be based on whether their students meet target achievement goals of the Northwest Educational Assessment test.

The AuGres-Sims School District awards equally divided merit pay to its 27 teachers based on student scores on state tests. Teachers can earn a maximum of $1,500. The Grand Blanc and Clio school districts have implemented merit pay as well.

Beardsley believes people respond to recognition and reward. After she initiated an Iron Man award (no money attached) to teachers with perfect attendance for the school year, the number of teachers meeting that standard increased sharply.

“In our society, we have created a culture where if you do X and reach the bar, then you are rewarded,” she said. “This has the potential to impact education in the United States.”