Perceptions of Strategic Compensation

Running Head: PERCEPTIONS OF STRATEGIC COMPENSATION

Perceptions of Strategic Compensation

Rick Carter, Jennifer Dunlap, and Trey Holladay

Lipscomb University

December 7, 2015

PERCEPTIONS OF STRATEGIC COMPENSATION ii

Approval Page

This Capstone Project, directed and approved by a Juried Review Committee, has been accepted by

the Doctor of Education Program of Lipscomb University's College of Education in partial

fulfillment of the requirements for the degree.

Teachers' Perceptions of Strategic Compensation in the Rural Southeast School District

By

Rick Carter

Jennifer Dunlap

Trey Holladay

for the degree of

Doctor of Education (Ed. D.)

Tracey S. Hebert, Ph.D. Director, Doctor of Education

Carole glish, Ed. D. Ed.D. Capstone Faculty Advisor

4c-: t,/: ��Roger Wiemers, Ed.D.

-

Juried Revie mmittee Faculty Member

ar Catherine Sevier, J .D. Ju 'ed Review Committee Faculty Member

M·� t�Ed.D.

Juried Review Committee Faculty Member

PERCEPTIONS OF STRATEGIC COMPENSATION iii

Acknowledgements

We are thankful to so many that have borne this journey with us, but first we thank our

families that have given up precious time to make this possible. We love you and know we only

made it through with God’s hand and your sacrifices. You all will find us better people for the

growth we experienced away from you. Our commitment to you and our future together is

stronger than ever. We would also like to thank our extended family, friends, and coworkers for

your support and encouragement. You made it possible to move forward during the tough times.

Next we would like to thank the director of schools, faculty, staff, and administration of

the Rural Southeast School District where we conducted our research. Their openness to share

during this process simplified our data collection. Your community is fortunate to have great

people taking care of their children.

We would also like to thank all of the faculty and staff of Lipscomb University. Our

professors that taught us throughout this doctoral program have gone above and beyond in their

mentorship and instruction. We would like to thank especially Dr. Carole English, Dr. Roger

Wiemers, Mrs. Mary Catherine Sevier, Dr. Debi Hoggatt and Dr. Trace Hebert. We want to

express our appreciation for your help, patience, and feedback over the last year of the project.

You all gave incredible advice and helped at inconvenient times. We will not forget your

support.

Last, we would like to express our love and gratitude humbly to all the members of the

Lipscomb University FA13-A Ed.D. cohort. The friendship, struggles, support and the journey

we shared will always be with us even when we are not together. We are all better people for the

time we shared and the relationships built with you. We will cherish this period of our lives long

after our professional careers are over.

PERCEPTIONS OF STRATEGIC COMPENSATION iv

Abstract

This project explored perceptions of teachers in the Rural Southeast School District concerning

their newly adopted strategic compensation plan. The district implemented the compensation

model for all newly hired faculty and allowed current faculty to opt in or out. The district was

able to extract quantitative statistics from student assessments and teacher evaluations but

desired qualitative data to inform its examination of the plan. The purpose of this study was to

inform the superintendent and school board of teachers’ perceptions of the strategic

compensation model, specifically, if teacher behaviors changed because of the plan and if the

plan affected their decision to remain in the district.

The researchers examined the perceptions of 59 elementary, middle, and secondary teachers and

administrators who currently served in the district. The study employed questionnaires,

individual interviews, and focus group interviews as the basis for answering the research

questions.

Through this project, the researchers found many similar themes revealed through other studies

on teacher merit pay. Teachers believed there was a high weight of student achievement in

determining their value but did not necessarily know the criteria utilized for the determination.

Teachers believed that achievement data was important when deciding effectiveness in teaching.

However, teachers desired more input on how that effectiveness was determined. Finally, the

effect of the plan on teacher recruitment and/or retention in the district according to teachers’

perceptions was unclear.

PERCEPTIONS OF STRATEGIC COMPENSATION v

Table of Contents

Abstract…………………………………………………………………………………………... iv

Table of Contents…………………………………………………………………………………. v

List of Tables and Charts……………………………………………………………………….. viii

Introduction……………………………………………………………………………………….. 1

Topic, History, and Background .................................................................................................. 3

Problem Statement ....................................................................................................................... 7

The Strategic Compensation Plan ................................................................................................ 7

Purpose of the Study .................................................................................................................. 17

Conceptual Framework .............................................................................................................. 18

Research Questions .................................................................................................................... 22

Significance of the Study ........................................................................................................... 23

Delimitations .............................................................................................................................. 25

Definitions .................................................................................................................................. 25

Literature Review……………………………………………………………………………….. 27

Performance-Based Pay ............................................................................................................. 27

Benefits of Performance-Based Pay .......................................................................................... 37

Drawbacks of Performance-Based Pay ...................................................................................... 39

Teacher Perceptions of Strategic Compensation ....................................................................... 49

Changes in Teacher Behaviors ................................................................................................... 53

Chapter Summary ...................................................................................................................... 61

Methodology……………………………………………………………………………………. 63

Purpose of the Study .................................................................................................................. 63

PERCEPTIONS OF STRATEGIC COMPENSATION vi

Research Questions .................................................................................................................... 63

Research Design ......................................................................................................................... 63

Populations ................................................................................................................................. 65

Demographics of Teacher Participants ...................................................................................... 66

Interview and Focus Group Participants .................................................................................... 71

Description of Research Instrumentation ................................................................................... 72

Variables in the Study ................................................................................................................ 76

Procedures for Data Collection .................................................................................................. 77

Data Analysis ............................................................................................................................. 79

Disposition of Data .................................................................................................................... 80

Findings and Analysis of Data………………………………………………………………….. 82

Organizational Summary ........................................................................................................... 82

Findings Related to RQ1 ............................................................................................................ 82

Findings Related to RQ2 ............................................................................................................ 92

Findings Related to RQ3 .......................................................................................................... 100

Conclusion and Discussion…………………………………………………………………….. 103

Summary .................................................................................................................................. 103

Interpretation of the Findings ................................................................................................... 104

Relationship to Previous Research ........................................................................................... 110

Discussion and Conclusions .................................................................................................... 116

Recommendations for Practice ................................................................................................ 121

Limitations ............................................................................................................................... 124

Recommendations for Further Research .................................................................................. 125

PERCEPTIONS OF STRATEGIC COMPENSATION vii

Reflections ............................................................................................................................... 126

References……………………………………………………………………………………… 130

Appendix A: Informed Consent Letter………………………………………………………… 141

Appendix B: Research Instrument……………………………………………………………... 144

Appendix C: Focus Group Questions………………………………………………………….. 148

Appendix D: Interview Questions……………………………………………………………... 149

Appendix E: Table 25………………………………………………………………………….. 150

Appendix F: Pilot Test…………………………………………………………………………. 151

Appendix G: MOU…………………………………………………………………………….. 153

Appendix H: NIH Certificates of Completion…………………………………………………. 158

Appendix I: IRB Approval……………………………………………………………………... 160

Appendix J: Team Member Biographies………………………………………………………. 161

PERCEPTIONS OF STRATEGIC COMPENSATION viii

List of Tables and Charts

Table 1: Entry Level Salary Schedule………………………………………………………….....9

Table 2: Percentage of Annual Base Pay Award………………………..…………………..…...10

Table 3: Salary Schedule for School-wide Awards……………………………………………...11

Table 4: Growth Score Awards.....………………………..……………………...…………........12

Table 5: Hard to Staff Positions Supplement….…….………...………………………...……….13

Table 6: Hard to Staff Positions Supplement….……..………..………………………...……….13

Table 7: Effective Principals Awards Schedule…....……...………..………………...………….14

Figure 1: Adams Equity Introduction……………………………………………………………19

Figure 2: Herzberg’s Motivational Theory………………………………………………………21

Table 8: Gender of Participants………………………………………………………………….67

Table 9: Years of Experience of Participants……………………………………………………68

Table 10: Licensure Level of Participants……………………………………………….………69

Table 11: Grade Level Taught by Participants……………………………………….………….69

Table 12: Tenure Status of Participants………………………………………………….………70

Table 13: Evaluation Level Scores of Participants…..…………………………………….….....71

Table 14: Strategic Compensation Participation of Participants…..…………………….………71

Table 15: Correlation of the Questionnaire and Research Question 1…..……………….………75

Table 16: Correlation of the Questionnaire and Research Question 2……...…….……………...75

Table 17: Correlation of the Questionnaire and Research Question 3…..……………………….75

Table 18: Overall percentages of positive and negative perceptions in RQ1……..….………….83

Table 19: Overall percentages of positive and negative perceptions in RQ2…….……………...93

Table 20: Skewness and Kurtosis Values for CS1, CS2, and CS3 in Relation to Strategic

PERCEPTIONS OF STRATEGIC COMPENSATION ix

Compensation Participation...........................................................................................................97

Table 21: Skewness and Kurtosis Values for CS1, CS2, and CS3 in Relation to No Strategic

Compensation Participation……………………………………………………………………...98

Table 22: P-Values for CS1, CS2, and CS3 as generated by Levene’s Test………………….....99

Table 23: P-Values Associated with Independent T-tests……………...………………………..99

Table 24: Overall Percentages of Positive and Negative Perceptions in RQ3…………………100

Table 25: Individual Interview Question Responses…………………………………………...146

PERCEPTIONS OF STRATEGIC COMPENSATION 1

Introduction

A strong teaching force is necessary for the well-being of our country’s citizens and

society as a whole. Not only does education allow for individual success and achievement, but it

can also dictate the future stability of the country. Therefore, raising underperforming student

achievement levels is a focus throughout the United States today. In order to accomplish this

goal, there is also a focus on increasing teacher effectiveness. The belief that some teachers are

more effective than others in advancing student outcomes has led to an increasing interest in the

use of strategic compensation for teachers. Many supporters have proposed rewarding teachers

as a strategy for improving teaching, learning, and student outcomes.

Over the last 100 years, U.S. schools have primarily used a limited salary schedule based

on teachers’ degrees and years of experience in K-12 public education (Podgursky, 2007).

Personnel salaries dominate every school district's budget and influence the allocation of system

resources. This ultimately will shape the district's ability to achieve its overarching goal of

maximizing student learning (Battelle for Kids, 2010). Notwithstanding this common

characteristic in salary schedules, contemporary research has cast doubt on whether increased

years of experience and advanced degrees have a significant positive impact on student learning

(Harvey-Beavis, 2003). All of these factors combined with highly accessible performance data

and bipartisan political support for compensation reform have stimulated the growth of

compensation policy programs across the country.

Education Secretary Duncan (Jehlen, 2009) argued that his department’s highest priority

was performance-based pay for teachers. Moreover, the Obama Administration created the $4.3

billion Race to the Top fund to encourage states to implement performance-based pay systems

among other initiatives. Both President Obama and the U.S. Secretary of Education, Arne


Duncan, had supported the push for performance-based pay. According to Gratz (2009), the

implementation of performance-based pay was a primary goal for them. Duncan, speaking at the

2009 National Education Association convention, argued that teachers would do well to support

performance-based pay and that “although test scores alone should never drive evaluation,

compensation, or tenure decisions, not including student achievement in teacher evaluation is

illogical and indefensible” (p.76). At the same time, the most controversial component of

performance-based pay systems has been payment based on standardized achievement test scores

of students.

In 2010-11, the State of Tennessee began the process of implementing an alternative

compensation model. Fourteen school districts across the state were the first to be part of a $501

million Race to the Top (RTTT) grant provided by the U.S. Department of Education (USDOE),

of which $36 million was designated to provide high-need districts with funding for

performance-based compensation. Tennessee also received two additional grants in the RTTT

funding that contributed to the initial pool of money the districts accessed, bringing the total

amount to over $50 million (TNCRED, 2011).

The Race to the Top grants and new state legislative laws that accompanied the $501

million statewide grant changed teacher tenure laws and provided incentive funds for these

innovative school districts to move away from the traditional salary schedule where teachers

were paid based on years of experience and degrees earned. This new pay system was referred

to as strategic compensation. In this reformed pay system, teachers were paid using a baseline

salary with potential bonuses determined by indicators focusing on student performance

(USDOE, 2010). Tennessee was one of only three states (including Texas and Florida) that had


taken the initiative to begin the transformation of policy regarding performance-based pay for

teachers.

In 2010, the Rural Southeast School District was awarded Innovation Acceleration Funds

(IAF) from the RTTT grant to organize a steering committee to design a strategic compensation

plan for the district. In 2011, this district was one of five school districts in the State of

Tennessee that was awarded an Innovation Acceleration Grant (IAG) of over $1 million as part

of the RTTT funding to move the school district to an entirely alternative-based compensation

model (TNGOV, 201l).

Topic, History, and Background

According to Gratz (2009), the first instances of performance pay occurred during the

mid-1800s in Britain. At this time, schools and teachers were paid based on test results. Over 30

years later, “the testing bureaucracy had burgeoned, cheating and cramming flourished, and

public opposition had grown dramatically. The practice was abandoned as a failure” (p. 76).

Gratz suggested that over the next fifty-plus years, there were two significant turns in

perceptions about performance-based pay. The first shift in perceptions occurred in 1907 from

Great Britain’s chief education inspector Edmond Holmes. Holmes believed that performance-

based pay devalued the process of teaching and learning because it placed a premium on test

scores. Teachers had shifted their focus from students to test scores so they could earn more

money. Holmes believed students were being mentally starved because of the focus on

regurgitating answers for exams instead of the in-depth mastery of content knowledge. As a

world education leader, his negative view on merit pay had an international effect. The second

paradigm shift happened in 1918 in the U.S. during the women’s suffrage movement, which led

the public to start considering fairness and gender inequalities. At that time, performance-based


pay began to be viewed as merit-based pay. The merit-based pay system was perceived to be

favorable to white male teachers. Because of the reality that women and minorities were treated

unequally to white males and the perception that merit-based pay was part of this inequality, the

public demanded a uniform pay scale. This new shift brought objectivity to a system that had

perpetuated a negative view on differentiated pay. A pay scale that was equalized by ensuring

teachers received the same pay for the education and experience brought a belief that all teachers

were treated equal regardless of gender or ethnicity. These beliefs would play out through the

next 50 years in the U.S. through the civil rights era. Leading up to the 1960s, 96% of school

systems across the country had a uniform pay scale.

In 1983, the U. S. Department of Education (USDOE) published A Nation at Risk, which

suggested that schools were becoming mediocre. President Ronald Reagan, a proponent of merit

pay, experimented with performance-based pay with negligible results. However by 1985, with

the promotion of Reagan’s idea that teachers should be rewarded for their merit and competence,

25 states had mandated incentive pay programs for teachers. Some districts during the era

experimented with incentive programs, management by objectives, and career ladder models or

differentiated staffing with little sustainability (Gratz, 2009; Harris, 2007).

By 1999, tying student achievement to teacher pay was being considered and even piloted

in some school districts. For example, the Denver, Colorado school board and teachers’

association jointly sponsored a new approach to performance-based pay focusing on student

achievement. The pilot study was successful overall; however, student performance was still

thought to be inadequate, suggesting that teachers were ineffective. According to Gratz (2009),

making the connection between the standard measures of students’ learning and teacher

performance was difficult to establish because the measurement being used was not applicable to


over half of the teachers in the district including teachers of the arts, as well as special education

teachers and those in untested grade levels. This particular model did not consider incentives for

those teachers working in difficult situations (such as exceptional needs), nor did it examine

incentives for those teachers that worked in non-tested subject areas. Additionally, teachers that

showed immense support for their school or attendance zone by taking on high-risk students or

serving at schools in high crime and poverty neighborhoods had no chance for monetary reward.

According to Gratz (2009), after four years of tremendous effort from teachers and

administrators, Denver expanded its definition of performance. They produced their most

effective performance-based pay plan with four different components used in evaluating the

effectiveness of the teacher- student academic growth, teacher skill and knowledge, professional

evaluation, and market incentives. The plan placed special attention to those teachers in hard-to-

serve schools or in hard-to-staff positions.

Gratz (2009) noted that when performance is broadly defined and all parties agree to the

plan, many educators agree that performance-based pay can be successful. During the past

decade, performance-based pay has been pushed to motivate teachers to increase achievement,

particularly in the context of student test scores. Thus, it can be asserted that modern

performance-based pay, which developed in part because of the No Child Left Behind Act,

increased standards required of schools over that same decade (USDOE, 2001).

Not all educators believe that performance-based pay can work. According to Terpstra

and Honoree (2008), if teachers see their peers earn bonuses for activities they completed during

the previous year, their perception of the system will likely change for the worse. Additionally,

Wragg, Haynes, Chamberlain, & Wragg (2002) stated that teachers may view a system as being

unfair if school goals are not aligned with those of the incentive system and result in preventing


teachers from receiving bonuses. However, Terpstra and Honoree also presented contrasting

research to these perceptions of unfairness within performance-based pay systems, asserting that

when merit pay distinctions were clearly demarcated at attainable levels, teacher motivation to

achieve each new level was much higher and the perceived fairness of the system was boosted.

Job satisfaction is tied closely to perceptions of compensation fairness. Teaching is a

uniquely difficult profession in which to judge individual effectiveness because of the large

number of intangible qualities and habits involved. Wragg et al. (2002) and Figlio and Kenny

(2007) found when teachers were judged based on criteria that they do not feel is representative

of the work that they were doing or that ignored important aspects of their perceived worth, they

often felt dissatisfied with the way they were rewarded. According to Lussier and Forgione

(2010), even within a fair and opaque system of evaluation, if record keeping was done sloppily

and resulted in incorrect payouts to teachers, confidence in the reward system could plummet

along with teachers' satisfaction with it.

According to Wragg et al. (2002), quotas on bonuses were another reason for decreased

satisfaction in schools using performance based-pay. In districts where teachers felt there was

too much competition for incentives, they were less likely to feel content with their system of

compensation. A study by Belfield and Heywood (2008) found that working under a

performance-based pay system showed no effect on career satisfaction among teachers and

resulted in a decreased satisfaction with their salaries.

Teacher perceptions of job motivation and satisfaction under merit pay systems seemed

to be decidedly negative based on previous research. One primary concern was that school

systems might be unable to fairly recognize and reward good teaching. Another concern was

that the school system might be financially incapable of meeting the budgetary needs for those


rewards. Similarly, quotas and unfair criteria for rewards can also deter teachers from placing

their confidence in merit pay.

Problem Statement

In 2011, the Rural Southeast School District implemented a strategic compensation plan

for all newly-hired faculty members with an option for existing faculty to join. The model

correlated with individual teachers’ effectiveness scores. Tennessee uses the Tennessee

Educator Acceleration Model (TEAM) to train and evaluate public school teachers and

administrators (TNDE, 2014a). The teacher effectiveness score was determined through TEAM

and included observations, professional development, and value-added scores from state-

mandated testing that show academic growth of students over time.

The major rationale for the district’s strategic compensation plan was based on the belief

that it provided faculty members with an incentive to improve teaching strategies and thereby

increase student achievement. The director of schools worked with a team of teachers,

administrators, and the board of education to create and implement the current performance-

based pay system used in the Rural Southeast School District. While the district had collected

quantitative data since the inception of the strategic compensation plan, they had not examined

the teachers’ perceptions of the model.

The Strategic Compensation Plan

Overview. In 2010, the Rural Southeast School District was awarded $50,000 from the

Competitive Supplemental Fund (CSF) of the Race to the Top (RTTT) grant to assist in the

planning and development of a strategic compensation model. A steering committee consisting

of the director of schools, system and school administrators, K-12 system teachers, and local

community leaders were charged with the task of designing the model. The committee’s work


was substantial enough to impress external evaluators and by January 2011 the district was

notified by the Tennessee Department of Education that they were one of four school districts in

the state to be awarded RTTT funds for alternative salary models. The district received over $1

million from the Innovation Acceleration Fund (IAF) to move the school district to the new

alternative based compensation model.

In the spring of 2011, the district’s Strategic Compensation Plan was approved by both

the local and state boards of education. The Commissioner of Education gave final approval and

special permission to implement the Strategic Compensation Plan in order to abolish the

traditional Basic Education Program (BEP) salary schedule in the district. The new plan was

implemented at the start of the 2011-12 school year.

Section A. The district plan for determining compensation was constructed of six

sections of which teachers could choose to be a part. Section A consisted of the entry-level

salary schedule that all employees hired during the initial year of implementation or after

received. The base line, entry-level salary was set at the time of initial employment and could

not change with experience or degree after the first year of employment. Table 1 shows the

entry-level salary schedule for teachers.


Table 1

Entry-level salary schedule for teachers

Degree Years of Experience Salary

Bachelor Level 0 $30,876

1-5 $31,446

6-10 $34,066

11+ $37,461

Masters level 0-5 $34,291

6-10 $37,906

11+ 41,766

Section B. Section B of the plan provided the first performance pay incentive of the

strategic compensation model. This section was designated as the annual base pay schedule.

Base pay was determined by each teacher’s summative evaluation score and determined through

the 100th decimal place. The individual teacher’s Tennessee Value-Added Assessment System

(TVAAS) score and Tennessee Educator Acceleration Model (TEAM) rubric score were utilized

to determine individual teachers’ summative evaluation scores for annual base pay.

According to the Tennessee Department of Education (2011), TVASS was designed to

measure how teachers and schools grow students academically. The evaluation was designed to

measure growth on state assessments and not necessarily the level of proficiency of the

individual student. TEAM scores were determined for teachers utilizing the 19-point criteria

rubric for teacher observations. The rubric was developed for educators to have constructive

conversations and to promote best practices for teachers to utilize in their classrooms. TVASS

growth scores and the TEAM observation score were combined for the summative evaluation of

section B of the strategic compensation model.


Teachers with more than 19 years of experience and who elected to move to the strategic

compensation plan could not receive a base pay award. Additionally, any employee with over 30

years of experience could not receive a base pay award. The two groups of teachers’ salaries

exceeded the maximum benefit for determining base pay and therefore would have caused those

groups to receive an unfair increase through the new compensation model. Table 2 shows the

percentage increments that were awarded for evaluation scores.

Table 2

Increments awarded for evaluation scores

Evaluation Scores Percentage of Annual Base Pay Award

< 3.49 0%

3.5 – 3.99 1.45%

4.0 – 4.49 1.70%

4.5 – 4.74 1.95%

4.75 > 2.20%

Section C. Section C of the plan designated the criteria for teachers to receive school-

wide bonuses. Each teacher could receive a school-wide bonus, but it could not exceed $2,500.

The bonuses were determined by the percentage of benchmarks achieved by the school during

the academic year. A benchmark rubric was established to determine school-wide awards.

Table 3 shows the salary schedule for school-wide awards.


Table 3

Salary schedule for school wide awards

Benchmarks Met Percentage Award Stage 1 50%

Stage 2 80%

Stage 3 100%

11 100 $2,500 1,250 2,000 2,500

10 91 $2,272 1,136 1,818 2,272

9 82 $2,045 1,023 1,636 2,045

8 73 $1,818 909 1,454 1,818

7 64 $1,590 795 1,272 1,590

6 55 $1,363 682 1,090 1,363

5 45 $1,136 568 909 1,136

4 36 $909 455 727 909

3 27 $681 341 545 681

2 18 $454 227 363 454

1 9 $227 114 182 227

Section D. Section D was aligned to student performance for individual teachers. In

kindergarten through fifth grade, student assessment data for reading was used to award teachers

for Level 4 and 5 student averages. Additionally, student average assessment scores for fourth

and fifth grade math received monetary awards for Level 4 and 5. Middle school teachers for

fifth, sixth, and eighth grades with student assessment scores of Level 4 or 5 in math, science,

English, and social science could also earn monetary awards. Finally, high school teachers who

teach Algebra I or II; English I, II, or III; or U.S. History could earn monetary awards for Level 4

or 5 scores. Table 4 shows each grade level with the monetary award for subject area growth

through assessment level average.


Table 4

Monetary award for subject area growth through assessment level average

Grade Performance Level Award

Kindergarten 1st grade Reading >

Predicted $750

1st grade Reading Level 5

Level 4

$1,500

$750

2nd grade Reading Level 5

Level 4

$1,500

$750

3rd grade Reading Level 5

Level 4

$1,500

$750

4th grade Reading Level 5

Level 4

$1,500

$750

5th grade Reading Level 5

Level 4

$1,500

$750

4th & 5th grade Math Level 4+ $750

Middle School

(Math, ELA, Science, Social Studies)

Level 5

Level 4

$1,500

$750

High School

(Algebra I & II, ELA I, II, & III, US History)

Level 5

Level 4

$1,500

$750

Section E. Hard to staff positions made up Section E of the compensation plan. The

hard to staff positions were defined as areas that had a critical shortage of available teachers.

Severe special education and high school math received the highest compensation rates.

Moderate special education, high school chemistry/physics, foreign language, and high school

language arts teachers also received stipends. Teachers that taught out-of-field only received

50% of their stipend until they received proper licensure. Table 5 shows the compensation

schedule for hard to staff areas.


Table 5

Compensation schedule for hard to staff areas

Hard to Staff Positions Monetary Compensation Amount

Special Education Moderate $1,000

Special Education Cognitive $2,000

High school Math $2,000

High School Chemistry/Physics $1,500

High School Foreign Language $1,500

High School Language Arts $1,000

Section F. The fifth section in which classroom teachers were provided extra monetary

compensation was based on leadership roles. High school department heads, elementary and

middle school grade level chairpersons, and Stage 3 academic intervention coaches could all earn

stipends for their additional work. Table 6 shows the positions and compensation levels.

Table 6

Positions and compensation levels

Extra Duty Positions Supplement Amount

High School Department Heads (Math, Science, ELA, Civics) $1,500

Elementary and Middle School Grade Level Chairpersons $1,500

Stage 3 Coaches (2 per school) $1,750

Section G. The last monetary bonus offered under the strategic compensation plan was

for principals and assistant principals. The section labeled Effective Principals allowed

principals to receive an annual school-wide bonus award up to $5,000 based on the TEAM

evaluation score. There was a 20% reduction for each score drop below Level 5. Additionally,

principals and assistant principals could earn awards based on the school-wide benchmark rubric

score following each academic year. Table 7 shows the compensation schedule for principals

and assistant principals based on the school-wide benchmark rubric.


Table 7

Compensation schedule for principals and assistant principals

Benchmarks Percentage Award Level 1

20%

Level 2

40%

Level 3

60%

Level 4

80%

Level 5

100%

11 100% $5,000 1,000 2,000 3,000 4,000 $5,000

10 91% $4,545 909 1,818 2,727 3,636 $4,545

9 82% $4,090 818 1,636 2,454 3,272 $4,090

8 73% $3,636 727 1,454 2,182 2,909 $3,636

7 64% $3,181 636 1,272 1,909 2,545 $3,181

6 55% $2,727 545 1,091 1,636 2,182 $2,727

5 45% $2,272 454 909 1,363 1,818 $2,272

4 36% $1,818 364 727 1,091 1,454 $1,818

3 27% $1,363 273 545 818 1,090 $1,363

2 18% $909 182 364 545 727 $909

1 9% $454 91 182 272 363 $454

The district also had guidelines in place for all certified school-based employees. The

guidelines were put in place during the initial year of implementation and remained in place with

minor edits and changes. The following were the district guidelines.

District Alternative Compensation Eligibility Rules:

1. To be eligible to participate in the Alternative Compensation program all teachers and

principals must meet all of the following general eligibility requirements.

2. Requirements may change annually. All educator inquiries/issues with requirements

shall be reviewed by the Steering (Design) Committee, which consists of teachers,

principals, board members, community members, and the Director of Schools and

approved annually by the Board of Education.


3. All new employees entering the district will participate in the Alternative Compensation

Plan.

4. No employees hired prior to July 25, 2011, shall have the ability to join the alternative

compensation plan after the July 30-August 3, 2012 enrollment window.

5. Current employees with the district who joined with 20 or more years of teaching

experience are not eligible for increases to annual baseline pay in any year but shall be

eligible for all bonus and incentive awards.

6. Employees as of SY 2011-12 who joined with 19 or less years of teaching experience

shall be eligible for increases to annual baseline pay for up to 30-years of teaching

experience at which time annual baseline increases shall no longer continue. Employees

who joined with 20 or more years of teaching experience as of SY 2011-12 shall be

eligible for all bonus and incentive awards based on program funding.

7. Employees must be employed in a campus-assigned position within the first 20 days of

school.

8. Central office staff, substitute teachers, or student teachers are not eligible. Hourly

employees are not eligible to participate in the alternative compensation program.

9. Eligible employees must hold a valid teaching license from the State of Tennessee to be

eligible to receive bonus awards.

10. Employees must be supervised and evaluated by the principal or his/her designee of the

campus where they are serving students. (This does not apply to Principals)

11. For applicable employees: employees must review instructional-linkage and assignment-

verification information for accuracy (Teachers are responsible for claiming their

students' individual scores).


12. Employees must attend 94.44% or 170 days of the 180 instructional days identified in the

"instructional school calendar" to receive their school-wide bonus, individual teacher

performance, teacher leader incentive, or principal bonuses. This means that employees

cannot be absent for more than 10 days. Employees who miss more than 10 days will,

however, be eligible for their annual baseline pay increase per annual teacher evaluation.

The following types of leave will be held harmless (not count as days absent) and match

the Board's current policies and term definitions: military leave, FMLA - family medical

leave (must be authorized through the Central Office), assault leave, jury duty, and off-

campus duty (such as professional development opportunities or activities approved by

the District).

13. Bonuses and incentive awards are not ensured to occur every year. They are contingent

upon program funding. Only increases to annual baseline pay increase are guaranteed.

14. Employees must be continuously employed in a tested position until the last day of

school to receive the Individual Teacher Performance bonus.

15. Employees must be in "good standing" to receive any bonus. "Good standing" means

that all paperwork/certifications are up to date.

16. Bonuses for employees who transfer from one bonus-eligible position to another bonus-

eligible position during the school year shall be determined on the basis of the bonus-

eligible position held for the majority of the school year.

17. Employees who are involuntarily transferred to another school within the district may

permanently "opt out" of the Alternative Compensation Plan. The employee shall return

to the present BEP salary schedule for the corresponding years of experience and

degree(s) held by the employee. The employee shall not be entitled to any payments


within the scope of the Alternative Compensation Plan in the school year for which they

"opt out". The employee can never return to the Alternative Compensation Plan once

such option is exercised.

18. Employees will not be eligible for bonuses that transfer from a bonus eligible position to

a non-bonus eligible position.

19. Employees who work at multiple schools will receive awards determined by the school

for which they are evaluated.

20. Employees who voluntarily elect (except for retirement) not to return to the district in the

following year for which bonuses are rewarded shall not be eligible any bonus award

payments except Hard to Staff, Department Head, Grade Level Chairperson, and Stage 3

Coaching duties.

Purpose of the Study

The purpose of this study was to determine the teachers’ perceptions of the strategic

compensation model and its influence on teachers in the district. More specifically, the study (1)

investigated the perceptions of faculty members concerning the strategic compensation plan; (2)

identified perceived changes in teacher behaviors as a result of the strategic compensation plan;

and (3) examined whether the teachers’ perceptions of the strategic compensation plan affected

decisions to continue or discontinue employment in the district. For purposes of this study, the

dependent variables were individual faculty members with consideration of gender, years of

teaching experience, licensure status, tenure, evaluation rank, and participation in the plan. The

independent variables were the faculty participants’ perceptions of traditional and non-traditional

payment plans.


Conceptual Framework

The conceptual framework for this study was based on two significant models that have

been utilized for the past few decades to study how workers perceive their jobs. These theories

crossed all lines of the public and private sectors, as well as the blue-collar versus white-collar

view of how people perceive job worth and satisfaction. The framework models illustrated

relevance for those inside and outside of educational institutions.

Because teacher perception of strategic compensation was the basis for this study, the two

theoretical frameworks used were equity and motivation. These theories were chosen because of

their qualitative values and descriptors. The researchers utilized these theories in the

development of the research instruments used for this study. Both theories have unique

paradigms that show how employees can have opposing perceptions in response to the same

question even when they have similar jobs. The researchers analyzed the teacher perceptions

from the questionnaire, focus group, and individual interview responses, and afterwards,

compared and contrasted them with the theories of equity and motivation.

Adams Equity Theory. Equity theory (Huseman, Hatfield, & Miles, 1987) proposed

that as a result of the distress of either over-reward or under-reward, inequitably rewarded

individuals should experience lower levels of job satisfaction than equitably rewarded

individuals. Figure 1 shows the balance needed for employees to perceive that job satisfaction

experiences are generally seen as a positive experience. It also illustrates the importance of the

balance of the scales, specifically, that input and output ratios are crucial pieces of the theory and

not simply a rendering of whether or not rewards are appropriate for efforts.


Figure 1: Adams Equity Theory.

Adapted from “Adams Equity Theory” by Alan Chapman, 2015, Retrieved from http://www.businessballs.com/adamsequitytheory.htm. Copyright Businessballs 2015. Reprinted with permission.

Adams first introduced his equity theory in 1963 as cited in Huseman et al. (1987). He

suggested that a motivational tension was created when a worker sees a sense of inequity when

comparing a worker’s job inputs and outcomes (rewards) with other workers. He postulated that

if one perceived this inequity he or she would feel either anger or guilt. However, in practice,

equity theory presents a number of challenges (p. 222). When applied to performance-based pay

systems in a school setting, teachers could question the comparative fairness or procedural

justice of the rewards at their campuses based on several factors including student assignment to

classes, the difficulty level of the content taught, and the relative support given to teachers. A

performance-based pay system that rewards teams rather than individual teachers may address

some of these potential equity issues.


Herzberg’s Motivational Theory. Frederick Herzberg’s (1968) motivation-hygiene

theory was developed from research that indicated that there was a separate and distinct

difference between job satisfaction and job dissatisfaction. For example, when workers were

asked about what factors contributed to job satisfaction, they tended to answer with

characteristics such as achievement, recognition, and the work itself. When asked about what

factors contributed to job dissatisfaction, they tended to answer with characteristics such as

supervision, relationships, work conditions, and salary. Herzberg noted that the characteristics

that produced job satisfactions were intrinsic motivators and that the characteristics that

produced job dissatisfaction were extrinsic to the job itself. Herzberg called these extrinsic

characteristics hygiene factors in contrast to motivation factors. Figure 2 represents Herzberg’s

visual of hygiene and motivation. This differentiation shows the effect of hygienic factors on

motivation.


Figure 2: Herzberg’s Motivational Theory. Adapted from “Job Satisfaction” by Brian Redmond, 2015, Retrieved from https://wikispaces.psu.edu/display/PSYCH484/11.+Job+Satisfaction. Copyright 2015 Pennsylvania State University

Herzberg (1968) described his theory in contrast to three general philosophies of

personnel management: organizational theory, industrial engineering, and behavioral science.

Rather than concentrating on work efficiency, Herzberg’s theory suggested that the work be

enriched in order to maximize effective use of personnel (p. 58-59). The systematic approach of

motivating employees through manipulating the motivator factor was known as job enrichment.

Job enrichment provided the opportunity for the employee’s psychological growth (p. 59).

Herzberg concludes with the following:

The argument for job enrichment can be summed up quite simply: If you have

someone on a job, use him. If you can’t use him on the job, get rid of him, either


via automation or by selecting someone with lesser ability. If you can’t use him

and you can’t get rid of him, you will have a motivation problem. (p. 62)

The theoretical frameworks influenced the survey instruments (Appendices B-D) used for

data collection and were designed to produce participants’ perceptions of strategic compensation,

teacher behaviors, and the recruitment and/or retention in Rural Southeast School District. These

frameworks also assisted the researchers in their data analysis and were used to organize the

qualitative data related to questionnaire responses, focus group responses, and interview. The

theories were further utilized to understand the motivational benefits of a performance-based pay

system in the elementary, middle, and high school and determine teachers' perceptions of the

strategic compensation program, specifically during the data interpretation phase. Finally, the

concepts of equity and motivation in a school setting guided the conclusions drawn from this

study.

Research Questions

The researchers sought to answer the following questions through this mixed methods

research study:

1) What are the teachers’ perceptions of strategic compensation in Rural Southeast

School District?

2) What teacher behaviors have been affected as a result of the strategic compensation

plan in the Rural Southeast School District according to teachers’ perceptions?

3) How has strategic compensation affected teacher recruitment and/or retention in Rural

Southeast School District according to teachers’ perceptions?


Significance of the Study

The significance of this study centered on the need to identify teachers’ perceptions of the

strategic compensation program in Rural Southeast School District. In January 2010, the state of

Tennessee became one of the first states to apply for Race to the Top (RTTT) funding from the

U.S Department of Education. Tennessee finished second to Delaware in the nationwide

competitive grant application score, but was the top winner in funding for Phase 1 with a $500

million award. The RTTT grants asked states to show how they would advance public education

reforms in four specific ways; adopting college and career ready standards and assessments, data

systems that show growth and success, teacher development and retention, and turning around

low-performing schools (USDOE, 2015b). The Tennessee First to the Top program was

established by the state legislature immediately after receiving the USDOE notification of the

RTTT award. Tennessee has invested a substantial amount of the RTTT grant money into pilot

programs, and the validation of successful implementation could expedite the education reforms

outlined under state and federal legislation (TNGOV, 2010).

Implementing a successful strategic compensation program requires teachers’

involvement. School districts benefit from teachers playing an active role in the process of

creating and implementing future programs. This research attempted to provide the perceptions

of Rural Southeast School District’s teachers toward the implementation of their strategic

compensation program. Knowing how these teachers perceived the compensation program as

well as understanding how they believed their behaviors had changed as a result could be very

beneficial to Rural Southeast School District, as well as other districts in and outside of

Tennessee. Additionally, local and state officials throughout Tennessee will benefit from the


findings regarding how strategic compensation affected teacher recruitment and/or retention

according to teachers’ perceptions.

This study is also beneficial because it encourages teachers to collaborate with one

another to improve student outcomes. One of the most important rationales for using strategic

performance-pay is to encourage and motivate teachers to perform at their best. Therefore,

stakeholders in the educational system (including students themselves) should be interested in

whether or not strategic performance-pay motivates their teachers.

The factors relating to performance-based pay are also significant. According to Harvey-

Beavis (2003), there are many possible facets to strategic compensation plans based on the needs

of the district. For example, performance measures can be based on the performance of each

school as a whole or each teacher as an individual unit, and may or may not involve monetary

incentives. Some strategic plans include measures such as school or individual sanctions for

poor performance, whereas others are designed with tiered levels of rewards for positive

performance above a given baseline expectation.

Finally, there are a wide variety of options for compensation or incentives in strategic

compensation plans based on the needs of each district, as each district can elect whether to

reward with bonus pay, compensatory days, or other benefits. Not only do districts have the

ability to design the measures and types of incentives given, they may also adjust the scope of

those benefits to match the needs and capabilities of the system. Because strategic compensation

can be implemented in such a variety of ways, studying the type of program implemented in

Rural Southeast School District could lead to a greater understanding for other districts as they

seek to create their own strategic compensation plans.


Delimitations

The Rural Southeast School District served more than 1,200 students in Tennessee. The

Tennessee Department of Education designated the district as an exemplary school district.

Three schools (one elementary school, one middle school, and one high school) comprised the

district.

This study was delimited to certified, school-based instructional and administrative

personnel employed by Rural Southeast School District. The district was chosen because in the

2011 - 2012 school year it implemented a merit-based pay component as a part of its overall

compensation plan. Any inferences beyond this group should be drawn only after careful

consideration of the target population.

Definitions

TVAAS - According to the Tennessee Department of Education (2014b), “The Tennessee

Value-Added Assessment System (TVAAS) measures the impact schools and teachers have on

their students’ academic progress. TVAAS measures student growth, not whether the student is

proficient on the state assessment” (para. 1). The data collected by TVAAS is used strategically

to help educators make informed decisions about what is best academically for their students.

TVAAS data is also factored into the teachers’ overall evaluation scores. For teachers who are

in tested subject areas and grade levels, TVAAS data counts as 35% of their overall evaluation

score. For teachers in non-tested grade levels and subjects, TVAAS data counts as 25% of their

overall evaluation scores (TNDE, 2014a).

Strategic Compensation - For the purpose of this study, strategic compensation was

defined as any performance-based or merit pay that is awarded to teachers as the result of

excellent student achievement and teacher evaluations. Strategic compensation also may be paid


to teachers who are recruited to fill hard-to-staff positions.

TEAM - The Tennessee Educator Acceleration Model (TEAM) is the evaluation model

that is used to train and evaluate public school teachers and administrators in Tennessee (TNDE,

2011a). TEAM evaluations incorporate frequent observations both announced and unannounced

and constructive feedback for educators. Using the TEAM rubric, educators work together with

administrators (TNDE, 2011b). The goal of TEAM is to identify what is working well in the

classroom (Area of Reinforcement), where there is room for improvement (Area of Refinement),

and options for professional development to support continued growth (TNDE, 2011a).


Literature Review

In this chapter, the review of past research looks at studies conducted and the

deliberations that must be considered when implementing a strategic compensation program. In

the first section, the review examines different types of performance-based pay and how they

have been implemented in the past. The second section focuses on the benefits of performance-

based pay for teachers. Past positive outcomes for districts, teachers, and students as well as

other stakeholders will be discussed. The third area for review is drawbacks of performance-

based pay.

The fourth section of this chapter will review how teachers perceive strategic

compensation. Understanding how teachers have viewed performance-based pay is essential,

especially when school districts plan to use financial rewards to motivate teachers. The fifth

section will explore past literature regarding changes in teachers’ classroom behaviors following

performance-based pay implementation. Research findings on classroom behaviors are

discussed first, focusing on subsequent areas of teaching performance, expectations, and student

achievement. The final section of this chapter will examine hiring and retention practices of

school districts following the implementation of performance-based pay. There is also a brief

discussion of why teachers may be drawn to a system that is performance-based and whether

such a plan would cause employees to want to leave the system.

Performance-Based Pay

In a study conducted by the Center for American Progress, Brenneman (2014) noted that

even after gaining experience, most teachers were not likely to see major salary gains. The

United States offers low salaries for teachers and provides few salary growth opportunities,

unlike other developed countries. Japan and Korea, for example, have increased the salaries of


elementary school teachers by almost 80% in the past 15 years. The United States, in

comparison, had only increased the salaries of elementary school teachers by approximately 25%

in the past 15 years (Brenneman, 2014; Organization for Economic Co-operation and

Development, 2014). According to Brenneman (2014), there were only four states (Connecticut,

Maryland, New Jersey, and New York) that allow the highest pay scale for teachers to exceed

$60,000. New York offered the highest maximum salary of $90,700; however, New York also

had a relatively high cost of living.

While other professions may have the opportunity to earn many types of additional pay or

bonuses, there are usually only two options available for teachers to increase their salaries –

performance pay and professional development (PD) pay. According to Brenneman (2014), both

of these options allowed high performing teachers to earn bonuses in addition to their regular

salaries. In many cases, teacher bonuses were dependent on students’ test scores. This bonus

plan was undesirable to teachers because they believed it to be flawed.

Even though teachers are concerned with how performance-based bonuses are calculated

and the impact test scores may have, they understand the need for improving their salaries and

being recognized as professionals. Teacher accountability continues to dominate the current

educational discourse as attention is focused on the role teachers’ play in affecting student

achievement as measured by test scores and dropout rates. Consequently, the effectiveness of

teacher strategic compensation pay has become an issue of increasing importance.

Harvey-Beavis (2003) suggested that performance-based pay plans can have a wide range

of frequency and duration; checkpoints may be set up for multiple measures during a school

year, annually, or multi-year depending on the needs of the system. Likewise, incentives may be

given at each checkpoint or spread out, occurring at fixed points such as every three years with


experience-based scheduled salary increases. In addition to duration and focus, there were also

many options for the measures and incentives themselves. Districts may decide to utilize

principals or other internal groups to measure performance or use an outside service or counsel

to assess performance. Performance itself can also be defined in many ways and strategic plans

can take into account many different measures to generate a perception of success or failure.

According to Harvey-Beavis (2003), some common teacher-centered measures, whether

alone or in combination, included classroom observations, state teacher assessments, evaluation

of teacher qualifications, National-Board style teacher portfolios, and professional growth of

teachers through training or further education. Teacher-centered measures were often coupled

with student-centered measures as well, which frequently involve comparison of standardized

assessments to ascertain whether students are making gains, defined as group increases in overall

average score, from year to year or course to course. Each plan has the potential to measure

goals that are customized to the needs of the district, whether related to faculty retention and

recruitment or student performance.

Goldhaber, Dearmond, and Deburgomaster (2011) recognized that there was not

sufficiently researched evidence about the effects of differential monetary incentives in

education (pp. 441-442). Typically, researchers have made inferences about the level of

incentives by observing teachers in a traditional compensation system that was based on the

experience and education levels of teachers rather than on their performance. Direct analysis of

incentive reforms can be difficult to find. Goldhaber et al. sought to survey and examine

teachers in order to identify their views on strategic compensation plans in Washington.

Goldhaber et al. (2011) analyzed teacher attitudes and perceptions about compensation

reform using the Washington State Teacher Compensation Survey (WSTCS), an original survey


sent to 5,238 teachers in Washington during the spring of 2006 (p. 446). This survey asked

teachers the following question:

How much do you favor or oppose giving extra compensation to the followng

types of teachers?

a) teachers who specialize in hard-to-fill subjects, such as science and

mathematics;

b) teachers who work in tough neighborhoods with poorly performing schools;

c) teachers whose students make greater gains on standardized tests than similar

students taught by other teachers;

d) teachers who receive accreditation from the National Board of Professional

Teaching Standards (NBPTS), a voluntary program of national certification.

(pp. 446-447)

The purpose of their study was “to highlight important distinctions among teachers and

schools that have generally been ignored in prior research and that have important implications

for (incentive-based) reform implementation” (p. 442).

Goldhaber et al. (2011) found that teachers who related to and put more trust in their

colleagues were less likely to support merit pay, while those who build strong connections to

their administration were more likely to do so. This division in teacher attitudes was an indicator

of some of the other perceptions of fairness or unfairness associated with incentive pay in

schools. Whether or not teachers support salary reform largely depends on whether they feel the

system will reward all individual teachers fairly. If a system favored some teachers over others

when the unrewarded teachers felt they did the same amount or more work, job satisfaction for

those teachers who do not receive rewards decreased drastically. Discussions of these two


issues, fairness and job satisfaction, were found in much of the research on incentive pay and

teacher perceptions.

The analysis associated with the study of Goldhaber et al. (2011) treated the various

incentive plans as if they were separate from each other, but suggested that future research may

need to be centered on analyzing combinations of incentives (p. 460). The results from their

study also suggested that secondary school teachers might be more likely to support merit pay.

The researchers noted that teacher opinions about compensation reform implementation needed

to be examined further in order to understand how those perceptions shape the workforce. They

further noted that teacher opinions prove to be a complicated analysis as these opinions involves

their attitudes and all the aspects that influence these attitudes. Their findings seemed to

illustrate the relationship between teacher attitudes toward merit pay and professional norms and

collegiality. These findings appeared to suggest altruistic concerns related to collegial trust

among teachers, and this is consistent with Lortie’s (2002) research. In other words, teacher

opposition to merit pay may be related to the egalitarian ethos of the profession (Lortie, 2002).

Goldhaber et al. (2011) felt that the findings of their study also left many complicated issues

unaddressed, such as the successful adoption of compensation reform depending on the

relationship between districts and union officials.

Lavy (2007) described two primary performance-based pay schemes (p. 89). He noted

that these pay schemes could compensate teachers: 1) based on their individual performance, or

2) based on team/group performance whereas the total team incentive payment is divided among

all team/group members regardless of individual performance (p. 89). He also noted that some

performance-based pay systems involved sanctions for substandard performance. This means

that performance-based pay schemes can incorporate financial penalties for subpar performance.


Lavy (2007) described three main prototypes of performance-based reward programs:

merit pay, knowledge- and skill-based compensation, and school-based compensation (p. 90).

He also noted that merit pay “generally involves individual incentives based on student

performance” (p. 90). However, knowledge- and skill-based compensation usually involved

payment to individual teachers based on teacher performance in the classroom rather than

student outcomes on standardized tests. He further noted, “Knowledge- and skill-based pay

differs from merit pay because it provides clear guidelines on what is being evaluated” (p. 90).

Lastly, he described school-based compensation as pay that involved school-wide bonuses based

on student performance. This last form of compensation would be measured through student

outcomes on standardized assessments overall. In buildings with non-tested grade levels and

subject areas, school-based compensation may be a way for additional teachers to qualify for

performance-based pay.

Performance-based versus outcome-based systems. According to Wisconsin Center

for Education Research (2008), frequently there are misunderstood limitations associated with

performance-based pay systems. They defined two types of strategic compensation as follows:

Performance-based systems (also known as behavior-based systems) tie some

portion of salary to observable teacher behavior, such as demonstration of a

specific pedagogical technique. Outcome-based systems (also known as pay for

performance) link compensation to student performance, such as test scores and

attendance. (Wisconsin Center for Education Research, 2008, p. 1)

According to the Wisconsin Center for Education Research (2008), the most common

merit pay systems are performance-based and outcome-based. Both systems offer incentives for

teachers to continue ongoing professional development to enhance teaching techniques that will


affect student outcomes as well as for aquiring advanced degrees. They also may encourage

teachers to remain in education for the duration of their careers. Even though there are

advantages to both merit pay systems, with outcome-based systems there is also concern that

teachers may focus solely on necessary actions to earn the rewards, which may have a negative

impact on their students.

Subject-area pay. Subject-area pay is used to provide teachers serving in hard-to-staff

subject areas additional pay for their expertise. Goldhaber et al. (2011) noted the research of

Cohen, Walsh, and Biddle who found that 30% of states offer subject-area incentives. Subject-

area incentives vary based on the needs of the state and could include math, science, special

education or any other area of high-need or hard-to-staff positions. Goldhaber et al. (2011)

found that teachers who showed more support for a particular incentive (e.g. subject-area

incentives) were also more likely to say a larger dollar amount was a “fair” incentive in that area

(p. 449). The researchers noted, “As with the merit pay findings, veteran and female teachers are

less supportive of subject-area incentives whereas Hispanic teachers are more supportive” (p.

453). While this finding was noted, the study did not offer any explanation as to why some

teachers are more receptive to particular forms of performance pay. The researchers found that

teachers with middle and high school assignments in mathematics and science were more

supportive of subject-area bonuses. This finding did not surprise them because teachers of

subjects that offer bonuses would naturally favor receiving additional pay for continuing to teach

that subject. They further noted, “When it comes to the trust factors, it appears that a teacher’s

support for subject-area incentives is not systematically related to impressions of his or her

coworkers” (p. 453). The teachers who favored subject-area pay did so knowing that other

teachers in the district would be ineligible for the same bonuses they received.


Combat pay. Goldhaber (2009) described pay incentives designed to entice teachers to

teach in high-needs schools as combat pay (p. 15). The combat pay expression is utilized as a

comparison between teachers who agree to work in low performing schools in much the same

way that the military gives combat pay to soldiers who serve in war zones (Wickham, 2011).

Goldhaber et al. (2011) found that when given the choice between merit-pay, subject-area pay,

combat-pay, and NBPTS incentives, teachers prefered combat pay. The researchers theorized

that combat pay may have been preferred because all teachers in the school were eligible for

earning the bonus, whereas the other incentives were more exclusive. The reasearchers indicated

that with the exception of certain variables (experience, student poverty, and mathematics

performance), support for combat pay is not systematically related to indvidual or workplace

characteristics (p. 454).

Goldhaber et al. (2011) found that teachers in schools with higher math scores appear to

be less supportive of combat pay. They further noted that teachers in schools with higher

reading scores are more supportive of combat pay. The researchers were surprised by this

finding and did not offer an explanation as to why the reading teachers were more supportive of

combat pay. As a means of summarizing their findings in relation to secondary school teachers,

Goldhaber et al. stated, “When it comes to types of reform, teachers are more supportive of

combat pay and least supportive of merit pay” (pp. 459-460).

NBPTS incentive. Goldhaber et al. (2011) collected data related to the incentive pay of

teachers who are certified by NBPTS (p. 454). The USDOE provides $5,000 for NBPTS

certification. The researchers found that teachers already receiving that incentive were

supportive of the extra pay given to teachers with NBPTS certification. They also found that

teachers who feel more trust and respect toward their principal are more supportive of NBPTS


incentives (p. 454). The researchers further noted that “teachers who identify themselves as

members of teachers’ unions are more supportive of incentive pay for NBPTS certification after

controllling for school district effects and the clustering of teachers within schools” (p. 454).

Goldhaber et al. (2011) acknowledged that their findings left many complicated issues

unadressed such as why the teachers receiving the NBPTS incentives felt more trust toward their

administration or why members of unions prefered that incentive.

Individual and peer group compensation. These compensation classifications are

beneficial in their own way. Regardless of the differences, they are both based on value-added

measures. These measures are defined as “growth measures used to estimate or quantify how

much of a positive (or negative) effect individual teachers have on student learning during the

course of a given school year” (The Glossary of Education Reform, 2013, para. 1). These

measures can be applied to individual teachers or peer groups.

The Tennessee Department of Education (2014b) defines growth scores under the

Tennessee Value-Added Assessment System (TVAAS) model. The model measures individual

student learning progress through annual state assessments. The data collected by TVAAS was

utilized in two strategic ways in school systems. The first utilization of TVASS data was to

make educational decisions that are best for students and student outcomes. The second

utilization of the data was for the evaluation of individual teachers. TVAAS data counts between

25-35% of their overall evaluation score in the teacher’s annual evaluation.

Monetary earnings, reducing teaching load, promotions, or public recognition. Lavy

(2007) stated, “Although monetary rewards are the most common incentive in performance-

related pay, other incentives can include reduced teaching load, promotion, and public

recognition of outstanding teachers” (p. 89). He noted that rewards could be one-time events or


ongoing events that have the potential to yield permanent increases in salary (p. 89). He further

noted that a reward could be based on: 1) a relative criterion such as the average test score gain

of a teacher’s class relative to the classes of other teachers, or 2) an absolute criterion such the

class average test score being higher than a predetermined threshold (p. 89). In relation to the

monetary value of awards/incentives, he indicated that awards/incentives could: 1) come in fixed

amounts that are equal for all winners, or 2) increase with winners’ levels of achievement (p. 89).

The different types of compensation used by school systems are unique and designed to

appeal to different teachers. For example, a teacher with a family to support may appreciate

monetary earnings as a reward for his or her work. Monetary bonuses may not be as motivating

to some teachers as other incentives. At the same time, a mid-career teacher may appreciate

promotions or public recognition more. Veteran teachers with immense experience may

appreciate reducing teaching loads the most. Both Caillier (2010) and Wragg et al. (2002) found

that rewards, such as paid time off, were seen as more valuable to teachers. Working conditions

including administrative and psychological support and parental involvement were more likely to

motivate better quality instruction.

Lavy (2007) believed, “tying teachers’ pay to their classroom performance should

improve the current educational system both by clarifying teaching goals and by attracting and

retaining the most productive teachers” (p. 87). His study sought to thoroughly explore

performance-based pay and the challenges and difficulties associated with its implementation.

The researcher stated, “In the teaching profession, earnings are based primarily on input (that is,

skills and time worked), rather than on output” (p. 88). Pay systems based on input are based

solely on level of degree (skills) and years of experience (time worked).


Lavy (2007) advocated for a salary structure that was results-oriented (p. 88). He stated,

“Moving to an earnings structure that ties pay—at least partially—to some performance

indicators should thus improve the current [pay] system” (p. 88). Performance-based pay

typically involved some objective assessments of schools’ or teachers’ effect on student

outcomes to determine success. In other words, performance-based pay is a pay structure

denoted by its linkages to measurable performance indicators.

Benefits of Performance-Based Pay

There are many benefits to performance-based pay implementation. As noted in earlier

studies, incentive pay schemes did not damage teacher collaboration in schools and may have

even increased teacher cooperation (Jones, 2013; Wells, 2011; Yuan et al., 2013). This section

of the literature review will examine researched benefits of performance-based pay including the

following subsections: increased group work, increased accountability, and stakeholder benefits.

Increased group work. Wisconsin Center for Education Research (2008) stated:

Group-based rewards recognize the collaborative nature of any school’s

effectiveness and reward teachers for their collective effort. Group-based

systems are generally less costly to administer than their individual-based

counterparts. However, it is hard to screen out effects of the district, prior

schools, parents, and the community. (para. 14)

This suggests that performance-based systems may be beneficial by increasing innovation

among groups of teachers. Professional development programs are important to assist teams of

teachers as they strive to increase their knowledge and skills collaboratively.

Increased accountability. Performance-based programs may lead to an increase in

classroom recordkeeping. This is done to accommodate the differences in teaching methods,


which may increase compensation benefits. For example, Lavy (2007) noted increased

recordkeeping "requires school principals to monitor closely the quality of their teachers’ work”

(p. 91). The increase in accountability could lead to better quality teaching. Although these

results may be inadvertent, their residual effects provide an appealing influence of performance-

based pay.

Stakeholder benefits. Lavy (2007) discussed several benefits associated with

performance-based pay programs. He first stated, “Rewarding teachers or schools on the basis of

an agreed metric aligns incentives directed at teachers or schools with those directed at students

and potentially the entire society” (p. 90). The researcher indicated that performance-based pay

programs have the potential to motivate teachers and/or schools to intentionally “take into

account the social returns to education when making choices about their work” (p. 90). For

example, if a student were considering dropping out of school, a teacher who was considering

the benefits to society as a whole may work harder to encourage the student to persevere

knowing how much the community benefits from having educated citizens as well as how much

the student could benefit in the future from completing his or her education.

Lavy (2007) further stated, “Individual performance-based pay schemes improve

efficiency by helping correct distortions in a teacher’s effort that might result from gaps between

[his or] her preferences and those of [his or] her students” (p. 90). One example of this could

occur when a teacher avoids giving homework because she does not want so spend additional

time grading papers even though she knows the extra assignment would benefit her students’

learning. Performance-based pay systems offer incentives to teachers for doing what is right.

Lavy (2007) noted that basing performance on pay has the potential to attract and retain

the most productive teachers. He stated:


Even if teachers are unable to alter their own behavior to enhance performance, as

measured, say, by students' test scores, some people are still inherently better than

others at affecting test scores. Basing pay on output also tends to discourage

teachers who cannot enhance their students' performance from remaining in the

profession. A related point is that output-based pay will create a market for

teaching quality that will help teachers move to schools where their talent is most

highly valued. Equalization between productivity and wages will result, with

poorly performing teachers receiving reduced wages and lower probabilities of

promotion, and more capable teachers commanding better options. (p. 91)

Lavy (2007) suggested that performance-related pay based on individual or school wide

schemes could also improve school productivity by inducing better governance (p. 91). This

benefit implies that principals will be required to more closely monitor the quality of their

teachers’ work as well as provide consistent information, feedback, and guidance (p. 91). Many

critics of traditional education pay systems charge that rewarding teachers for formal

qualifications rather than performance is unfair to exceptional teachers who work harder and

show more effort. Because performance-based pay rewards teachers for how well they meet

expectations rather than rewarding for degrees and years of experience, it may increase support

for public education from politicians and members of the general public (p. 91).

Drawbacks of Performance-Based Pay

While performance-based pay is meant to motivate teachers to achieve at high levels,

there have been some unintentional negative consequences following strategic compensation

implementation. This section of the literature review will examine negative issues that have

resulted from the use of performance-based pay. The following subtopics will be discussed:


student-to-teacher ratio, measurement problems, teaching to the test, negative effects on

motivation and collegiality, unintended consequences, cost of performance-based pay, union

opposition, and non-monetary motivation.

Student-to-teacher ratio. Some performance-based pay systems consider the student-

to-teacher ratio when assigning compensation awards. However, this is not always considered as

a fair method. For example, those teachers with special needs students may have fewer students,

yet have more taxing jobs due to the extra help that these students need. Therefore, since

“compensation investments too often are based on factors unrelated to student achievement,

states and districts should re-examine compensation structures to better support and drive

effective teaching” (USDOE, 2015a, para. 1).

Measurement problems. Research has suggested, “teachers generally want to be held

accountable and supported by a fair evaluation system” (Homeroom, 2010, para. 3). As a result,

it can be concluded that a fair evaluation process measures the accountability of the teacher.

Therefore, teachers that focus on accountability and measure their success through that of their

students’ achievements may be better served through a fair evaluation process, especially if they

show improvements in students’ progress. The compensation program design may not be

effective. For example, those programs that are based solely on test scores may find themselves

at a disadvantage because the awards are not equitable. There are strong arguments suggesting

that student test scores are not reliable indicators of the efficacy of the teacher.

Lavy (2007) noted that performance measurement poses two separate problems for

performance-based pay: 1) agreeing on goals, and 2) evaluating progress towards goals (p. 91).

The researcher stated, “Agreeing on goals is particularly difficult in education because

competition between public schools is rare” (p. 91). He believed that when parents and students


were unhappy with the choices and options that their local school gave them, they would choose

to move to other schools in the area. Some residents would choose private schools and others

may choose neighboring school districts. However, this choice is too costly for many and not an

option for struggling families. In relation to evaluating progress towards goals in a fair and

accurate manner, Lavy noted that problems arise because the evaluation systems have been based

on proxies, such as self-reported effort and motivation. This study pointed out that it was

extremely challenging to know what an individual teacher contributes to improving student

outcomes (p. 91).

Student testing is also not necessarily effective for teacher evaluations. The emphasis on

student test scores became exaggerated with the No Child Left Behind Act. As a result, teacher

evaluations are commonly based on these scores. If the student exam is ineffective, then the

teacher evaluation will be ineffective as well. For example, “standardized tests are narrow,

limited indicators of student learning. They leave out a wide range of important knowledge and

skills. Most states assess only the easier-to-measure parts of math and English curricula” (Fair

Test, 2014, para. 1).

According to some opponents, there is immense unfairness in basing “teacher personnel

decisions on student test scores [because] students have different levels of ability and

commitment and different experiences outside the classroom, [suggesting that] no two students

get exactly the same amount of parental support” (Kane & Darling-Hammond, 2012, para. 3). It

has also been argued that the test scores be merely starting points as to the efficiency and

effectiveness of the teacher, suggesting that the link is over-emphasized between teacher

appraisals and student assessments. According to some studies, “the right approach to feedback


and evaluation is to combine student achievement gains with other measures, such as systematic

classroom observations and student surveys” (Kane & Darling-Hammond, 2012, para. 15).

This same study suggests that “teachers working with a large contingent of new English

learners or special education students scored lower than when they taught more-advantaged

classes of students. Even teachers of gifted classes were penalized, because their students had

already maxed out on the tests,” emphasizing the over-weighting of student assessments on

teacher appraisals (Kane & Darling-Hammond, 2012, para. 21). While gifted students tend to

have high achievement scores, they may be unable to show high growth scores because they

have already scored as advanced in the past. Moving students that are within the top 10% of the

assessment score is extremely challenging. The National Research Council and the Educational

Testing service emphasized this challenge of moving gifted students, concluding

Ratings of teacher effectiveness based on student test scores are too unreliable—

and measure too many things other than the teacher—to be used to make high-

stakes decisions. Test score gains can reflect a student's health, home life, and

attendance; schools' class sizes and curriculum materials; and the influence of

parents, other teachers, and tutors. Because these factors are not weighed,

individual teachers' scores do not accurately reveal their ability to teach.

(Kane & Darling-Hammond, 2012, para. 24)

Teaching to the test. Guisbond et al. (2012) found that evaluations based on test scores

can harm educational quality because the evaluations influence a teacher’s career, which may

intensify “incentives to narrow the curriculum and teach to the test” (p. 2). Thus, less

consideration is provided for teacher collaboration and creativity. As a result, this type of

evaluation does little to stimulate the imagination of either the teacher or student.


Under a performance-based system, teaching methods may change. This is especially

true if the compensation is based on student test scores. An example of unwanted teacher

behavior may be a focus on test taking rather than on the curriculum. This is commonly blamed

on the No Child Left Behind Act (Walker, 2014). Thus, as Walker (2014) points out:

The law is uniformly blamed for stripping curriculum opportunities… imposing a

brutal testing regime that has forced educators to focus their time and energy on

preparing for tests in a narrow range of subjects... For students in low-income

communities, the impact has been devastating (p. 2).

Therefore, in the quest to achieve higher test scores, students are unprepared for

life and higher education opportunities. Because of the focus on test scores, Walker

(2014) continues:

Schools …have been reduced to mere test prep factories, where teachers and

students act out a script written by someone who has never visited their classroom

and where ‘achievement’ means nothing more than scoring well on a bubble test

(p.3)

Many teachers and administrators assert that the No Child Left Behind Act has

“corrupted what it means to teach and what it means to learn … Teachers have to teach in

secret and hope they don’t get into trouble for teaching to the Whole Child instead of

teaching to the test” (Walker, 2014, p. 3).

Lavy (2007) also suggested that basing teacher pay on test scores in certain

subjects might cause the focus of elective courses (viewed as non-core subjects) to

narrow. This may also encourage teaching to the test, which involves honing in on skills

in the classroom that are in direct alignment with the test being used to measure student


performance and/or growth, as well as teacher performance (p. 92). Linking

compensation to test scores may cause teachers to sacrifice the nurturing of curiosity and

innovative thinking to teaching the skills tested on standardized exams, forfeiting all

other curriculum standards. When preparing for exams, teachers focus on the material

that is likely to be found on the exam, such as reading and math, excluding other

curriculum needs, such as the arts and physical education. This may prohibit students

from learning other necessary core skills that would benefit them as they further their

education or enter the workforce.

Figlio and Kenny (2007) also report an increase in teachers using class time to “teach to

the test,” as did Podgursky and Springer (2007). Lavy (2007) describes teaching to the test as

“[sacrificing] the nurturing of curiosity and creative thinking to teaching the skills tested on

standardized exams” (p. 92). For example, a business manager may need to have creative

thinking skills to motivate employees or entice customers to earn a profit. If courses only focus

on standardized testing, then creative and critical thinking skills are not as emphasized during

class. As a result, students have less time for creativity and the opportunity to develop creative

thinking skills. In some schools, test prep takes place during time that would otherwise have

been spent on physical education or music, extra-curricular subjects that students need in order to

gain a well-balanced education (Wragg et al., 2002).

Negative effects on motivation and collegiality. Lavy’s (2007) findings suggested that

providing financial incentives may demoralize teachers, resulting in decreased effort. When

faced with compensation gains, teachers may experience decreased loyalty to their schools and

students. For example, if another school offers a more beneficial compensation plan, teachers


may be more likely to leave their current school in favor for the new school with the increased

compensation plan. However, remaining teachers may experience increased resentment.

Lavy (2007) further noted that performance-based pay has the potential to create

unhealthy competition among teachers. He emphasized that performance-based pay has the

potential to undermine collaboration among teachers. He also noted that the evaluation system

associated with performance-based pay has the potential to negatively impact teacher motivation

by questioning their levels of competence (p. 92). Further, he stated, “Evaluation may also

create new hierarchies by giving administrators an additional source of power over teachers and

the curriculum” (p. 92). This additional source of power would mean that principals would

influence teachers’ pay. Whereas in a traditional pay system teachers are rewarded based on

their level of education and years of experience, in a performance-based pay system principals’

evaluations may be the deciding factor in determining whether teachers receive bonus pay.

Unintended consequences. Lavy (2007) discussed the unintended consequences

associated with potentially unethical behavior (p. 92). He stated, “Unintended consequences

may also arise if teachers ‘game play’ and develop responses that generate rewards contradicting

the profession’s spirit. In other words, measuring student output may stimulate teachers to

participate in inappropriate or deviant behavior such as cheating” (p. 92). The research of Jacob

and Levitt (as cited in Lavy, 2007) indicated that cheating occurred frequently after changes in

teacher incentives. They detected cheating in approximately 4% to 5% of the classes within their

research sample (p. 92).

Lavy (2007) suggested that providing financial incentives to improve performance may:

1) demoralize teachers, and thereby promote reduced work effort, and 2) undermine intrinsic

motivation, which is the sense of duty and satisfaction that motivates coming to work (p. 93). He


also noted that teachers might devote a disproportionate amount of time to “bubble students”—

those students who are most likely to improve their test scores (p. 93). He further stated, “The

highest- and lowest- performing students may consequently be neglected because they do not

promise adequate returns on investments of teachers’ quality time” (p. 93).

Cost of performance-based pay. Lavy (2007) stated, “The risks posed to teachers by

performance-based pay could lead them to demand high compensation, which could in turn raise

the cost of education” (p. 93). Most public school systems have limited sources of tax-based

income and would be unable to provide higher levels of pay for local teachers unless the state or

federal government provided grants. He noted that performance-based pay exposes employees

to earnings variability beyond their control such as changes in pay as a result of a poor testing

year. The teachers cannot control how well the students perform on the assessments. They can

only control how well they teach.

Lavy (2007) further stated, “If teachers, like other workers, are risk averse, inducing them

to accept a risky compensation packages will entail higher average pay overall” p. 93). The

researcher emphasized that implementing performance-based pay is easier in small organizations

than in large organizations, such as public school systems with sizeable teaching staffs. He

found that adequately evaluating each teacher would be costly and require substantial resources,

if conducted routinely.

Lavy (2007) found “improved productivity in the private sector can generate added

income to help mitigate budget problems, but enhancements to productivity in public schools has

no such effect” (p. 94). This means that a business has the potential to grow additional income

because of higher productivity; however, school systems, which are funded through tax dollars,

do not receive additional funds as a direct result of higher productivity. In summary,


performance-based pay programs have the potential to incur high average costs over the long run

because of multiple variable financial risk factors.

Union opposition. Ramirez (2010) found unions commonly oppose different

compensation packages. In fact, “unions are skeptical about promises of extra bonus money

because they realize that money is in short supply. They know that teachers' salaries function in

an almost zero-sum environment” (p. 57). This opposition may be attributed to understanding

that “awarding bonuses usually means diminishing cost-of-living raises for the entire teaching

corps” (p. 57).

Furthermore Ramirez (2010) noted, “The union understands that many of its good

teachers will lose out” when money for salaries in performance-based pay systems becomes

insufficient (p. 57). When faced with a new pay structure in Denver, the union was able to

negotiate an understanding that it would not take effect until voters passed a $25 million tax

increase to fund the plan (p.57).

Lavy (2007) suggested that teacher unions worldwide strongly oppose performance-

based pay. He stated, “Unions view wage differentiation on the basis of subject taught, as well

as any sort of subjective evaluation of teachers, as threats to their collective bargaining strategies

and therefore reject them [wage differentiation and subjective teacher evaluation] outright” (p.

93). He also noted that union objections appear to reflect the direct opposition voiced by

teachers. He further stated, “Teachers see performance-based pay supported by unfair

evaluation, as a threat to their autonomy” (p. 93).

Non-monetary motivation. Non-monetary motivators can include achievement,

recognition, and responsibility. They are intrinsic and provide long-lasting employee

satisfaction, are less costly, and generate a desire to succeed. Conversely, hygienic factors are


extrinsic to the job and include security, wages, and working conditions. Herzberg (as cited in

Cummings, 1975) called these "hygienics'' because their application merely "cleans up" the work

environment. Their efforts are temporary, more costly, and lacking in true motivational value (p.

35). Lavy’s (2007) work supported the assumption that teachers are often movtivated intrinsicly.

He explained that teachers frequently had a desire to work with children and see them succeed,

placing value on their success and growth, which led to connections and relationships, an aspect

that performance-based pay may not measure in its evaluation of teacher performance (p. 93).

Lavy (2007) stated, “A frequent criticism of performance-based pay is that teachers, as

professionals relatively immune to motivation by pecuniary rewards, will not respond to

financial incentives” (p. 93). In other words, he is suggesting that teachers are more influenced

by intrinsic factors, such as purpose and a love for students and teaching rather than financial

gain. He suggested that because teachers are not primarily motivated by financial incentives,

monetary rewards have the potential to “inflame resentment toward management [administrators]

and decrease employee loyalty, both of which could reduce productivity” (p. 93). He further

suggested that nonmonetary rewards, such as additional holidays or time off, might serve as

better motivators than financial incentives.

What drove teachers to update and improve were other non-salary factors like their

vacation schedules, parent and principal support, and the availability of professional

development. As Herzberg’s theory suggests (Cummings, 1975), teachers’ job satisfaction may

not be contingent on salary itself, but rather more on achievement and recognition. Herzberg’s

hierarchy of motivators and hygiene factors reveals that factors producing job satisfaction

(motivators) are separate and distinct from the factors that lead to job dissatisfaction (hygienics).


Teacher Perceptions of Strategic Compensation

When teachers are asked to give an opinion on performance-based pay, their responses

are invariably mixed. Growing contingents of teachers feel that pay-for-performance schemes

could be a means of motivating teachers to achieve and to reward their efforts. Others maintain

that such programs only lead to more work, more stress, and less job satisfaction. Several key

issues play into whether or not teachers support performance incentives. This section of the

literature review will examine past research that illustrates the range of teacher perceptions of

performance-based pay. The teacher perceptions of strategic compensation is this section

include perceptions of teachers with different demographic backgrounds, job satisfaction,

competition among teachers, lack of confidence in the compensation system, and reasons for

becoming a teacher.

Perceptions of teachers with different demographic backgrounds. When attempting

to discern teacher perceptions towards merit pay, demographics play a key role. Researchers

have noted several characteristics of teachers that make them more or less likely to support

incentive systems. Teachers who are older, have more years of experience, have more years of

training, and those who started their careers at a higher base salary are all less likely to support

merit pay (Jones, 2013; Muralidharan & Sundararaman, 2011). Additionally, teachers who are

young and/or female also respond less favorably to pay-for-performance incentives, possibly due

to fears of unfair recognition (Goldhaber et al., 2011). Conversely, survey results have shown

that Hispanic teachers, male teachers, and teachers employed by lower-SES schools/districts are

more likely to support incentive programs (Goldhaber et al., 2011). One study surveyed four

such high-poverty schools and found that within those schools 70% of teachers agreed with the

notion of more pay for more work and 67% supported elevated salaries for teachers working in


“hard-to-staff” schools (Wells, 2011). While these statistics specifically refer to teachers in

high-poverty, urban schools, the phenomenon is not completely isolated.

Kelley, Heneman, & Milanowski (2002) found that teachers working under a pilot

incentive program in Kentucky reported that their system gave them a clear set of attainable

goals, focus in their curriculum, and accountability for their performance. Similarly, the faculty

of the Ladue School District in suburban St. Louis is glad to be part of one of the longest running

merit pay systems in the United States. In response to a 2001 survey, 79% of Ladue's teachers

responded with a positive remark when asked if the incentive system motivated them to improve

their teaching (Morice & Murray, 2003).

Unfortunately, within the research available, negative teacher perceptions of

performance-based pay are still more prevalent. The largest concern teachers have regards the

means by which their performance will be judged and subsequently rewarded. Many teachers

fear the stud ent achievement data will become the most important factor in their incentive

awards, which is viewed as invalid, unfair, and thus inappropriate (Wells, 2011; Wragg et al.,

2002; Yuan, et al., 2013). One of the reasons teachers feel thus is that circumstances beyond

their control, such as students' home lives, parental support, tardiness and/or truancy, have a

significant impact on student academic achievement. If teachers are judged based on a

culmination of factors that may have nothing to do with their teaching ability, then they fear their

reward will be similarly invalid (Figlio & Kenny, 2007; Yuan et al., 2013). Surveyed teachers

also reported concern over certain teachers receiving additional awards due to their association

or friendship with the administration. In effect, teacher’s worry faculty bootlickers will receive

more than their share of incentives while hard-working, deserving teachers go unnoticed

(Clabaugh, 2009; Marsden & Belfield, 2006).


Job satisfaction. Related to these perceptions, studies have shown that teachers do not

feel any increase in job satisfaction when working under an incentive system (Abd-El-Fattah,

2010). Some of this lack of enthusiasm may have to do with the way the pay-for-performance

can turn teaching into a competition among teachers. According to one study, stress is high and

morale is low for many teachers within the U.S. (Strauss, 2013). In fact, due primarily to these

two factors, “their level of satisfaction has dropped 23 percentage points since 2008 and is at its

lowest in 25 years” (Strauss, 2013, para. 1). This dissatisfaction is further increased due to

modern reforms aimed at increasing student achievement. For example, the Common Core

Standards are believed to increase student achievement by only 17% of teachers (Strauss, 2013).

These teachers assert that “modern school reform — with its emphasis on getting rid of bad

teachers, assessing teachers by student standardized test scores, and rewriting tenure and

collective bargaining laws - essentially demonizes them,” which decreases morale even further

(Strauss, 2013, para. 3). Part of this is due to stress. According to reports, 51% of teachers

report feeling under great stress several days a week, an increase of 15% over 36% of teachers

reporting that level in 1985 (Strauss, 2013).

The increasing rate of job dissatisfaction among teachers is alarming for a myriad of

reasons. For example, “teachers are arguably the most important group of professionals for our

nation’s future” (Bishay, 1998, p. 149). Therefore, an increase in dissatisfaction suggests that

they may not be as effective at their jobs.

Bishay (1998) utilized a 1985 study conducted by Sylvia and Hutchinson that concluded

teachers were motivated through autonomy. The freedom to create and explore new ideas of

teaching, coupled with intrinsic motivational elements, were much more productive than merit

pay. Bishay’s (1998) findings were similar concerning overall teacher motivation and job


satisfaction. He stated, “Based upon the findings, it appears that gratification of higher-order

needs is most important for job satisfaction” (p. 147).

Competition among teachers. Goldhaber et al. (2011) found that some teachers feel

uncomfortable trying to better themselves to receive compensation that may not be awarded to

their peers. The idea of incentive pay is contrary to the traditionally egalitarian nature of

teaching, in which colleagues cooperate and collaborate to work toward the same goals.

According to research, “winning means diminishing the opponent's chances of getting any

rewards” (Nichols & Sullivan, 2009, para. 7). However, Royal Economic Society (2013) wrote:

The performance of teachers in this competitive environment was no different for

men and women; nor did women’s performance vary with the gender mix of the

teaching staff … Women teachers improved their performance in the competitive

environment relative to the non-competitive one. However, women were also

more pessimistic about the effectiveness of performance pay for teachers and

more realistic than men about their likelihood of winning bonuses. (para. 2)

Therefore, experimentation is needed regarding “incentives and competition in

educational systems to improve performance” (Royal Economic Society, 2013, para. 3). These

types of incentives may only be beneficial in the short-run. It has been suggested “in the longer

term, a performance pay scheme may have an effect on the composition of teaching staff.

Women may be more likely to leave the teaching profession under such schemes” (Royal

Economic Society, 2013, para. 3). As a result, overall, collaboration among teachers has

decreased due to performance-based systems.

Lack of confidence in the compensation system. An additional negative perception

was observed in teacher attitude surveys; namely, a skepticism of the longevity of the incentive


program and a feeling that such systems are used solely to extract more work from teachers.

Several researchers found that while teachers enjoyed the bonuses they received in one year, they

did not feel confident those funds would still be available to them in the next. Teachers felt that

budget cuts and incentive quotas lessened the chance of their being awarded bonuses on a regular

basis (Kelley et al., 2002; Marsden & Belfield, 2006; Yuan et al., 2013). Such lack of

confidence in the system can translate into a lack of teacher buy-in, rendering the program

ineffectual. One author even found teachers who went so far as to believe that incentive pay

schemes were just a way for districts to get more work out of teachers for less money (Marsden

& Belfield, 2006).

Reasons for becoming a teacher. Few prospective teachers cite performance-based pay

as a reason they would consider entering the teaching profession (Kyriacou & Coulthard, 2000).

There are many other reasons to become a teacher. Commonly, teachers focus on encouraging

the dreams of their students. As a result, teachers help these students make lasting impressions

on the world and humanity in general. Furthermore, teachers commonly feel a sense of purpose

through teaching. This feeling is related to the impartation of knowledge. In fact, it is found

through research that teachers have opportunities to “build a student's self-concept, help shape a

dream, provide redirection, and impart knowledge and wisdom” (Fried, 2013, p. 4). Teachers

typically find utilizing innovative solutions to assist students is very rewarding.

Changes in Teacher Behaviors

Under the traditional school pay scheme, teachers' compensation increases at largely the

same rate based on the level of education and years of experience in the field. This places all

instructors on the same ladder of progression. However, under an incentive pay scheme teachers

may earn more or less based on their performance. Because of the potential for earning


additional pay, teachers who serve under strategic compensation plans may change certain

teaching behaviors. Both positive and negative changes in teacher behaviors have been reported

following participation in performance-based pay systems. This section of the literature review

will examine how teacher behaviors can change because of participation in performance-based

pay programs. The teacher behaviors that will be examined include changes in teaching

methods, dishonest data reporting, disagreeable behaviors, decrease of participation in school

activities, and teacher absences.

Changes in teaching methods. In performance-based pay systems, many teachers may

also experience increased stress and pressure to perform. According to Wisconsin Center for

Education Research (2008), this may be because “whatever the means of assessment, the focus

of performance-based compensation is always on the teacher, not the students. This assumes

that, as teacher performance changes, student learning will increase” (p.2). Quality teaching may

be sacrificed as teachers feel greater pressure to perform. In outcome-based compensation

systems, student outcomes are at the forefront, rather than focusing solely on rewarding teacher

behaviors.

Teacher compensation systems that focus on student outcomes emphasize results,

rather than teacher behavior. A focus on student outcomes allows teachers to use

their professional expertise to decide the best way to reach particular students.

Another advantage is that outcome-based systems encourage teachers to seek

assistance in weak areas: Teachers can openly discuss their shortcomings and

work with colleagues and administrators on improving, since doing so will make

receiving incentive pay more likely. (Wisconsin Center for Education Research,

2008, p. 2)


Dishonest data reporting. Not only does an emphasis on test scores lead to an

imbalance of school time, but in some schools, it can also result in dishonest data

reporting. Podgursky and Springer (2007) found that schools may cheat or bend the rules

when it comes to test scores by incorrectly classifying students as special needs or

English language learners, disciplining low-performing students to ensure they are absent

on test days, or misreporting test data. Lavy (2007) cites evidence of cheating as an

unintended consequence of performance-based pay from Chicago public schools in 1996;

researchers found that cheating became more prevalent in low-achieving classrooms,

suggesting that the more prominent testing became among students, the greater their

desire to perform well (pp. 92-93). It is unknown whether teachers allowed such

cheating.

One of the most common reasons for teachers to alter test scores is increasing pressure to

perform. For example, Gabriel (2010) reported “educators had distributed a detailed study guide

after stealing a look at the state science test by ‘tubing’ it — squeezing a test booklet…to form

an open tube so that questions inside could be seen and used in the guide” (para. 3). It has been

found by experts that “the phenomenon is increasing as the stakes over standardized testing

ratchet higher — including, most recently, taking student progress on tests into consideration in

teachers’ performance reviews” (Gabriel, 2010, para. 4).

According to Miller (2010), “paying employees to perform better can enhance their

productivity but can also entice them to cheat” (para. 1). Although other types of businesses may

lose revenue, schools may lose funding due to altered test scores. Miller found that the closer

teachers are to earning the performance-based compensation, the more likely they may be to

cheat.


Disagreeable behaviors. There are also disagreeable teacher behaviors that fall into

residual, unintended results. Unfortunately, the literature shows a higher number of negative

behaviors resulting from the implementation of performance pay in schools. For example, both

Figlio and Kenny (2007) and Goodman and Turner (2013) found that while working under a

group incentive system, some teachers engaged in free-riding, and/or felt a lack of responsibility

for the schools' award status, and therefore, made no improvements to their teaching. Such

teachers contribute nothing to earning an incentive but may still receive one as the result of their

peers' efforts.

Further research shows a wider lack of improvement to teaching practices under such

systems. Indeed, teachers working under group incentives did not increase their use of group

activities, project or essay assignments, tutoring, or homework (Goodman & Turner, 2013;

Terpstra & Honoree, 2008; Wragg et al., 2002).

Decrease of participation in school activities and teacher absences. According to

several studies, the additional stress and pressure teachers feel while working under

performance-pay systems may result in a decrease of participation in additional school activities.

The Schools and Staffing Survey (SASS) conducted by the National Center for Education

Statistics showed teachers being less likely and less willing to serve in unpaid leadership

positions, such as department chair, while earning incentive pay (Jones, 2013). Other teachers

may go even further and neglect some of their teaching duties to focus solely on those behaviors

that are rewarded with incentives (Wragg et al., 2002).

Even without taking on extra duties or even dropping some of their previous tasks,

teachers surveyed by Kelley et al. (2002) reported higher levels of stress and worked more hours

following the implementation of a pay-for-performance scheme. Some miscellaneous and


neutral shifts in teacher behaviors were also found when performance-paying schools were

surveyed. Teacher absences, which have been found to have significant impacts on student

learning, did not decrease with the implementation of performance-based pay (Glewwe, Ilias, &

Kremer, 2003; Goodman & Turner, 2013).

Recruitment, Retention, and Compensation

Covey (2009) focused her research on recruitment, retention, and compensation for

effective teachers. The primary purpose of the study was to identify the perceptions that

Arkansas teachers hold about performance-based pay structures and teacher evaluation systems.

The Teacher Evaluation Profile (TEP), Performance Pay Survey (PPS), and Teacher Survey on

Performance Pay (TSPP) were used to gather qualitative data from participants. Teacher

selection for participation in the study was limited to public educators and the willingness of the

administrators selected to send the survey to their staff. Although Arkansas had approximately

245 public school districts with 34,000 certified teachers, only 502 certified teachers who had at

least one-year experience in the Arkansas public school system participated in the study.

Covey’s (2009) survey responses used a 5-point Likert scale measuring the perceptions

and attitudes of teachers toward the teacher evaluation process currently being used at their

school. The survey intended to capture perceptions of preference for one type of performance-

based pay over another, preference for a performance-based pay system over the traditional steps

and lanes salary schedule, and teachers’ views on performance-based pay and their school

environment.

Covey (2009) found the majority of the teachers who responded to questions related to

years of experience had been teaching for 16 or more years; however, 76 participants did not

answer the question at all, resulting in an inconclusive average. The average participant was an


elementary school teacher. After conducting a Wilcoxon test, results showed participants

preferred pay for knowledge and skills as opposed to paying for individual performance. Pay for

knowledge and expertise were also preferred over pay for team performance (preferring no

performance-based pay over team performance-based pay). Overall, teacher preference for no

performance-based pay system compared to pay for individual performance was not statistically

different. Data collected also suggests the longevity of teaching experience within the district

makes teachers uncomfortable with the new cutting-edge curriculum. They were not interested

in changing their pay structure due to security, and they did not want to be rewarded or penalized

individually. Those involved noted the importance of the aura of the school environment.

Responses were consistently positive to teacher evaluation when bonus payouts were tied to

exemplary individual performance as determined by parents, administrators, colleagues, and self.

Covey (2009) concluded that state education policy makers should investigate

performance-based pay options, taking into consideration funding sustainability and program

development, and look for ways to implement new forms of teacher pay. However, she did not

give any conclusive data other than teacher questionnaire responses. For additional studies

conducted, she suggested distinguishing between urban and rural responses, applying the same

research design in other states, and setting up a pilot district.

According to Goldhaber et al. (2011), hiring new enthusiastic teachers to maintain and

improve the teacher workforce is a crucial role of administrators. Without replacements for the

aging teacher population, schools would lack the necessary manpower to operate. Young

teachers are one of the teaching demographics most sensitive to salary inequities and as such

may be prone to higher rates of attrition. Pay-for-performance systems have in some cases been

shown to be less popular with novice teachers—particularly female novices—but studies have


found that incentive pay programs account for fewer recruitment and retention issues than

previously thought. Wragg et al. (2002) found when novice teachers encounter schools or

districts utilizing a variation of performance-based pay, some problems may arise. Under a

“threshold” award system, new teachers may be ineligible to apply for pay raises and may feel

disheartened by their comparably lower pay.

Once installed in a position where their salary is directly affected by their achievements,

new teachers may also feel short-changed (as it were) if their system is poorly designed and/or

improperly carried out (Terpstra & Honoree, 2008). In the worst-case scenarios, the failure of

their school to recognize and award their efforts can cause teachers to feel bitter and mistreated,

resulting in their leaving the school (Wragg et al., 2002).

Wells (2011) reported this phenomenon in his study regarding teacher responses to pay-

for-performance policies. According to Wells, 24% of teachers surveyed admitted to thinking

about changing schools or districts more often after the implementation of a performance-based

pay system than they did before.

Other studies have reported contrary results, however. Lavy (2007) argues that

performance-based pay plays a vital role in attracting and maintaining the most productive

teachers. He also shares that a performance-based pay model will assist in measuring (or more

attentiveness to) productivity. This system, he says, can garner support for the marketability of

teachers, creating a push for teachers to be recruited for their abilities and placing them in

schools where they would be most highly valued (p. 90-91). Creating such a market for teachers

may result in positive outcomes for all parties. These markets have the potential to drive morale

while allowing schools to identify their needs in the job market. They also allow schools to seek


novice teachers qualified to match the ambition of their schools early on, creating a system that

would initiate teachers to excel in their profession.

When teachers seek the rewards of performance-based pay early on in their careers, it

allows districts to deter attrition and appeal in the forefront of the job market for teachers.

Lavy’s (2007) study shows that “if teachers are able to improve their classroom performance,

linking compensation to performance will provide all teachers incentives to improve through

professional development, which will, therefore, induce still further productivity gains” (p. 91).

Professional development opportunities can also add to the market value of teaching jobs, and

paired with performance-based pay, they offer another positive mark for attraction and retention

of teachers.

Goodman and Turner (2013) found that group-based incentive programs did not result in

higher teacher turnover rates. Jones (2013) reported a significant decrease in teachers' agreement

with the statement “I definitely plan to leave as soon as I can” following the implementation of a

performance incentive system (p. 159). To ensure all teachers feel a sentiment of remaining in

their current position, novice and veteran alike, schools can offer higher starting wages. This

practice leads to a higher likelihood of attracting better quality applicants (Wragg et al., 2002).

Once hired, novice teachers may feel overwhelmed and fall short of administrator expectations.

Under a performance-based system, these struggling teachers can get the professional

development and support they need to be successful, which decreases the likelihood of them

leaving their position (Caillier, 2010).

Teacher perception of the benefits of merit pay, especially as it concerns recruitment and

retention, is mixed. Much depends on the particular system of reward and the manner in which it

is carried out. Novice teachers are especially sensitive to issues of equity and may be


disenchanted with programs that do not benefit them from the beginning. However, in a

comparable number of studies teachers reported positive views of performance-based pay. In

many cases, incentive systems were not cause for attrition, as demonstrated by Jones (2013),

who found that of the teachers who left their positions during the course of his study, only 6%

listed performance-based pay as a major reason for their decision.

Chapter Summary

This review of research discussed past studies of strategic compensation programs.

While there is growing interest in performance-based pay programs in education, Goldhaber et

al. (2011) recognized that there has not been significantly researched evidenced of the effects of

differentiated monetary incentives for teachers. Performance-based pay offers teachers the

opportunity not only to earn greater income, but also to be viewed more professionally in

society. Lavy (2007) noted that when teacher pay was based solely on years of experience and

level of education, there was criticism from stakeholders because there were no incentives for

performance or doing well. Differentiation of pay allows those teachers who perform at high

levels to be rewarded based on outcomes.

Although performance-based pay offers benefits, there were concerns about

implementation based on past research. Those concerns stem from determining how

performance is measured as well as some unintended consequences of past implementation.

Teachers perceive strategic compensation through many lenses. Perceptions vary widely and

depend on many factors. In districts that have implemented performance pay, teachers’

classroom behaviors have changed. Not all of the changes in teacher behaviors were viewed as

positive. Finally, hiring and retention practices of school districts using performance-based pay


were examined. Because performance-based pay has not been widely implemented, it is difficult

to assess the affects it has had on recruitment and retention of quality educators.


Methodology

Purpose of the Study

The purpose of this study was to determine the teachers’ perceptions of the strategic

compensation model and its influence on teachers in the Rural Southeast School District. More

specifically, the study: 1) investigated the perceptions of faculty members concerning the

strategic compensation plan, 2) identified perceived changes in teacher behaviors as a result of

the strategic compensation plan, 3) evaluated changes in teachers’ TEAM level of effectiveness

scores over three years, and 4) examined whether the teachers’ perceptions of the strategic

compensation plan impacted decisions to continue employment in the district.

Research Questions

The researchers sought to answer the following questions through this mixed methods

research study:

1) What are the teachers’ perceptions on strategic compensation in the Rural Southeast

School District?



3) How has strategic compensation affected teacher recruitment and/or retention in the

Rural Southeast School District according to teachers’ perceptions?

Research Design

Research phases. This was a mixed methods qualitative-dominant study with a focus on

perceptions of teachers within the Rural Southeast School District. It was conducted in four

sequential phases:


Phase 1 – A questionnaire was used to collect information on the perceptions of the

current and former teachers of the district (Appendix B). The questions focused on their

experiences within the district and how their experiences with the strategic compensation

plan related to their perceived and actual effectiveness.

Phase 2 – Focus group discussions were conducted with volunteer strategic

compensation plan participants and non-participants. The researchers assigned a number

to every teacher and then used a number generator to randomly select a mix of current

elementary, middle, and high school level teachers to be a part of the focus group.

Phase 3 – Interviews were conducted at a pre-set time with volunteer teachers willing to

give greater insight into their perceptions of the strategic compensation model. The

researchers assigned a number to every participant and non-participant teacher volunteer

and then used a number generator to select three teachers from each of the three schools.

This phase was used as an opportunity to gain further insight into the effectiveness of the

strategic compensation plan for the Rural Southeast School District.

Phase 4 – Quantitative data related to teachers’ TEAM scores was obtained from the

district. The researchers used this data to perform independent t-tests in order to

determine if significant differences existed in the TEAM scores of teachers who

participated in the strategic compensation plan versus those who did not participate.

Qualitative design. To gather the data needed to address the research questions,

researchers of this study took a phenomenological approach, attempting to explain the district

strategic compensation plan’s effectiveness through the eyes of the teacher. In his explanation of

phenomenology, Groenewald (2004) stated:

To arrive at certainty, anything outside immediate experience must be ignored,


and in this way the external world is reduced to the contents of personal

consciousness. Realities are thus treated as pure ‘phenomena’ and the only

absolute data from where to begin. (p. 4)

In relation to phenomenological research, Groenewald (2004) noted “the aim of the

researcher is to describe as accurately as possible the phenomenon, refraining from any pre-given

framework, but remaining true to the facts” (p. 5). Welman and Kruger (as cited in Groenewald,

2004) further noted “phenomenologists are concerned with understanding social and

psychological phenomena from the perspectives of people involved” (p. 5). The use of the

surveys, individual interviews, and focus group interviews served as the primary basis for

collecting qualitative data.

Quantitative design. The researchers analyzed the quantitative data using independent t-

tests. A t-test is used when comparing two independent samples or populations.

In relation to this study, the two independent populations were teachers who participated

in the strategic compensation plan and teachers who did not participate in the strategic

compensation plan. The researchers used JMP Pro 11, a statistical analysis computer software,

to perform the independent t-tests and obtain the related p-values that would determine if there

were significant differences in the means of: 1) the change in TEAM level of effectiveness

scores of teachers who participated in the strategic compensation plan, and 2) the TEAM level of

effectiveness level of effectiveness scores of teachers who did not participate in the strategic

compensation plan.

Populations

Target teacher population. The population invited to participate in this study consisted

of 92 current and 17 former teachers of the Rural Southeast School District, all of whom were


employed during the 2013-2014 school year. The total teacher population was 109. The

teachers were identified through the selected district’s human resources department. The

demographic data were utilized for indicating the participants’ gender, number of years teaching

experience, licensure status, grade level taught, tenure standing, and employment compensation

plan.

Everyone included in this study was a current or former employee of the district. These

participants had experience with the strategic compensation model used in the district. Because

of their experience, they were better able to provide information about their perceptions of

changes in their classroom behaviors as a result of the strategic compensation model. They were

also able to explain the impact that the strategic compensation model had on whether they chose

to remain employed by the district. The teachers’ perceptions were useful in making

generalizations that could be applied to other public school districts in Tennessee as well as other

locations.

Demographics of Teacher Participants

Gender. Fifty-nine of the 92 current teachers participated in this research study. As

shown in Table 8, 42 of these 59 teacher participants were female and 17 were male. The

researchers feel that this sample of teachers provided a reasonable representation of the faculty

population based on percentage.

Table 8

Gender of Participants

Gender Frequency Percentage

Female 42 71.2

Male 17 28.8

Total 59 100.0


Experience. The teachers participating in the study represented a broad range of

experience in education, with representation from first-year teachers through career veterans.

The ranges of teaching experience were grouped in three to four-year intervals (0-3, 4-7, 8-10,

11-15, 16-20, 20 or more). The four-year intervals made six groupings of teachers with a

balanced distribution. The first two groups consisted of nine new or apprentice teachers and 12

tenured young career teachers, respectively. The second two groups consisted of 10 teachers in

their eighth to 10th year and 13 in their 11th to 15th year, respectively. The last two groups

made up the veteran teachers consisting of eight in the 16th to 20th-year group and seven with

more than 20 years of experience, respectively. Table 9 provides a summary of the years-of-

experience represented in the study.

Table 9

Years of Experience of Participants

Experience Frequency Percentage

0 – 3 years 9 15.3

4 – 7 years 12 20.3

8 – 10 years 10 16.9

11 – 15 years 13 22.0

16 – 20 years 8 13.6

20 or more years 7 11.9

Total 59 100.0

Licensure. There are two basic license types for Tennessee teachers, apprentice (initial)

and professional (advanced). Apprentice teachers are those who have just completed their

teacher education training and are in their first three years of teaching in Tennessee. The

certification is a fully vested licensure and is valid for five years as a traditional clear and

renewable certificate. To gain a professional license, teachers must complete five steps. First,


they must be recommended by the employing school district. Second, a TEAM trained

administrator must evaluate them. Third, they must hold a valid apprentice license. Fourth, they

must have taught for a minimum of 25 months. Fifth, their current assignment must match their

apprentice level license (TNDE, 2011d).

Twelve of the 59 teachers participating in the study were considered apprentice-licensure.

The remaining 47 teachers were already classified as Professional Educators, meaning they had

already completed their initial years of teaching and evaluation. The primary difference between

an apprentice and professional educator is years of total classroom experience. Table 10 showed

the breakdown of participating faculty based on their status as apprentice or professional-

licensure educators.

Table 10

Licensure Level of Participants

Licensure Frequency Percentage

Apprentice 12 20.3

Professional 47 79.7

Total 59 100.0

Grade level taught. Teacher participants represented all grade levels from kindergarten

through twelfth grade. Twenty-one teachers taught early elementary education (PK-4), 18

teachers taught intermediate grades (5-8), and 20 teachers taught secondary grades (9-12). Table

11 provided the breakdown of teachers at each grade level.


Table 11

Grade Level Taught by Participants

Grade Level Frequency Percentage

K – 4 21 35.6

5 – 8 18 30.5

9 – 12 20 33.9

Total 59 100.0

Tenure status. In 2011, the state of Tennessee enacted a new tenure law changing the

tenure term from a three-year period to a five-year period, in which teachers are probationary

employees. Teachers may gain tenure after five consecutive academic years of employment,

during which they are on probation. For tenure to apply, a teacher must score a 4 or 5 on his/ her

district’s summative evaluation and be recommended by the district. This system measures

teachers in their planning, teaching, classroom environment and student achievement. The Rural

Southeast School District utilized the TEAM summative evaluation model when granting teacher

tenure. The new tenure law also added that tenured teachers could lose that status if they score

Level 1 or Level 2, deemed below expectations, for two consecutive years (TNDE, 2011d;

Wesson, 2012). Table 12 highlighted tenured and non-tenured teachers who participated in this

study. Of the teachers who elected participation in this study, two-thirds (n=39) held

classifications as tenured teachers and the remaining one-third (n=20) were non-tenured. Tenure

provides teachers with additional protection within a district, providing continued employment to

those whole hold it, so long as they continue to act appropriately within their scope of duties

(Cheshier, 2014).


Table 12

Tenure Status of Participants

Tenure Frequency Percentage

Non – Tenured 20 33.9

Tenured 39 66.1

Total 59 100.0

Evaluation. In Tennessee, teachers are evaluated on student achievement, planning,

teaching, and their classroom environment. Under TEAM, the administration must evaluate each

teacher for at least one hour during the year. Evaluation scores consist of numbers from 1 to 5,

with 1 being the lowest and 5 being the highest score. The grouped numbers (1-2, 3, and 4-5)

represent three patterns for communicating the teacher’s appraisal. Teachers scoring a 1 or 2 do

not meet expectations for those areas. Teachers scoring a 3 are meeting expectations. Teachers

that score 4 or 5 are above expectations in any given area (TNDE, 2011c). Of the teachers

participating in the study, half were not considered “leveled” teachers, meaning their evaluations

were Level 3 or below. Of the remaining half, 16 were Level 4 and 14 were Level 5,

representing teachers who are going above and beyond expectations in their classrooms in one or

more of those four areas with consistency. Table 13 provided the breakdown of the number of

teachers who did not meet or just met expectations and those exceeding expectations.

Table 13

Evaluation Level Scores of Participants

TEAM Score Frequency Percentage

Level 3 or Below 29 49.2

Level 4 16 27.1

Level 5 14 23.7

Total 59 100.0


Strategic compensation participation. Participants in this study either participated or

did not participate in the strategic compensation plan. Those teachers who were employed prior

to the implementation of the program were given the option either to participate or not to

participate. Those teachers hired after the plan’s implementation was not given a choice; they

were required to participate in the strategic compensation plan.

Fourteen of the 59 teacher participants indicated that they were not participating in the

strategic compensation plan. Forty-four of the 59 teacher participants were participating in the

program, and one failed to respond to the question related to participating in the strategic

compensation plan. Overall, three-fourths of teachers surveyed (74.6%) either had elected to

participate or were hired into the strategic compensation plan. Table 14 demonstrates the

breakdown of involvement in the strategic compensation plan.

Table 14

Strategic Compensation Participation of Participants

Participation Frequency Percentage

Non – participating 14 23.7

Participating 44 74.6

Did not answer 1 1.7

Total 59 100.0

Interview and Focus Group Participants

There were a total of 13 different employees interviewed. Twelve were teachers, and one

was an administrator. Four participated in the focus group only, nine participated in individual

interviews, and three of the nine participated in both. Overall, interviews included: four

elementary teachers, four middle school teachers, four high school teachers, and one

administrator. The participants’ teaching experience ranged from one year to 22 years.


Description of Research Instrumentation

Equity theory. During the data analysis process, principles from equity theory were

used to organize and evaluate the qualitative data related to questionnaire responses, focus group

responses, and interview feedback of both current and former teachers. The theory was utilized

to understand the motivational benefits of a performance-based pay system in the elementary,

middle, and high schools. Determining teachers' perceptions of the strategic compensation plan,

specifically during the data interpretation phase, and the results of the data are paramount for

understanding the context of the participants’ satisfaction. Equity theory (Huseman et al., 1987)

proposed that, as a result of the distress of over-reward or under-reward, inequitably rewarded

individuals should experience lower levels of job satisfaction than equitably-rewarded

individuals (p. 228).

Motivation theory. Frederick Herzberg (1968) noted human beings are goal-oriented

and impacted by motivation. There were two distinct fields within the theory; process

motivational theories, such as Equity Theory mentioned above, which considered how people are

motivated, and content motivational theories, such as Incentive Theory, that focused on which

things impact motivation. A combination of both process and content motivational theory was

utilized to best examine perceptions of a strategic teaching plan in the Rural Southeast School

District. The desire to understand what events or incentives impact human motivation or goals

are an important part of understanding and impacting productivity in any setting. Since

individuals who are motivated tend to be more engaged than others, it is the task of the

motivational theorist to determine what and how intrinsic and extrinsic factors impact motivation

and use that information to improve practice.


Questionnaire. The research instrument of choice used within this study was a

questionnaire made up of 50 questions (Appendix B). The questionnaire was used as the main

data-gathering instrument for this study to determine the perceptions associated with the strategic

compensation model. Upon receiving permission to conduct this research, teachers were

contacted to participate in a questionnaire that assessed perceptions related to the strategic

compensation plan. The researchers informed the consenting teachers of their rights and the

purpose of the research project. The questionnaire was designed to obtain: 1) teaching

demographics including years of experience, class level, tenure, grade level, and status of

certification; 2) thoughts on the perception of the strategic compensation plan’s positive and

negative aspects; 3) perceptions and attitudes related to changes in workload; and 4) other

insights and opinions as assessed by the questionnaire’s open-ended questions.

Description of sections. The questionnaire is divided into three sections designed to

gather as much information as possible about the respondents and their perceptions of the

strategic compensation plan. Interviews were conducted and the interview questions

(Appendices C and D) were developed based on the original questionnaire. The interview

questions were designed to facilitate broader response from the participants based on the

theoretical frameworks of motivational theory and equity theory. The first section of the survey

was used to gather the demographic characteristics of the respondents who were participating in

the study.

The second section of the survey assessed teacher perceptions regarding teacher

behaviors, recruitment, and retention. Within this section, teachers were given a Likert scale

response for each statement, and participants either: indicated their level of agreement or

disagreement with the statement, or rated the degree of implementation associated with each


statement. These statements assisted in identifying the perceived advantages and disadvantages

of their affiliation or non-affiliation with the strategic compensation model.

The third section of the survey included six open-ended questions. These questions were

designed to allow the researcher to gain a deeper understanding of teacher perceptions, as well as

to allow participants the opportunity to volunteer any additional information that they deemed

important. The questions and Likert scale statements from all three sections were designed to

reveal: A) teachers’ opinions and suggestions regarding the implementation of the strategic

compensation plan; B) the teacher behaviors associated with the strategic compensation plan;

and C) the aspects of the strategic compensation plan that are not favored by teachers in general.

The questions from the survey, the Likert scale statements, as well as the six open-ended

questions, were entered into REDCap (Harris et al., 2009).

Linking the questionnaire to the research questions. Table 15 shows the correlation

of the questionnaire (Appendix B) to Research Question 1.

Table 15

Correlation of the Questionnaire and Research Question 1

Research Question 1 Correlated Likert Statements

What are the teachers’ perceptions on strategic

compensation in the Rural Southeast School

District?

Q1, Q2, Q3, Q4, Q5, Q6, Q7, Q8, Q9,

Q10, Q11, Q15, Q16, Q17, Q18, Q19,

Q20, Q21, Q22, Q23, Q24, Q25, Q35,

Q36, Q37, Q38, Q39, Q41

Table 16 shows the correlation of the questionnaire (Appendix B) to Research Question 2.


Table 16



What teacher behaviors have been affected as a

result of the strategic compensation plan in the

Rural Southeast School District according to

teachers’ perceptions?

Q12, Q13, Q14, Q26, Q27, Q28, Q29,

Q30, Q31, Q32, Q33, Q34

Q36, Q40

Table 17 shows the correlation of the questionnaire (Appendix B) to Research Question 3.

Table 17



How has strategic compensation impacted teacher

recruitment and/or retention in the Rural Southeast

School District according to teachers’ perceptions?

Q1, Q2, Q3, Q4, Q5, Q6, Q7, Q8, Q9,

Q10, Q11, Q15, Q16, Q17, Q18, Q20,

Q21, Q22, Q23, Q25, Q37, Q38

Pilot study. Following IRB approval, a pilot study was conducted on a sample of

teachers in a school district with demographics and academic characteristics similar to in the

Rural Southeast School District. The district’s superintendent approved the pilot study before

pilot study participants received questionnaires from the research team. The pilot school

district’s individual school principals selected teacher participants within their school for the

study. The pilot study was conducted utilizing the same research design that was planned for the

formal study. In addition, a scenario (Appendix H) was used to explain the background story of

TCS characteristics and the issues under study without divulging the actual location, employees,

and students.

The purpose of the pilot study was to determine if participants had problems with

interpreting questions, the wording in the questionnaire, or misunderstandings of questions and


statements often found in online survey items. Additionally, the researchers sought pilot study

participants’ feedback regarding their knowledge and understanding of strategic compensation

plans. The feedback and comments about the online survey design and strategic compensation

were collected, and the pilot study was completed within one week. There were no problems

associated with interpretation, wording, or misunderstanding of questions and/or statements. The

pilot study participants showed sufficient knowledge and understanding to express meaningful

opinions about strategic compensation plans.

Variables in the Study

Qualitative variables. For the purpose of this study, the qualitative dependent variables

are the perceptions of participating and non-participating district faculty members. The

qualitative independent variables included each faculty member’s professional rank, gender, age,

educational level, traditional payment plan, and non-traditional payment plan. In determining

the answers to the research questions, the researchers took a phenomenological approach,

attempting to explain the effectiveness of the Rural Southeast School District’s strategic

compensation plan through the eyes of the teacher.

Quantitative variables. The following quantitative variables served as nominal

variables within this study: TID, ST, and PP. Variable TID identified the code name associated

with each teacher participant. Variable ST identified whether a teacher participant worked within

an elementary school (ES), middle school (MS), or high school (HS) setting. Variable PP

identified if a teacher participant participated in the district’s strategic compensation plan.

The following quantitative variables served as continuous variables within this study:

TS12, TS13, TS14, CS1, CS2, and CS3. Variable TS12 represented teacher participants’ TEAM

level of effectiveness scores from the 2011-2012 academic year. Variable TS13 represented


teacher participants’ TEAM level of effectiveness scores from the 2012-2013 academic year.

Variable TS14 represented teacher participants’ TEAM level of effectiveness scores from the

2013-2014 academic year. Variable CS1 represented the change in each teacher participant’s

TEAM level of effectiveness score from 2011-2012 to 2012-2013. Variable CS2 represented the

change in each teacher participant’s TEAM level of effectiveness score from 2012-2013 to 2013-

2014. Variable CS3 represented the change in each teacher participant’s TEAM level of

effectiveness score from 2011-2012 to 2013-2014.

Procedures for Data Collection

The researchers followed these procedures for data collection:

1. Prior to data collection, the researchers submitted the research proposal to the

Institutional Review Board (IRB) at Lipscomb University. Data collection did not begin

until IRB approval was received.

2. Following approval from the Lipscomb University IRB, the teachers at the participating

schools received an email invitation from the research team provided by the school

district requesting that they participate in the study and complete a questionnaire. The

email included a brief explanation of the purpose of the questionnaire, data utilized, and

how the results of the study could improve future endeavors for strategic compensation

plans. The consent statement was placed at the very beginning of the questionnaire.

Teachers were informed that participation in the survey was completely voluntary and

responses were completely anonymous. To gain maximum participation, the

questionnaire was delivered during times that were less busy according to the school

calendar. The participants were given two weeks to complete the questionnaire. Within

one week after the first notification for participation was sent, all participants received a


follow-up email as a reminder for those who may not have completed the questionnaire.

The questionnaire was sent via e-mail to all current employees of the Rural Southeast

School District. The employees that had left the district but were employed during the

2012-13 or 2013-14 school years received their questionnaire links and explanation of the

study through postal mail. As the participants responded to the questionnaire, the

research team collected data for analysis.

3. The research team conducted a focus group in which open-ended questions derived from

the questionnaire were designed to prompt participants to share their stories. The

researchers specifically sought data in regards to teacher motivation, the compensation

plans’ strengths and weaknesses, defined areas of the compensation structure, and

projected future outcomes. The designed open- and closed-ended questions were used

for participants to share their perceptions of the strategic compensation model.

Participants for the interviews and focus groups were gathered by sending an email to all

previous questionnaire recipients asking for volunteers. The interviews and focus groups

were recorded using various electronic recording devices.

4. Following facilitation of interviews and focus groups, the researchers transcribed all of

the resulting qualitative data. Furthermore, all teacher interviews and focus groups were

transcribed using Microsoft Word.

5. The researchers obtained de-identified data from the Rural Southeast School District.

The school district provided the researchers with the following information related to 95

of the district’s teachers: the type of school where the teacher worked (elementary,

middle, or high); whether or not the teacher participated in the strategic compensation


plan; and TEAM level of effectiveness scores for the 2011-2012, 2012-2013, and 2013-

2014 academic years.

Data Analysis

The researchers followed these procedures for data analysis:

1. Qualitative data derived from the questionnaire were coded and categorized to construct

themes. This initial analysis was done four times, and the results were shared with the

research team. This initial round of coding and categorizing was further analyzed and

discussed by the research team, which led to the first identified set of potential themes.

Researchers then looked for trends among perceived perceptions as a result of the

implementation of a strategic compensation model within the Rural Southeast School

District. Finally, the trends were coded by the perceptions of strengths and weaknesses

of the strategic compensation model.

2. The researchers then transcribed and coded focus group and interview responses for

similar themes.

3. Researchers used responses to explain and elaborate on the perceptions of the strategic

compensation model. Using a grounded theory framework, which entails a constant

comparison approach, the researchers coded and categorized the transcriptions. Through

using constant comparison, theory is developed, allowing for connections in relation to

the theories attempted to be explained. Glaser and Strauss (1967) showed that the

constant comparison procedure involves: 1) the identification of the phenomenon of

interest; 2) the identification of concepts and features of the phenomenon of interest; 3)

making decisions based on the initial data and based on the researcher’s understanding of

the data and theory emergence; 4) engaging in theoretical sampling, allowing for


purposeful and relevant sampling decisions; and 5) determining the rationale for selecting

comparison groups that will foster the development of emergent categories or themes (p.

28-52).

4. The categorized data was then analyzed to determine trends, patterns, and embedded

themes.

5. After trends, patterns, and embedded themes were identified; the data was further

combined and refined into emergent themes.

6. The researchers analyzed the quantitative data using paired t-tests. The researchers

performed independent t-tests using JMP Pro 11 in order to determine if there were

significant differences in the means of: 1) the change in TEAM level of effectiveness

scores of teachers who participated in the strategic compensation plan and 2) the change

in TEAM level of effectiveness scores of teachers who did not participate in the strategic

compensation plan.

Disposition of Data

Unless they contacted the researchers requesting to be informed of the study’s results, the

participants remained anonymous throughout the data collection and data analysis processes.

Those who contacted the researchers and asked to be informed of the study’s results received an

abstract and information about accessing the study. Every effort was made by the researchers to

preserve confidentiality. Data were secured in a password-protected site on a secure web-based

server (Dropbox and REDCap). Additionally, individual participant confidentiality was

accomplished through a series of steps as outlined below:

1. Assigned code numbers for participants were used on all researcher notes and documents.


2. Only the researchers and the members of the researchers’ committee reviewed the

collected data.

3. Information from this research was used solely for the purpose of this study and any

publications that may result from this study.

4. Each participant was provided the opportunity to obtain a transcribed copy of his or her

interview.

5. Participants indicated to the researchers if a copy of the interview was desired.

6. Materials were destroyed one year after the research is concluded.


Findings and Analysis of Data

Organizational Summary

This chapter is dedicated to describing the findings of the three research questions and

related discoveries. Several themes emerged throughout the responses to the questionnaires and

during the interviews. Unless specified, the reported themes were present in the data collected

from all three contexts. Because the responses were derived from the perceptions of participants,

the themes were organized first by their relationship and relevance to each research question and

then categorized by common themes, which had emerged through the data analysis process.

Findings Related to RQ1

Questionnaire, interview, and focus group findings related to RQ1. The

questionnaire first assessed overarching teachers’ perceptions in relation to the Rural Southeast

School District’s strategic compensation plan. The teachers provided various comments and

responses that described the perceived effect of the strategic compensation plan on the school

district as a whole. Those comments and responses were coded and refined into the following

subheadings: academics and achievement, positive perceptions of the district, student

achievement as a measure of effectiveness, student grouping and grade level, validity of grade-

level testing, student capacity for learning, perceptions of strategic compensation, teachers as

ancillary participants, teacher perceptions about salaries, collaboration, and intrinsic motivation.

Table 18 displays the percentage of the participants’ positive perception, negative perception,

neutral response, or no response for each theme revealed in Research Question 1.


Table 18

Percentages of respondents’ positive and negative perceptions by theme in RQ1

Research Question

Theme (n) % Pos. (n) % Neut. (n) % Neg. (n) % No Response

RQ1

Academics and Achievement

94% 1.8% 4.2% 0%

Positive perceptions of the district

84.5% 9.8% 5.7% 0%

Student achievement as a measure of effectiveness

84% 2% 14% 0%

Student grouping and grade level

6.9% 0% 0% 93.1%

Validity of grade level testing

0% 0% 22.4% 77.6%

Student capacity for learning

28% 0% 8.2% 63.8%

Perceptions of strategic compensation

0% 0% 63.7% 36.3%

Teachers as ancillary participants

0% 0% 23% 77%

Teacher perceptions about salaries

0% 0% 82% 18%

Collaboration 47.8% 0% 27.6% 24.6%

Intrinsic motivation 89% 0% 0% 11%

Notes. N=59.

Academics and achievement. Teacher interviews revealed that teachers felt that

accountability for student learning was important. Ninety-four percent of the questionnaire

participants agreed that student achievement is an important measure of effectiveness in

teaching; however, there were different perceptions about the means for measuring student


performance and the weight that student achievement holds in relation to teacher evaluations for

the strategic compensation program. Teacher comments included the perception that students

achieve on different levels, extrinsic factors impact achievement (home life, peers, test anxiety),

and test scores do not always represent student performance. For example, Teacher Respondent

12 stated,

I believe that growth in students is the main thing [we] should be focused on. Not every

student is going to make proficient or advanced on a test, but every student can grow with

the right guidance from the teacher.

Positive perceptions of the district. As revealed by the questionnaire results, 84.5% of

the teachers who participated have positive perceptions of the school district. Interviews and

focus group interviews further supported the perceptions of the school, students, teachers, and

system in general as being positive. Positive perceptions of teachers regarding the strategic

compensation plan reflected a passion for teaching, recognition of positive traits in teachers, and

expectations of teacher effectiveness. The district is positively perceived for being focused on

academics and achievement for students and effectiveness in their teachers. Teacher Respondent

29 stated: “Our school is a high performing school in academics, and the strategic compensation

plan has been a reward for the teachers’ hard work.” Teachers perceived that accountability for

student learning was important and they perceived their jobs as being about the students.

Prevalent positive descriptors that were used by teacher respondents included words such as

comfort, support, encouragement, collaboration, and success. Reflection on progress, use of

feedback, formative assessment for continuous improvement, and working to build life skills,

such as confidence and competence in their students were prevalent positive comments

expressed by various teacher respondents.


Student achievement as a measure of effectiveness. Eighty-four percent of participants

agreed that emphasis on student achievement within the compensation plan has had influence on

teacher effectiveness. Additionally, 20.7% of teacher respondents were in support of

achievement as a measuring factor in the plan. However, 5.2% of teachers wanted to give input

regarding the measures chosen for the plan. During focus group interviews teachers noted that

they believe multiple years are needed versus yearly measurement of achievement related to the

compensation plan. Teacher Respondent 21 noted:

It can be discouraging for a teacher who works hard all year and does not get

recognized for it strictly because the students do not score well or it is difficult to

show growth in their subject area. There needs to be a multiple year average.

Additional comments supporting this theme came from teacher interviews where Respondent 5

stated, “teachers should be held to a standard that all students have the capability to gain in their

learning year.”

Forty-seven percent of teachers noted that the strategic compensation plan was unclear

and inconsistent in how achievements were to be measured and in how value was to be added.

Additionally, three focus group respondents agreed that many teachers in their schools felt they

didn't really understand how the strategic compensation plan worked or how they would be

assessed. Respondent 7 stated, “I am participating because I have to. However, I don’t really

know how any of it works. All I know is it’s about my student’s scores.”

Student grouping and grade level. In regards to student achievement, 6.9% of teacher

respondents commented on student grouping and grade level. During interviews several teachers

noted that gains could be a problem in lower-performing as well as higher-performing students.

Low performers often maintain the same test percentiles from year to year, and this is not


indicative of growth or gain. High performing students may max out the test, and therefore be

unable to show growth. Perhaps the greatest point of contention for participants was the use of

yearly test scores as the measure of student growth. Sixty-seven percent of the respondents

agreed that while student achievement is important, more data are needed to measure students’

gains and growth, rather than only using the state assessment. Eighty-three percent of teachers

expressed little confidence that a single test could measure student performance and

achievement. Specifically, 15.5% of respondents believed that multiple yearly achievement

scores should be used rather than just one year at a time for the strategic compensation plan.

Teacher comments indicated that defining a year of learning by a single score was not

representative of student learning or ability, especially in light of beliefs that bias is inherent to

standardized testing.

Validity of grade-level testing. Some 22.4% of respondents perceived that not all grade-

level testing was reliable in teacher evaluations. Specifically, 10.4% of teachers perceived tests

as subjective, such as those given in language arts classes. Teacher Respondent 27 stated:

Another reason I don't think it's [the evaluation system is] fair is because the ELA

standards and test are mostly subjective for the grade that I teach, plus there are

not any resources to teach those subjective skills with. Teachers should not be

deemed 'effective or not effective' based on scores on a test that is subjective and

based on growth from previous year where the test is mostly concrete.

Lower grade levels, specifically K-2, were another area that teachers identified as

problematic due to lack of state testing in these grades. Teacher Respondent 14 noted, “Grades

3-5 take tests geared to the standards they teach. Grades K-2 does not. As a new teacher, not

understanding the situation, or having a concern for scope and sequence, it might not sound very


promising.” Even with common assessments, the presence of factors outside of teachers’ control

played a prominent part in the discussion. Teachers revealed through interviews that some

students just do not test well. Additionally, the focus group agreed that students may have

learned and shown considerable growth over the course of the school year, but for a wide variety

of reasons outside of teachers’ control, these students may not perform well on the state

standardized test.

Student capacity for learning. Twenty-eight percent of teachers also noted that student

capacity was another key factor in teacher behavior. Teacher Interview Respondent 5 stated,

“Teachers should be held to a standard that all students have the capability to gain in their

learning year.” However, 8.2% of the respondents stated that some students come already at

capacity. Specifically, Respondent 8 during interviews stated, “some students hit their max

learning ability in or before high school.”

Although 8.6% teachers expressed the belief that all students are capable of learning,

some teachers added students could reach learning capacity during or before high school.

Teacher Interview Respondent 2; shared this comment:

By fifth grade and especially middle school, I believe that most kids have reached

their full potential in learning. I am not saying they won't learn any more. What I

mean is that they have reached their maximum potential whether it's advanced,

proficient, or basic. There might be a few exceptions, but for the most part, I feel

that the students have peaked, and for the next year's teacher to follow that and

get scores is impossible.

There was a teacher belief expressed during focus group interview that not all students

are capable of learning on the same levels. Some 28.3% of respondents felt that despite their


ability to teach, student growth capacity was a factor. Only 16.6% of teachers believed that

differences in student growth and academic gains past a certain threshold should be a factor in

determining pay as a part of teacher compensation plans.

Negative perceptions of strategic compensation. Perhaps the most interesting theme in

the analysis of questionnaire responses was the strength of negative perception by many teachers

in relation to the strategic compensation plan. The questionnaire revealed that 63.7% of the

participants’ communicated negative expressions related to the strategic compensation plan.

Prevalent negative descriptors that were used by teacher respondents included words such as

unfair, fear, anger, stress, distrust, and pressure. Seventy-nine percent of teachers also expressed

concern that there were not equal opportunities for all teachers to earn bonuses. During

interviews, over half of the respondents felt that another person’s performance should not impact

their value. In addition, 44.7% of teacher responses indicated that they felt the strategic

compensation plan increased their stress level while increasing their workload. As many as

49.7% of the teachers explained that their jobs were busier and more stressful than in the past.

Focus group teachers noted they are expected to grind out more work for less pay and meet

increasingly higher expectations each year. The following is one of the most critical teacher

testimonies from interviews in relation to the negative impact of the strategic compensation plan.

Interview Respondent 4 stated:

I know of several more teachers that are already seeking positions in other

districts at this time. You will notice in your findings that our educators are very

young, and we are seeing a huge overturn of the young [teachers] leaving after 1-

3 years to go elsewhere and make more money.


Teachers as ancillary participants. An additional concern that 23% of teachers reported

was the notion that teachers who are not tied to a particular student group, such as inclusion

teachers and instructional coaches, have no ability to be measured using standardized test data.

These teachers are considered ancillary participants in student learning and, therefore, they do

not have scores that represent their impact on student achievement. Questionnaire participants

indicated that classes with multiple teachers across the same subject area should not be a basis

for evaluating individual teachers. This included teachers such as instructional coaches, special

education teachers, and those tasked with student interventions for students in fluctuating groups.

Teacher perceptions about salaries. Eighty-two percent of teacher respondents

expressed concern about the fairness and low starting salaries of the compensation system.

Fifty-seven percent further noted that a primary negative factor within the Rural Southeast

School District’s strategic compensation plan was the fact that salaries within the school district

were lower than the baseline salaries in surrounding county-school districts. With the exception

of a negative focus on salary as being lower than the salary baselines in surrounding counties,

77% of the participants said the plan was not clear and understandable.

During focus group questioning Teacher Respondent 5 summarized what several other

teachers reflected by stating: “...many educators leave the district due to the lack of competitive

salaries with neighboring counties. The extra compensation still doesn't make up for the lack of

benefits and salary increases of surrounding counties.”

Teacher Respondent 8 noted in the interview, “I think base pay hurts—not the strategic

compensation plan.” Teacher Interview Respondent 9 relayed the following belief: “I do not feel

my pay should be based on how another individual performs.” Some other comments from four

various Teacher Interview Respondents included: “The baseline starting pay is too low (Teacher


Respondent 11);” “The ability to receive a baseline pay raise is too difficult to obtain (Teacher

Respondent 2);” and “Our pay scale [is]...lower than any county around us (Teacher

Respondent1).”

Nearly 76% of teacher participants expressed positive attitudes about the inclusion of

incentives as a reward for obtaining academic gains with students. Focus group respondents

noted they would like to receive incentives in the form of salary increases and monetary bonuses.

In addition, 17.2% further emphasized that they would like to see a progressive pay scale with a

focus on increasing their pay from year to year. There was a high emphasis on support and

recognition of teachers. In addition to compensatory incentives, teachers want to be

acknowledged for the great things they were doing for students. The teacher respondents further

commented on wanting to receive recognition for excellence in teaching. Teacher Respondent

31 shared this commentary in relation to program incentives:

The incentive to receive a bonus is a major factor for me staying in this system;

if the bonus were to be taken away, I would be forced to entertain the idea of

teaching at a different school. The amount of work/pressure expected of me and

other teachers is too much to be compensated for so little.

Teacher Respondent 49 added, “Teachers who have ‘growth’ within their classrooms need to be

compensated for their work. Students do not grow in terms of TVASS overnight; it is the hard

work of the teachers and their students that does this.”

In addition to monetary bonuses and salary increases, teachers also focused highly on

support for ongoing learning for both teachers and students. Only 6.9% of teachers expressed a

need to receive support and funding for professional development as well as support and funding


for field trips and other real-world learning experiences for their students. Teacher Interview

Respondent 5 shared this commentary:

Money drives the plan along with student performance. Student performance

would be enhanced by real world situations; in return, the educators would get a

better [achievement] gain, as well as [a] raise. With that being said, a field trip

budget giving real world experiences to the students would be a great plus.

Allowing the students to experience history, plays and many other facets of the

community around us.

Some 22.4% further noted that they wanted support in the craft of teaching. They noted

that this could be accomplished by providing them with meaningful feedback on their

performance and giving them opportunities to take on greater responsibilities and leadership

within the school setting. Teacher Interview Respondent 5 also stated, “There are not many

opportunities for new teachers to gain leadership positions. They are not afforded the maximum

amounts in the compensation plan.” In addition, Teacher Interview Respondent 8 said, “more

compensation for 'extra' duties at the building other than what is already in place.”

Collaboration. In relation to a broad reflection of school values, 47.8% of questionnaire

participants mentioned that collaboration was a positive factor that needed to be further

emphasized in order to increase teacher success and motivation. About 27.6% of teachers felt

that the strategic compensation plan worked against collaboration. The questionnaire data

revealed that some teachers believed that the strategic compensation plan failed to encourage and

reward collaboration. During interviews a number of respondents went as far as to say that the

strategic compensation plan was a source of isolation, discouraging teachers from collaborating

with one another and fostering a culture of competition among faculty members. Specifically,


Teacher Interview Respondent 4 noted, “the program causes competitiveness, not collaboration

and that in itself promotes isolation from collaboration.”

Intrinsic Motivation. Eighty-nine percent of teachers also expressed a willingness to go

the extra mile and do whatever they needed to do to help their students achieve success, even if

doing so did not result in receiving an incentive or raise.

Twelve percent gave responses that indicated that they were clearly focused on the

students rather than themselves. They believed it was their job to be good teachers regardless of

incentives. Teacher Interview Respondent 12 effectively stated:

Becoming a teacher obviously isn't about the money you make; it is about influencing a

child in a positive way. Students need to leave the high school able to function on their

own and to take care of their family.


Questionnaire, interview, and focus group findings related to RQ2. The teachers

presented a vast array of comments and responses that spoke to how the strategic compensation

plan has impacted their behaviors (and attitudes). Those comments and responses were coded,

categorized, and refined into five overarching themes: teacher motivation, going the extra mile,

monetary award, high-quality teaching, and teaching to the test. Table 19 displays the

percentage of the participants’ positive perception, negative perception, neutral response, or no

response for each theme revealed in Research Question 2.


Table 19

Percentages of participants’ positive and negative perceptions by theme in RQ2

Research Question


RQ2

Teacher Motivation 68% 0% 29% 3%

Going the Extra Mile 22% 0% 0% 78%

Monetary Award 62% 0% 0% 38%

High-Quality Teaching 59% 35% 6% 0%

Teaching to the Test 0% 0% 8.6% 91.4%

Notes. N=59.

Teacher motivation. The comments and responses shared by teacher respondents

indicated that teacher motivation was the most prevalent theme that emerged in relation to the

strategic compensation plan affecting teacher behaviors. Sixty-eight percent of the participants

agreed they would change their professional practices for the compensation plan. Teacher

Respondent 41 said, “if it means staying after hours, prepping additional assessments, or adding

additional professional development to my calendar, yes, I will do it.” In addition, 29% of

comments and responses from teachers indicated they would not change their professional

practices for the strategic compensation plan.

In relation to the compensation plan motivating teachers to excel so that students progress

academically, Teacher Interview Respondent 4 noted, “For the teachers that do have room to

grow, or even ones that don't have room to grow, it is motivation.” Teacher Interview

Respondent 8 further stated, “There are teachers here who have been here fewer years than me

that make close to $800 more than me a month just because they had that chance to make the

extra money. So I do think it's a big motivational piece.” Lastly, Teacher Interview Respondent

6 rationalized how the strategic compensation plan motivated teachers’ behaviors by providing

revenues of reward and incentives. She added, “I think teachers should be rewarded for growth


for doing our job. I think our job is to teach and put students first and if they're showing that

piece, there's where their reward should be.”

The entire focus group was clearly focused on the students rather than themselves, noting

their job was to prepare students for the world after graduation. Focus Group Respondent 2

added,

Your motivation should be the children, not the reward. I mean, the reward is the

children, not the reward that is the monetary. I mean, we all like money, of course, but

we're not doing what we do every day for this alternative compensation, for the bonus or

the extra. We're doing this for the children.

Going the extra mile. Twenty-two percent of respondents revealed positive perceptions

about being rewarded for doing extra for students while 78% offered no response. Specifically,

Teacher Interview Respondent 1 noted, “I believe that the compensation plan model gives

teachers a little extra because we go the extra mile to make sure students succeed.” Additionally

they stated, “It [strategic compensation plan] can weed out ineffective teachers”. Teacher Focus

Group Respondent 4 further stated, “yes, I work hard all year to teach my students the standards,

prepare them for assessments, and give them the confidence they need to achieve. I feel that my

students will reflect my hard work through their achievements.”

Monetary reward. Sixty-two percent of teacher respondents agreed that incentives and

bonuses were incentive enough to motivate teachers to change how and what they do in the

classroom. It gave them a since of appreciation for their efforts. Teacher Interview Respondent

7 explained how the strategic compensation plan motivated teachers to succeed in their craft by

providing means of incentive/reward. She stated, “teachers need a reason to want to succeed,

and the compensation plan allows teachers to be rewarded for their efforts.”


High-quality teaching. The comments shared by teacher interview and focus group

respondents indicated that high-quality teaching was another prominent theme that emerged in

relation to the strategic compensation plan affecting teacher behaviors. Fifty-nine percent of

questionnaire teacher respondents agreed that the strategic compensation plan held teachers to a

higher standard of teaching. Fifty–six percent of the respondents indicated that the strategic

compensation plan promoted an atmosphere of high-quality teaching within the district.

Teaching to the test. The comments and responses shared by 8.6% teacher respondents

indicated that “teaching to the test” was a final prevalent theme that emerged in relation to the

strategic compensation plan affecting teacher behaviors. In relation to the view that the strategic

compensation plan has introduced the “teaching to the test” mentality within the school district,

Teacher Interview Respondent 8 simply stated, “what gets measured gets done.” Teacher

Interview Respondent 4 further added, “in my grade level, our test is norm-referenced, and if we

teach to the test, we have less time to really teach our standards well.” Lastly, in relation to

miscommunication about which academic standards get measured Teacher Interview Respondent

3 noted, “there should be more communication with faculty about the specific criteria to be

measured.”

Quantitative findings related to RQ2. In connection with the qualitative data associated

with Q2, the quantitative findings served as a complimentary data piece. These findings revealed how

participating or not participating in the strategic compensation plan affected teaching behavior as

evidenced by TEAM level of effectiveness scores.

Description of the dataset. The following variables served as the nominal variables of

this study:

TID – a variable that identifies the code name associated with each teacher participant.

ST – a variable that identifies the type of school where each teacher participant worked.


PP – a variable that identifies if a teacher participant participated in the strategic

compensation plan.

The following variables served as the continuous variables of this study:

TS12 – a variable that identifies the TEAM level of effectiveness score of each teacher

participant during the 2011-2012 academic year.





CS1 – a variable that represents the change in each teacher participant’s TEAM level of

effectiveness score from 2011-2012 to 2012-2013. It was used within the dataset to

determine if there is a significant difference between the change in TEAM level of

effectiveness scores of teachers who participated in the strategic compensation plan and

the change in TEAM level of effectiveness scores of teachers who did not participate in

the strategic compensation plan.














Resolving assumptions for variables CS1, CS2, and CS3. Because the sample consisted

of 95 teachers from various schools within the Rural Southeast School District, the assumption

of independent random data was satisfied for all three variables. In order to resolve the

assumption that all three variables had fairly normal distribution in relation to participation in the

strategic compensation plan, the researchers examined the skewness and kurtosis values as

summarized in Table 20. Fairly normal distribution is satisfied when: 1) skewness values are

within the range of -1 and 1 and/or 2) kurtosis values are within the range of -2 and 2. In relation

to participation in the strategic compensation plan, all three variables (CS1, CS2, and CS3)

satisfied the assumption of fairly normal distribution. Satisfying the assumption of fairly normal

distribution tells us that nonparametric analysis is not needed.

Table 20

Skewness and Kurtosis Values for CS1, CS2, and CS3 in Relation to Strategic Compensation

Participation

Variable Skewness Kurtosis

CS1 -0.144 -0.152

CS2 0.049 -0.221

CS3 0.003 0.080

In order to resolve the assumption that all three variables had fairly normal distribution in

relation to no participation in the strategic compensation plan, the researchers examined the

skewness and kurtosis values as summarized in Table 21. Fairly normal distribution is satisfied


when: 1) skewness values are within the range of -1 and 1 and 2) kurtosis values are within the

range of -2 and 2. In relation to no participation in the strategic compensation plan, all three

variables (CS1, CS2, and CS3) satisfied the assumption of fairly normal distribution. It is

important to note, that although the kurtosis value for variable CS3 in relation to no strategic

compensation participation fell outside the range of -2 to 2, fairly normal distribution could still

be assumed because: 1) the skewness value (0.162) fell within the appropriate range of -1 to 1

and 2) the kurtosis value (2.325) was only slightly outside of the appropriate range of -2 to 2.

Table 21

Skewness and Kurtosis Values for CS1, CS2, and CS3 in Relation to No Strategic Compensation

Participation

Variable Skewness Kurtosis

CS1 -0.445 -0.126

CS2 0.383 0.230

CS3 0.162 2.325

In order to resolve the assumption of equal variances, the researchers performed the

following three bivariate fits: CS1 (change in TEAM level of effectiveness scores from 2011-

2012 to 2012-2013) by PP (program participation), CS2 (change in TEAM level of effectiveness

scores from 2012-2013 to 2013-2014) by PP (program participation), and CS3 (change in TEAM

level of effectiveness scores from 2011-2012 to 2013-2014) by PP (program participation). The

researchers then performed Levene’s test in order to determine equal variance. If the p-value

associated with Levene’s test is greater than α=0.05, the assumption of equal variance is

satisfied. The p-values as generated by Levene’s test for each continuous variable are listed in

Table 22. Being that all p-values are greater than α=0.05, the assumption of equal variance is


satisfied for variables CS1, CS2, and CS3. Satisfying the assumption of equal variance tells us

that nonparametric analysis is not needed.

Table 22

P-Values for CS1, CS2, and CS3 as generated by Levene’s Test

Variable p-value

CS1 0.756

CS2 0.668

CS3 0.662

Quantitative analysis via independent t-tests. The researchers first created bivariate

plots of the following variable pairings using JMP Pro 11: CS1 by PP, CS2 by PP, and CS3 by

PP. Being that the assumption of equal variance was satisfied for variables CS1, CS2, and CS3,

the researchers decided to run the “Means/Anova/Pooled t” JMP function for each bivariate plot.

Running this function produced the p-values associated with each independent t-test (bivariate

plot). The resulting p-values are listed in Table 23.

Table 23

P-Values Associated with Independent T-tests

Bivariate Plot p-value

CS1 by PP 0.962

CS2 by PP 0.963

CS3 by PP 0.927

Note. *p<.05 denotes statistical significance

Since all p-values were greater than .05, the quantitative data suggested that there were no

statistically significant differences in the means associated with the changes in TEAM level of

effectiveness scores for the conditions of strategic compensation plan participation and non-

strategic compensation plan participation.



Questionnaire, interview, and focus group findings related to RQ3. Only 43.1% of

the teachers surveyed were in the district prior to the implementation of the strategic

compensation plan. Eighty-five percent of the teachers interviewed were employed in the system

prior to the implementation of the program, with only a few being hired in the first year of

implementation. Overall, 79.3% of the teachers presented a multitude of comments and

responses that highlighted how the strategic compensation plan has impacted teacher recruitment

and/or retention. Those comments and responses were reported under the following

subheadings: teacher recruitment and teacher retention. Table 24 displays the percentage of the

participants’ positive perception, negative perception, neutral response, or no response for each

theme revealed in Research Question 1.

Table 24

Percentages of participants’ positive and negative perceptions by theme in RQ3

Research Question


RQ3

Teacher Recruitment

0% 89% 0% 11%

Teacher Retention Awareness

18.7% 0% 79.3% 2%

Notes. N=59.

Teacher recruitment. Eighty-nine percent of teachers who participated in the strategic

compensation plan during their first year of employment noted that the plan was not specifically

a draw for them, but that the prospect of bonus pay did not hurt their perceptions prior to

employment. Teacher Interview Respondent 3 stated, “I'm not aware of the beginning teacher

benefits. However, the enticement of a yearly bonus would be a benefactor that would aid in


recruitment.” Teacher Respondent 1 simply further emphasized, “People naturally like the idea

of earning more income.” Those Teacher Interview Respondents who have served in the district

for a number of years noted that the opportunity for rewards might be an incentive for younger

teachers to join the program or come on to the staff. Teacher Interview Respondent 7 stated,

“For younger teachers it [the strategic compensation plan] provides opportunity for growth out of

the gate.”

Incentivized hard-to-staff positions might be particularly attractive, but focus group

respondents did not feel that the strategic compensation plan inherently added to the recruitment

draw. Teacher focus group respondent 2 reiterated this point by noting, “While there is doubt

that teacher recruitment relies solely on the compensation plan, it is an extra incentive to a career

as a teacher.” Most often the reason that was given for coming to the district was the reputation

for academics, the draw of a small community, and the location. Teacher Interview Respondent

9 added to this notion by stating:

[The district] has a reputation of having student success. Part of the strategic

compensation plans focuses on goals for each school based on student

achievement. It doesn't take a good teacher long to realize that those student

groups meeting those goals are working with some great teachers. Who wouldn't

want to be a part of that?

Teacher Focus Group Respondent 3 went on to say:

I honestly don't think it [the strategic compensation plan] helps with recruitment at all.

We had nearly 25 teachers leave last year [the 2014-2015 school year]. Most went 15-20

minutes to make $10,000 more on salary and pay out $3,000 less in health insurance costs, not to

go with the 'Win Or Else' mentality. I am all about educating kids, but test scores are only a


small fraction of the definition of education. We are focused on winning “the test-score state

championship” and when asked about how another school or system does things [to improve

achievement], the answer is “We have better scores!” We have a high turnover rate in teachers.

Most [teachers] are not from here. They drive in from out of town, and taking a job here is more

out of necessity than the compensation plan.

Teacher retention awareness. When addressing teacher retention, 79.3% of teacher

respondents were highly aware of the recent turnover and what they perceived to be low rates of

teacher retention in the schools. They equated low retention with low baseline salaries, which

they reported being less than those of surrounding counties. Specifically, 77% of teacher

respondents did not attribute the turnover to the program itself, but rather to low baseline

salaries, which they reported to be less than that of surrounding counties, and lack of reasonable

benefits, such as affordable health care. Teacher Interview Respondent 4 stated, “Lower base

salary is a stumbling block for many teachers.” In addition, focus group respondents also noted

that the lack of reasonable benefits such as affordable health care also contributed to high

turnover/low retention. Teacher Interview Respondent 8 shared this commentary:

I feel that somehow at least a part of the state pay raise should be given for cost of living.

Health care benefits should be addressed, not sure how but it is a contributing factor to

educators leaving our school district to teach in other districts.

The lack of safety and comfort in light of increasing cost of living was a driving factor

for those teachers seeking employment elsewhere. However, 18.7% of teachers expressed that

those leaving seemed to be leaving for career advancements or because they struggled to meet

the expectations of the district. Two percent of respondents had no comment.


Conclusion and Discussion

Summary

This study examined the perceptions of teachers employed in the Rural Southeast School

District concerning their newly adopted Strategic Compensation Plan. The district implemented

a strategic compensation model in the fall of 2011 for all newly hired faculty and allowed current

faculty to opt in or out. The district desired qualitative data to inform its examination of the plan.

The purpose of this study is to determine the teachers’ perceptions of the strategic compensation

model and its influence on teachers in the Rural Southeast School District, specifically, if teacher

behaviors changed because of the plan, and if the plan affected their decision to remain or leave

the district.

In order to fulfill the purpose of the study, the researchers designed the following

research questions:

1) What are the teachers’ perceptions on strategic compensation in the Rural Southeast

School District?



3) How has strategic compensation affected teacher recruitment and/or retention in the

Rural Southeast School District according to teachers’ perceptions?

These research questions were developed on the basis of the conceptual frameworks of

equity theory and motivational theory. After collecting data, the researchers focused on finding

similarities and patterns in the responses that were given. In the following sections of this

chapter, the findings are reviewed, conclusions are drawn, and the implications of the findings

are discussed.


Interpretation of the Findings

Research question 1. The first question we sought to address in this study was what are

the teachers’ perceptions on strategic compensation in the Rural Southeast School District?

Regarding this issue, we found that teachers have mixed perceptions about the various facets of

this question. Of the 11 emerging themes, percentages from five conveyed overall positive

perceptions and 6 showed overall negative perceptions, including some strongly worded negative

perceptions.

The teachers’ overall perceptions of the school system were positive, as 84.5% reported

having positive perceptions of the district. However, there was ambiguity in the perception of

the district in relation to the strategic compensation plan. For example, 94% of teacher

participants felt that although student achievement measures are important, these measures are

not necessarily synonymous with teacher performance. Eighty-four percent believe student

achievement scores measure teacher effectiveness, and although 20.7% support these scores as a

measure of effectiveness, 5.2% would like input as to which measures are used.

The uncertainty expressed by teachers in the strategic compensation plan continued in the

area of fairness of teacher assessment. Specifically, four areas of concern were student grouping

and grade level, validity of grade level testing, ancillary teacher participants, and student

capacity for learning. Most teachers, 67%, agreed that student achievement scores are important

data; however, 15.5% reported the belief that multiple years of assessment data are a more

accurate measure of student achievement. In addition, 22.4% doubted the validity of using grade

level testing as a measure of teacher effectiveness. The validity was further questioned by the

notion of teachers as ancillary participants. Specifically, 23% of teachers question how teacher

effectiveness can be measured when some teachers are not tied to a specific group of students.


Additionally, 28% of teachers reported that student capacity for learning is a key factor in

behavior. However, 8.6% believe that although students can still learn they have essentially

reached capacity before high school, thereby questioning the connection between student scores

and teacher effectiveness. These findings show teachers' equivocality of the strategic

compensation plan.

There were three areas of negative focus shown in the findings: perceptions of the

strategic compensation plan, teacher salaries, and collaboration. Most teachers, 79%, felt the

plan did not provide equal opportunities for teachers. Fifty-seven percent expressed concern on

the starting salary being lower than other surrounding districts, even though the success of the

school system and its good reputation continued to give teachers a reason to join and remain in

the system. Concerning teachers’ perceptions on strategic compensation in the selected the Rural

Southeast School District, 77% of the focus group participants expressed that the compensation

plan was not clear and needed continuous explanation. There was a belief among teachers that

there was a high weight of student achievement in determining their value as teachers, but they

did not necessarily know the criteria utilized for the determination. Teachers also reported that

the strategic compensation plan created a competitive environment, which worked against the

collaboration found essential in teaching, as reported by 47.8% of teacher participants. Overall,

49.7% of teachers reported that the strategic compensation plan has caused them to be busier and

has caused more stress than before its implementation.

Overall, teachers were supportive of the concept of earning various bonuses as a reward

for exemplary teaching. The positive perceptions of the plan, the researchers felt, were reflective

of the positive teaching and learning beliefs demonstrated by the teachers. The teachers wanted

to be effective, they wanted to help their students learn, and they were invested in making


changes to help that happen. They did not have any negative perceptions of achievement as a

measure if applied fairly. Most teachers were willing to take on the additional workload in

return for additional pay.

However, there were negative perceptions surrounding how the bonuses were

determined. Additionally, there were other negative perceptions noted on options to participate

or not participate in the strategic compensation plan. There was also a lack of teacher

participation in the process of determining goals and standards for excellence in teaching. The

negative perceptions of the program tended to be geared more toward perceptions of fairness in

the program. For example, teachers wanted to have a say in the evaluation and rating processes,

have clarity in how they are assessed, and have a measure that would be fair to all teachers. It

appeared the changes in pay for those teachers who opted not to participate in the plan made

teachers have more negative perceptions as well.

For this research question, we found that teachers perceived the strategic compensation

plan to cause more stress and increased workload as opposed to not having the plan in place.

Teachers recognized that the standards for effectiveness are set high. They must meet criteria in

a range of performance areas to earn the strategic compensation plan bonuses, and doing so may

require that they change teaching strategies and increase student outcomes. Teachers in the

district had to determine best practices for meeting student learning styles to meet a broad range

of students effectively.

Research question 2- qualitative findings interpretation. The second question we

examined was what teacher behaviors have been affected as a result of the strategic

compensation plan in Rural Southeast School District according to teachers’ perceptions? The

emphasis placed on student achievement by the compensation plan has influenced teacher


behaviors. However, in regard to future teacher behaviors, Teacher Respondent 4 noted: “I don't

believe that a single year should be the sole deciding factor, rather a three or five year average.”

This belief was supported by the results of this study, specifically that 67% of respondents

believed more data was needed to determine teacher effectiveness and 15.5% believed multiple

year assessments were a better measure of teacher effectiveness. This suggests that the average

performance should be considered before enforcing teaching method changes.

However, teacher behaviors may decline as morale decreases, evident in Teacher

Respondent 9: “How a student performs should have nothing to do with a teacher's worth.” The

validity of testing may affect teacher behavior, noted by teacher respondent: “Most teachers in

my PreK-2 grade band would agree that student achievement should be included as a component

of the plan. However, many would also argue the SAT-10 test we currently use is not a true

identifier and that an alternative test should be administered in its place.”

In other cases, teachers note requirements and necessities of ‘teaching the test,’ evident in

Teacher Respondent 4, “In my grade level our test is norm referenced and if we teach to the test,

we have less time to really teach our standards well.”

On the other hand, Teacher Respondent 8 believes, “What gets measured gets done.”

Regarding intrinsic motivation respondent states: “I think that your best teachers would still be

your best teachers whether they are receiving compensation or not. Their motivation comes

from within.” However, according to Respondent 4: “Teachers are afraid of not being able to

produce good test scores.” This may prompt negative behaviors, such as cheating.

Based upon the participant perceptions, teacher behaviors have been affected as a result

of the strategic compensation plan in the selected Rural Southeast School District. Across

participants, it was agreed that student achievement data is an important measure of effectiveness


in teaching. Teacher Respondent 8 felt, “the more teacher led in its developing obtainable goals

set each year (still striving for improvement, but not so much to where the teachers feel as if they

cannot succeed), and compensation for 'extra' duties at the building other than what is already in

place” would change teacher behaviors to increase buy-in and best practices.

Research question 2- quantitative findings interpretation. In regard to the

quantitative analysis of the second research question, the findings were analyzed in order to

determine how participating or not participating in the strategic compensation plan affected

teaching behavior as evidenced by teachers’ TEAM level of effectiveness scores. Because all p-

values were greater than .05, the quantitative data suggested that there were no statistically

significant differences in the means associated with the changes in TEAM level of effectiveness

scores for the conditions of strategic compensation participation and no strategic compensation

participation. The researchers interpreted this to show the strategic compensation plan was not

having a statistically significant impact on TEAM level of effectiveness scores, and therefore

changes in teacher behaviors, as related to the strategic compensation plan, were not shown to

directly impact changes in TEAM level of effectiveness scores for teachers in the Rural

Southeast School District.

Research question 3. Our final question was how has strategic compensation impacted

teacher recruitment and/or retention in the Rural Southeast School District according to teachers’

perceptions? According to teachers’ perceptions, the impact of strategic compensation on

teacher recruitment and/or retention in the Rural Southeast School District was conflicting. A

majority of the teachers surveyed were employed in the system prior to the implementation of

the program. Many teachers reported being unsure of the effect on recruitment, which could


mean that candidates are unaware of the compensation plan or on how new teachers to the

system feel about the plan.

Those in the program during their first year of employment noted that the plan was not

specifically a draw for them but that the prospect of bonus pay did not hurt their perceptions

prior to employment. Those who had been in the system noted that the opportunity for bonuses

might serve as an incentive for teachers to join the program or come on to the staff. Teachers in

hard-to-staff positions may especially be interested, but current teachers in the district did not

feel that the program inherently added to recruitment draw. Most teachers agreed the plan itself

is not a drawing factor in recruitment. Most new hires explained that they did not know about

the plan until they were interviewed or hired for the position. The most common reasons given

for coming to the system were the reputation for academics, the draw of a small district, and the

location of the system.

In terms of retention, this was an area where there were strong feelings about several

aspects of the strategic compensation plan. Many teachers felt that the program was the main

contributor to high teacher turnover and low retention in the system. Those teachers believed

that after implementation of the plan, many teachers left due to the loss of salary and benefits.

While some faculty participating in this study saw a connection between the strategic

compensation plan and the rate of turnover at the schools, there was a broad spectrum of

responses and perceptions noted. Teachers were highly aware of the turnover and what they

perceived to be low rates of teacher retention in the school. However, not all attributed the low

retention rate to the strategic compensation plan, but rather to low baseline salaries, which they

reported being less than that of surrounding counties, and lack of reasonable benefits such as

affordable health care. A prevalent note to mention was the teacher belief that base starting


salaries in the system are much lower than the surrounding counties. This belief might have a

counter-effect on how teachers perceive the program itself.

Finally, 6% of teacher participants perceived the loss as representative of those teachers

not willing to work harder to meet the new standards or be effective in the practice. Adding to

that frustration was the level of difficulty required to make gains with some student groups.

Finally, the researchers believe that a variety of factors outside of the actual plan impacted

teacher retention.

Relationship to Previous Research

Performance based pay, or strategic compensation, has come to the forefront of

discussion as a means of improving effective teaching strategies and student achievement in K-

12 education. As noted in the literature review, the existing research on strategic compensation

plans in education has seen mixed results and has left many questions as to effectiveness,

perceptions, and application. A handful of studies conducted across the United States provide

limited data linked to the impact of these plans on teachers. Many of the results of those studies

are contradictory in nature. Limited qualitative studies on teacher perceptions tend to show

negative findings, while most quantitative research on student test scores tied to strategic

compensation show positive results. The broad and variable nature of strategic compensation

plans may cause this contradiction. Adding to this contradiction is the diversity of school culture

and population, teacher unions, and state agency oversight (Goldhaber et al., 2011; Kelley et al.,

2002; Lavy, 2007). There are studies available to explain what strategic compensation plans

represent and how they have impacted student and school outcomes (Lavy, 2007). However,

there is limited research available to examine the impact on teachers, especially their perceptions


of the compensation plans, workload, and teacher retention and recruitment (Covey, 2009;

Goldstein et al., 2011).

Previous research related to research question 1. First, we sought to examine

perceptions of the plan, asking, what are the teachers’ perceptions on strategic compensation in

the Rural Southeast School District? We found that, similar to existing research, teachers in our

study had mixed feelings about strategic compensation or incentive plans. Lavy (2007) reported

similar findings and found there were a variety of drawbacks identified with incentive plans.

They included areas, such as teaching assignment rotations and a fair way of determining what

progress looks like in courses that are different from one to another. In some cases, patterns

were present within certain demographic groups and perceptions shared at a high rate. However,

other areas revealed perceptions were present across groups. We will begin our discussion by

addressing those perceptions within certain demographic groups of teachers.

In our study, there was a visible divide between secondary and elementary level teachers

very much like that reported by Goldhaber et al. (2011). Secondary teachers were more

supportive of the plan than their lower-grade-level peers. In our survey, this was due primarily

to the lack of standardized measures in kindergarten through second grade, special education,

and resource classes that impact the ability to make gain comparisons. Because most strategic

compensation plans or merit pay utilize teacher assessment scores, the divide mentioned above is

due to a lack of student assessment integration into teacher evaluations. Similar patterns were

present within grade level groupings. Teachers not affixed to a student grade-level group, such

as those in academic coaching roles or where testing was subjective in nature as in ELA courses,

were also less supportive.


In addition to grade level centered perceptions, there were also perception patterns among

teachers based on their level of experience. Much like findings reported by Lortie (2002), we

found that more experienced teachers were less likely to have positive perceptions of incentive

plans. This pattern has been consistent in the literature and represents an area where tensions are

high surrounding strategic compensation (Jones, 2013; Muralidharan & Sundararaman, 2011).

Furthermore, the participants meeting similar demographic description echoed the findings of

these studies in specific details. Veteran teachers reported a fear of their financial security. They

also had concerns about the impact on collaborative culture in the school and anger at the

immediate effect the plan had on their pay if they did not sign up to participate (Covey, 2009).

Lortie (2002) talked about the nature of the very culture of education as a sort of great equalizer

wherein all are taken to teach, and teachers earn their way up equally. The discomfort caused by

this culture shift is apparent in the experienced teachers who would no longer be able to rely on

experience level based pay scales that were equal among colleagues (Jones, 2013). In regards to

stress, the greatest factor was a fear tied to feelings of uncertainty regarding their annual pay.

This was also present in the literature, where it was reported that even teachers who had received

incentives were fearful that they would not receive the same incentive the following year (Kelley

et al., 2002; Marsden & Belfield, 2006).

Across levels, the area that garnered the most comment was the use of achievement in

determining teacher effectiveness. Our study showed that teachers of all levels, both participants

and non-participants of the strategic compensation plan as defined by the questionnaire, had

concerns about the clarity of assessment for determining who would receive incentives for their

teaching. The greatest point of concern was the use of measures, such as student achievement

for determining teacher effectiveness. Students often come to the table with varying levels of


ability and are impacted heavily by factors that teachers cannot overcome in the classroom.

Poverty, hunger, emotional and psychological stress, and a lack of support at home are all noted

factors that contribute to educational outcomes. Unlike findings reported by Figlio and Kenny

(2007) where teachers believed that their rewards were invalid, teachers in our study did not

strongly support the use of achievement as one of many measures of teaching effectiveness.

However, the Rural Southeast School District teachers participating in this study want to have a

say in the weight of those actions and means of equalizing the field for an equal opportunity to

earn incentives.

Previous research related to research question 2. Another question addressed by our

study was what teacher behaviors have been affected as a result of the strategic compensation

plan in the Rural Southeast School District according to teachers’ perceptions? A key concern

our teachers reported was the effect of the strategic compensation plan on teacher relationships

and school culture and community (Covey, 2009). Parts of the strategic compensation model in

the district utilize the evaluation and rating of teachers as individuals. Therefore, this model

eliminates some of the concerns and problems of grade-level or teacher team compensation

awards demonstrated in other studies where there were teachers who were habitually not willing

to rise to the challenge of being effective in their practice.

Several teachers in this study noted that the culture was already changed by the plan in

that teachers who were unwilling to work or grow were being “weeded out” by the practice of

strategic teaching, opening the way for those more willing to work harder for their students. This

sentiment was mirrored in the study of a long-standing incentive system in Missouri conducted

by Morice and Murray (2003), who also reported that teachers perceived the plan to be a positive

impact on the level of effectiveness in their schools. On the negative side, the focus on


individual teachers can also lead to perceptions of isolation and negative competition among

teachers, which aligns with existing research (Abd-el-Fattah, 2010).

In our research, teachers talked about a change in the nature of their interactions with

their peers. They went on to explain, that because of the high expectations put on them by the

strategic compensation plan they spend less time collaborating and working with others and

more time worried about test scores and other measures of achievement. This is contrary to

statistical analysis by others that showed no actual damage to teacher cooperation or

collaboration (Jones, 2013; Wells, 2011). It is noted that some positive comparisons were

documented in the findings. Unlike findings by Clabaugh (2009) and Marsden and Belfield

(2006), none of the teacher participants reported feeling that other factors, such as friendship

with the administration or brown-nosing were an issue that could negatively impact their

assessment in the plan. The teachers’ responses consistently had positive perceptions about the

school, academics, loyalty and reputation overall.

Whereas Jones (2013) and Wragg, et al. (2002) reported the increase in documentation as

a positive side effect of the program from an administrative standpoint, our respondents in this

study felt the opposite, that the escalation in documentation was impacting an already heavy

workload. In addition to the summative culture of the school, teachers participating in the study

felt that their workload and stress levels were also impacted by the compensation plan. Contrary

to other studies, participants in this study, although concerned about the focus of the program on

testing, did not report any changes in behavior geared toward specific groups and away from

others (Lavy, 2007). Luckily, unlike findings reported by Wragg et al. (2002), none of the

teachers in this study reported dropping their previous engagements (department head, clubs,

etc.) as a result of the plan, suggesting that in these early stages of implementation, time


management and learning to balance responsibilities and expectations has been the preferred

route.

In some cases, our teachers, like those in the study by Wragg et al. (2002) felt varying

levels of negativity about the support, incentives, practices, and recognition they received from

their schools. There were concerns about clarity, trust, and expectations connected with the

compensation plans that made the teachers less excited about their job situation and the school

system and made them feel more burdened. Additionally, there was not an overwhelming

perception of support and unity, which Callier (2010) found to be a mitigating factor when

teachers weigh the benefits of incentive systems over new employment. Interestingly, unlike

Wragg et al. (2002) who reported that new teachers were more troubled by issues of threshold

pay, our respondents in the study were the bearers of this burden, explaining that they faced

drops in their pay and were upset that new teachers in the system could make more than they

could, and without any experience. These were all reasons the teachers perceived as causative

agents for the high rates of turnover they felt were occurring in the Rural Southeast School

District and were parallel to existing studies that suggested similar impact (Wells, 2011).

Previous research related to research question 3. Our final research question was how

has strategic compensation affected teacher recruitment and/or retention in the Rural Southeast

School District according to teachers’ perceptions? In regards to recruitment, very few teachers

felt that the incentive plan was a big factor in recruitment of new teachers, including new

teachers who were asked whether the plan was a consideration in their decision to come to the

district. It is noted that many, both regarding retention and recruitment, attributed this more

toward other factors, such as low base salaries and location, rather than the plan itself and

perhaps the plan had too much to overcome to draw applicants specifically. These findings are


similar to findings by Wragg et al. (2002) who found similar problems and that they could be

remedied with a higher base salary in addition to the compensation incentives.

According to Holcombe (2010), for a compensation plan to be effective in recruitment, it

must be clear enough to be explained in a minute or less. Participants in this study frequently

pointed out that the plan put in place was lacking in clarity, a factor likely to negatively impact

perceptions. An absence of clarity can prevent teachers from buying in to the system due to

confusion, fear, or misunderstanding. Holcombe (2010) also laid out key elements of planning

for strategic compensation that included clear goals for retention and recruitment over a span of

years of implementation. Although goals were not specifically mentioned by participants, their

disconnect between perceptions of the compensation plan and retention demonstrate a need for a

clear vision and goal to be shared to make retention and recruitment possible. Overall, the

concerns noted regarding both retention and recruitment appear to be intertwined with other

themes of discontent and concern throughout the data, and it would be interesting to see through

further study, whether other solutions, not directly related to strategic compensation, might alter

the perceived impact on both.

Discussion and Conclusions

Discussion of research question 1. We found that teachers have mixed perceptions

about the strategic compensation plan. The positive perceptions of the strategic compensation

plan, we felt, were reflective of the positive teaching and learning beliefs demonstrated by the

teachers. In looking at the participation levels and perceptions, most of those involved in the

plan had positive perceptions, whether they opted in or were mandatorily placed on the plan at

employment.


Those perceptions suggest that having an insider understanding of the design through

participation might impact perception. In other words, some of the negative perceptions of the

plan might be based on extrinsic factors that are limited or have nothing to do with the

effectiveness of the compensation scheme in place in the Rural Southeast School District. One

of the common negative perceptions was in regard to the low starting salary and the high cost of

health insurance for teachers. These perceptions, while important, do not necessarily reflect

poorly on the strategic compensation plan. Rather, they show that even with the possibility of

earning bonus performance-based pay, teachers still want and need a competitive starting salary.

Another implication of this research is that the compensation plan was not clear to

teachers and needed continuous explanation. There was a belief among teachers that there was a

high weight of student achievement in determining their value as teachers, but they did not

necessarily know how that criteria was utilized for the determination of receiving performance-

based pay. We believe that the district teachers need to be given the opportunity to truly

understand the compensation plan’s design, goals, and outcomes so that they can fully benefit

from the available performance-based pay.

Discussion of research question 2. We believe based on analysis of the data that

teachers in the district perceive the strategic compensation plan as a motivational factor to work

harder for the students in order to provide high quality teaching and advance student

achievement. Teacher respondents recognize that the standards for effectiveness are set high and

that they must meet criteria in a range of performance areas to earn the plan bonus, which

requires that they change how they teach in some cases, work with students to make gains

instead of maintaining the status quo, and examine their practice to become more productive

with a broad range of student outcomes.


The quantitative findings for Research Question 2 shows that the strategic compensation

plan was not having a statistically significant impact on TEAM level of effectiveness scores,

which showed participation in the strategic compensation plan did not affect those teacher

behaviors which resulted in a change in TEAM level of effectiveness scores. There are several

possible factors that might explain the gap between the plan and TEAM level of effectiveness

scores. First, it is always possible that there has not been enough time between the

implementation of the compensation plan and the measures of performance on TEAM level of

effectiveness. With any program, it is necessary for teachers to have enough time to grow and

adjust to new expectations. Second, there is also the consideration of assessment. It is possible

that since the TVAAS measures student growth and not proficiency on state assessments, the

objectives of the TEAM level of effectiveness score and the strategic compensation plan are not

aligned close enough for accurate comparison. Finally, it is possible that a blanket approach to

teacher development does not provide the teachers with the individual support and learning

opportunities required to build on their areas of need. For this, data collection and clarity of

expectations are required on the part of the school system.

Discussion of research question 3. There were a broad range of responses and

perceptions noted when we asked participant teachers how they felt the strategic compensation

plan has affected recruitment and retention. Most teachers seem to agree that the plan itself is

not a drawing factor in recruitment, with even new hires explaining that they did not know about

the plan until they were interviewed or hired for the position. A persistent belief is that teachers

perceive the general salaries in the system to be lower than the surrounding counties, which

might have a counter-effect on the interest garnered by the program itself. Teachers noted that

regardless of level or years of service, their base salary would not change. Their perceptions are


that although they may earn bonuses, other teachers in surrounding districts are rewarded for less

effort and results. These perceptions appear to demonstrate Adams Equity Theory through the

belief that job satisfaction decreases when employees perceive an inequity of reward (Huseman

et al., 1987, p. 222). Teachers within the system felt that the overall reputation of the system for

academics, plus the location in the region, were more influential factors in recruiting teachers

than the strategic compensation plan.

For some, the loss of fellow teachers was more representative of those teachers not being

willing to work harder to meet the new standards or be effective in the practice. For others, the

reduction in pay for those who opted out, the lack of benefits to supplement the plan, frustration

at the difficulty in making gains with some student groups, or being measured in an alternative

position were driving factors. Summarily, it is likely that a variety of factors outside of the

actual plan are impacting teacher retention. Clearly the faculty participating in this study sees a

connection between the strategic compensation plan and the rate of turnover at the schools.

After analyzing the questionnaire responses and coding the interview and focus group

discussions, it is clear to the researchers that teachers in the selected district take great pride in

their work. Several teachers had chosen to stay in the district after being offered better paying

teaching jobs in surrounding counties. Those teachers chose to stay because they were satisfied

with their jobs. An important consideration in light of these responses is that of extrinsic versus

intrinsic motivation. According to Herzberg (1968), some people are more driven by external

factors such as benefits, pay incentives, and other bonuses; however, others are intrinsically

motived, valuing personal pride in their work and work settings over outside reward. For the

teachers assessed in this study, the reward for their hard work seemed to be found in student


success and moments of achievement, and they appeared to be more positive, willing to go

further, and more dedicated to their work regardless of incentives.

Discussion of other findings. The data revealed much about the teachers themselves, as

well as the concerns that the district will need to address. Teachers want assurance that the plan

is equitable, well supported, and that they have what they need in order to ensure their students

can succeed. There is no perfect system; however, balancing the teacher needs and concerns

along with stakeholder needs and concerns will improve the opportunity for a successful plan.

These findings could be related to Adam’s Equity Theory, which proposes that as a result of the

distress of either over-reward or under-reward, inequitably rewarded individuals should

experience lower levels of job satisfaction than equitably rewarded individuals (Huseman et al.,

1987). When teachers’ needs and concerns are met, their sense of equity is increased.

Rewarding those who go above and beyond seems fair and equitable. Moreover, this will

encourage the positive teacher behaviors and outcomes, regardless of experience or education

level.

We want to make sure that we note that we did not find evidence that teachers who have

positive perceptions about performance-based pay are better teachers. Opinions about

performance-based pay vary widely. As previously stated, teachers tend to have an egalitarian

view of their role as educators. Whether a teacher has a favorable view of strategic

compensation has no bearing on that teacher’s ability to be an excellent educator. As

researchers, we want to be careful that we are not implying through this study that good teachers

favor strategic compensation and poor quality teachers do not. That is not our sincere belief.

Pay schemes and designs vary widely, which makes any performance pay system hard to


compare with others. A teacher’s negative perceptions about performance-based pay do not

mean that he or she is a less quality educator.

Recommendations for Practice

In this study, the researchers investigated the teacher perceptions of the strategic

compensation plan. Based on the findings from the questionnaire, focus groups, and interviews

we have four recommendations for practice. The first recommendation is for Rural Southeast

School District to do a book study and/or professional development workshop on perception or

paradigm shift of change. The work of Carol Dweck (2014) on fixed mindset versus growth

mindset offers a framework to allow teachers to see possibilities instead of challenges. The

Rural Southeast School District, like any people-centered organization, would benefit from the

growth mindset research and work of Dweck. Additionally, Dweck’s framework for growth

could be paralleled with Herzberg’s Motivational Theory to develop an understanding of how

intrinsic and extrinsic motivation work. The implementation of a professional learning

community (PLC) in which teachers could discuss and develop an understanding of

stakeholder’s expectations on public schools would allow the PLC members an outlet for

expressing their fears and frustrations. In turn, the PLC facilitator could utilize Dweck’s work of

growth to help teachers build a communication plan that teachers could use when talking with

parents, speaking with the public, and most importantly, when discussing the implementation

and refinement of the strategic compensation plan. The PLC work could satisfy both the internal

and external motivator’s defined by Herzberg and empower teachers to feel they were in control

of their future.

Understanding that striving to continuously learn and develop new skills improves their

intelligence as well as the students they teach. Because of the growth mindset that the strategic


compensation plan offers to the organization, the researchers believe the study could offer segue

for teachers to see the need for the change. This paradigm shift is valuable for the teacher in the

classroom as well as an employee of the organization, which leads us to the second

recommendation.

Our second recommendation is for the Rural Southeast School District to consider

professional development regarding the Tennessee Educator Acceleration Model (TEAM).

Several teachers indicated that they did not have clarity as to how their evaluation scores were

tied to the strategic compensation plan. Understanding TEAM could help teachers not only

better understand the evaluation process, but also provide clarification to help teachers fully

understand how the strategic compensation plan works and how they can earn additional pay

through their performance during teacher evaluations.

The researchers’ third recommendation is for the Rural Southeast School District, or any

district interested in putting into place a strategic compensation system, to meet openly with

teachers. The team believes that building the strategic compensation model with teacher input is

critical for success. The process could utilize a framework that will allow the leadership to

facilitate the conversation and build community and teacher capacity. The following

collaborative outline and timeline is an example of building a strategic compensation model

during a school year to be implemented the following year:

1. Community Engagement Meeting and Surveys (November/December) – invite 30 to 40

community stakeholders for input and feedback on building a strategic compensation

plan. Include parents, teachers, business owners, government officials, industry leaders,

etc. to explain the project and gain feedback. This type meeting will allow teachers to

hear from stakeholders outside the organization. This is valuable knowledge for teachers


and educational leaders to understand public expectations when allocating taxpayer

resources. Conduct a survey for all teachers to participate in for direct feedback.

2. Focus Group Meetings (January/March) – the focus groups should be 10 to 12 people

made up of teacher-leaders, school/system leaders, and one or two key members of local

government that are tied to school funding. The focus group will develop the primary

bonuses and supplements to be implemented based on feedback from the community

engagement and teacher survey feedback. The group would meet two to three times

based on need and development of plan.

3. Plan Building Team (April/May) – the group would be made up of three to five leaders

of the system that would build the strategic compensation plan and implementation

timeline. The group should have at least one teacher and one building level leader. This

would be the final step before the director provided the plan to the board for approval.

4. Annual Review (April/May) – the research team believes a team of three to five school

personnel and at least one community member should review the plan for needed

changes and to ensure that the plan goals are being met.

Giving teachers clear expectations, requirements, and benefits of participating in a

strategic compensation plan will enhance its success. Also, it would be to the advantage of the

system to maintain the annual review and dialogue with teachers. Having continuous open

dialogue that includes teacher input is in alignment with the research of Holcombe (2010) as well

as Lussier and Forgione (2010), and the researchers agree that sustainability and longevity of the

strategic compensation plan would be the result.

The researchers believe it is important that teachers be supported, encouraged, and

empowered. Collectively, all of these areas form the underpinning of a successful strategic


compensation plan that inspires buy-in from the teachers. Additionally, approaching the school

district as a community of learners strengthens teacher efficacy. When including students,

teachers, administrators, and district stakeholders in the development of rewards, a synergy is

formed to ensure that teachers meet their goals from year to year.

Our fourth recommendation is that the district creates a strategic compensation guide.

The researchers received good teacher feedback from the questionnaire, interviews, and focus

group conversations, which revealed that many teachers had lingering questions about the

strategic compensation plan and how it works, even after several years of implementation.

During our interviews, several teachers indicated that there is value in understanding how the

strategic compensation plan works. Their comments further indicated that potential new teachers

to the district would be curious about how the strategic compensation plan works. In relation to

this evidence, the researchers feel that a strategic compensation guide would be a useful tool in

clarifying the philosophy, design, goals, terms, and benefits associated with the strategic

compensation plan. Such a guide would prove beneficial to current teachers, future teacher

recruits, other school districts, and state/national figures interested in learning more about the

strategic compensation plan.

The researchers believe that the Rural Southeast School District will have greater success

in retention and recruitment of successful teachers, if these recommendations are put into

practice.

Limitations

This study had several limitations associated with the research. The researchers limited

the survey questions to current and former Rural Southeast District teachers and administrators.

The number of professional staff in the district, which totals 88 as well as the 17 former faculty


members, limited the researchers. Access to individuals completing the surveys and interviews

was limited to participants who voluntarily completed and returned the questionnaire.

Several characteristics of the research limit its application to other settings as well as

interpretation. The primary limitation is that of sample size. Since this study took place in one

district with a sample that was convenient and only representative of the district's population, the

results are limited in respect to comparing to other research samples or populations. New

teachers were not given the same option to participate or not participate that was given to the

teachers employed before the plan’s implementation. The interviews themselves, while

informative, do not always address every element of a problem or research question that might

be meaningful. While the researchers attempted to account for these limitations with open-ended

questions and by recognizing the limits of our sample, there is also a realization that they are

present and may impact the research project. Finally, strategic compensation plans differ widely

from district to district. They are typically customized based on the needs of a district and the

funding available. Because of this, the nature of the strategic compensation itself is a limiting

factor as no two plans can be directly compared to one another. Therefore, any inferences

beyond this group should only be drawn after careful consideration of the target population.

Recommendations for Further Research

Because of this study, we recommend additional research to understand further teacher

perceptions surrounding strategic compensation. First, further study is needed that addresses the

sample limitations of the present study. The research would involve conducting additional

research on a wider scale representing school systems in the region and the state of Tennessee.

This extension of the research would allow for greater generalization and application of the

findings of this study and allow confirmation or addition to the conclusions. Since strategic


compensation is a growing trend in education, it would be beneficial for districts considering

such plans to put in place pre- and post- assessments for gaining teacher reflection and feedback.

Utilizing teacher feedback with strategically placed change may very well make the plan

sustainable for the district.

Moreover, we recommend focus groups to determine what is important to their faculty,

what their concerns may be, and a continuous re-evaluation to ensure that the plan does not

stagnate year to year. Finally, we feel that it is important to assess whether strategic

compensation plans are having an overall positive impact on student achievement, teacher

retention/recruitment, and teacher effectiveness. As these are the primary goals of any strategic

compensation plan, it is imperative that plans be continually monitored to ensure they are

successful. A correlative study on teacher perception and student achievement that utilizes the

qualitative and quantitative findings may offer a clearer picture for school leaders that have

interest in strategic compensation value. Additionally, evaluations are necessary to ensure that

any plan put in place meets the goals and outcomes intended.

Reflections

Through our research we have gained insight into how teachers perceive strategic

compensation as well as how they perceive their current role as educators. Teachers are typically

motivated to serve the greater good and, while they desire to be compensated well through

financial and other benefits, overall they tend to be more intrinsically motivated. This was true

in our research as well with multiple teachers expressing that they desired to have positive

feedback from administrators and to know that they were doing well as they performed their

jobs.

It is noted that salary is connected to the strategic compensation plan so even if there


were no perceived impact of the plan directly on retention, it was at least an indirect factor in

retention rates. Teachers are professionals in terms of education and licensure and feel they

have a reasonable expectation of security and some comfort for themselves and their families

when it comes to pay and benefits. The lack of this security and comfort in light of increasing

cost of living was a driving factor in their desires to seek employment elsewhere and their

perceptions of teachers whom they feel are leaving the system at a high rate.

It was also interesting to see that teachers feel burdened by the current focus on

assessments as the primary measure of the success of teachers, students, and schools. While they

want their quality teaching to be validated through good test scores, the current level of emphasis

on testing can be overwhelming and at times discouraging.

Building relationships with educators and administrators in the Rural Southeast

Tennessee District was beneficial to the researchers. Seeing how the district was able to reward

teachers for a job well done was enlightening. None of the researchers currently work in districts

that offer performance-based pay, so the conversations in the interviews and focus groups were

extremely interesting and provided insights that we were able to bring back to the school districts

in which we are employed.

Through our collection and analysis of data, we were able to learn to be thorough and

patient. Both of these traits are crucial for educators today. We wanted to be certain that we

clearly told the story of these teachers’ perceptions of performance-based pay. They had

entrusted us with their honest view of the compensation plan, and we sought to accurately

analyze and discuss their perspectives. Taking time to review and code responses was time

consuming, but we wanted to make sure that we understood the teachers’ points of view.

Quality, balanced research can be difficult to locate, and we hope that as this study is read and


cited by others in the field and that they will find our study to be beneficial as they seek to find

new ways of rewarding teachers for a job well done.

In reflecting on our research team, it was very apparent that each team member brought a

distinctive dynamic that added to the team’s effectiveness. However, this effectiveness was

developed over time and realized during the last three to four months of our work. Our team

worked extremely hard over the last year fulfilling our program requirements, but working hard

does not equate to working smart. Our capstone project has enabled each teammate to develop

and grow their collaborative skills and processes of team collaboration. Each of us had to lean

on our colleagues and place our unconditional trust in them. This last year we all have had “life”

struggles, but it has been through these struggles that we became dependent on each other but

most importantly, comfortable and accountable.

Initially, time became a constraint in which we all had to learn to prioritize. As the

capstone project developed and committee feedback was given, the pressure of working within

the collaborative environment became the next factor of learning with the team. If anyone ever

had the idea that writing a dissertation within a team would be easier, forget it, it’s not! It’s just

different, and that difference is valuable because it teaches accountability to the team. Any of us

might have quit had it not been for our commitment to our teammates and we all became more

dependent on each other. As we entered the last stretch, the temperature of the project rose as we

faced finality of the timeline. It was during the last month of the project that a metamorphism

took place where our team, our committee, and our cohort supporters became a family. As we

reflect, we remember at the beginning that our program director stating that although the journey

will be hard, we would always have support to see us through. It was just as he stated!


Our team experienced many highs and lows with some sizable obstacles along the way

like many of our cohort counterparts. However, we pulled together and accomplished what few

thought possible given our timeline for completion. With many long and late hours of writing

and rewriting, we accomplished our goal with the words “you have successfully defended your

research, congratulations.”


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Appendix A: Informed Consent Letter

Strategic Compensation Model Study

You are invited to participate in a research study investigating teachers’ perceptions of

changes in classroom behaviors as a result of the strategic compensation model in the Rural

Southeast School District. This study is being conducted by Lipscomb University doctoral

candidates/researchers Rick Carter, Trey Holladay, and Jennifer Lancaster under the

supervision of Dr. English, a faculty member in the Department of Teacher Education and

Assessment. Please read this form and ask questions before you agree to be in the study.

Background Information:

The purpose of this study is to determine the teachers’ perceptions of changes in classroom

behaviors as a result of the strategic compensation model in the Rural Southeast School District.

Approximately 95 people are expected to participate in this research.

Procedures:

If you decide to participate, we will conduct a survey with you. The survey will include

questions about your job, the hours you work, how much you earn, the number of classes you

teach in the Rural Southeast School District, and how much you time you spend preparing and

planning to perform your job. The survey will take about 15 minutes to complete.

Risks and Benefits of being in the study:

Participating in this study may not benefit you directly, but it will help us learn the teachers’

perceptions of changes in classroom behaviors as a result of the strategic compensation model in

the Rural Southeast School District. You may find answering some of the questions upsetting,

but we expect that this would not be different from the kinds of things you discuss with family or


friends. You may skip any questions you do not want to answer and you may end the survey at

any time.

The benefits to participation are that the Rural Southeast School District will be able to build

a collection of information from the teachers’ perspective of changes in classroom

behaviors as a result of the strategic compensation model. This collection of information could

be used for potential adjustments and/or possible modifications of the compensation model.

Confidentiality:

Any information obtained in connection with this research study that can be identified with

you will be disclosed only with your permission; your results will be kept confidential. In any

written reports or publications, no one will be identified or identifiable and only group data

will be presented. Research records will be kept in a locked file; only the researchers will have

access to the records. If we record the interview, we will destroy the recording after it has been

transcribed, which we anticipate will be within two months of its recording.

We will keep the research results in a locked file cabinet in Alabama and only the researchers

named in this form and our advisor will have access to the records while we work on this

project. We will finish analyzing the data by February 2015. We will then destroy all original

reports and identifying information that can be linked back to you.

Voluntary nature of the study:

Participation in this research study is voluntary. Your decision whether or not to participate

will not affect your future relations with the Rural Southeast School District and Lipscomb

University in any way. If you decide to participate, you are free to stop at any time without

affecting these relationships.


New Information:

If during course of this research study we learn about new findings that might influence your

willingness to continue participating in the study, we will inform you of these findings.

Contacts and questions:

If you have any questions, please feel free to contact the researchers conducting this study.

Rick Carter, Trey Holladay, or Jennifer Lancaster. You may ask questions now, or if you have

other questions or concerns regarding the study and would like to talk to someone other than

the researcher(s), you may also contact Dr. Roger Wiemers, chair of the Lipscomb University

Institutional Review Board, [email protected].

You may keep a copy of this form for your records.

Statement of Consent:

You are making a decision whether or not to participate. Your signature indicates that you

have read this information and your questions have been answered. Even after signing this

form, please know that you may withdraw from the study at any time.

I consent to participate in the study.

Signature of Participant Date

Signature of Researcher Date


Appendix B: Research Instrument





Appendix C: Focus Group Questions

Focus Group Questions

1. What do you find most rewarding about teaching?

2. What changes, if any, do you think should be made to the current evaluation tools used

for the Rural Southeast School District’s Compensation Plan?

3. What changes in the compensation plan would you like to see?

4. Have you seen a change in teacher motivation since the Rural Southeast School District’s

Compensation Plan was implemented? Please explain.

5. Is there anything else you want to add?


Appendix D: Interview Questions

Interview Questions

1. How long have you been a teacher?

2. What is your overall opinion of the Rural Southeast School District’s Compensation

Plan?

3. In your opinion, what is/would be the worst aspect of the Rural Southeast School

District’s Compensation Plan?

4. In your opinion, what is/would be the best aspect of the Rural Southeast School District’s

Compensation Plan?

5. How has strategic compensation impacted your decision to retire/remain in the Rural

Southeast School District?

6. Should Student achievement be included in your evaluation? Please explain.

7. Is there anything else you want to add?


Appendix E: Table 25

Table 25

Individual Interview Questions Overall Themed Response by Grade Level

How long have you been a teacher?

Elementary Middle High

3rd, 22nd, 7th 3rd, 16th, 8th 5th, 18, 1st

What is your overall opinion of the Rural Southeast School District’s Compensation Plan?


It’s a good thing Good Good, more info needed

In your opinion, what is/would be the worst aspect of the Rural Southeast School District’s Compensation Plan? Elementary Middle High

It is based on student scores There are a lot of misconceptions Lack of information

How has strategic compensation impacted your decision to retire/remain in the Rural Southeast School District? Elementary Middle High

Has not made a difference in decision Has not affected me staying Has not affected my decision

Should student achievement be included in your evaluation? Please explain.


Yes, with modification of the plan Yes, with modification of the plan Yes

Is there anything else you want to add?


Not at this time Good for everyone and motivates people No


Appendix F: Pilot Test

Lipscomb University College of Education

Doctor of Education in Learning Organizations and Strategic Change

FA13 Capstone Projects Scenario for Pilot Study

Your Help/Part: We are asking for your assistance in vetting our instrument by completing the

survey attached by the link below. Please act as if you are a teacher in the Fictitious Schools

District as you take this survey. Please use your current demographic data. Ex. If you are a

second year teacher with your current system, reflect the same information for the Fictitious

Schools District. Our goal is to make sure our survey is clear and understandable by you the

survey respondent. In the end you will be asked for feedback on the survey and any

recommendations you feel might better clarify or improve the survey. Below you will find

information that better explains the scenario background information. If you have any questions

please email me at [email protected]

Scenario Description: Fictitious Schools District is a small district located about 50 miles east

of a large city. The Fictitious County Board of Education serves more than 1,200 students. It

was the recipient of the federal Race To The Top grant and is designated as an exemplary school

district by the State Department of Education.

The Problem or Issue to be studied: The Fictitious Schools District implemented a strategic

compensation model (merit pay) for all newly hired faculty and allowed current faculty to opt in

if they desired. The model is based on each teacher’s individual effectiveness score. The model


utilizes the following data points on individual teacher performance criteria to surmise a rating

for each teacher’s effectiveness and correlating total score:

o Student test scores o Participation in school professional development o Hard to staff areas

Fictitious Schools District’s Purpose for the Research Project: The Fictitious Schools District

has quantitative data that measures the effectiveness of the program in attracting and retaining

high performing teachers, but it needs qualitative data or how teachers feel about the program to

inform its analysis of the model. The Fictitious Schools District wishes to know what motivates

teacher behavior related to the compensation model. These behaviors and motivations cannot be

explained by quantitative data alone. This project will be primarily qualitative, and it will rely

on data gathered from individual faculty members. Quantitative data such as student

achievement, teacher effectiveness scores, and faculty survey data will be provided by the

district.

You may open the survey in your web browser by clicking the link below:

Strategic Compensation Questionnaire

If the link above does not work, try copying the link below into your web browser:

https://survey.lipscomb.edu/surveys/?s=4KLgyM


Appendix G: MOU

MEMORANDUM OF UNDERSTANDING BETWEEN LIPSCOMB UNIVERSITY COLLEGE OF EDUCATION

AND THE RURAL SOUTHEAST SCHOOL DISTRICT’S BOARD OF EDUCATION

This Memorandum of Understanding (MOU) establishes the relationship and guidelines

between the above parties regarding the research partnership described below.

The College of Education (COE) of Lipscomb University offers the Doctor of Education

(Ed.D.) degree in Learning Organizations and Strategic Change. This degree is focused on

preparing leaders for public and private organizations and academic settings. The program

culminates with a practical, collaborative capstone research project with a partner organization,

the selected Board of Education, ("The Client") that has requested a Capstone Team to address

a real research need in an authentic setting. Successful completion of this capstone project will

fulfill part of the requirements for completion of the Doctor of Education degree.

The Rural Southeast School District serves more than 1,200 students. It was a recent recipient

of the SCORE Prize and is designated as an exemplary school district by the Tennessee

Department of Education.

The College of Education at Lipscomb University and the Client are entering into an operating

under this MOU for a research partnership and agree to the following.

I. REQUEST FOR ASSISTANCE

The Client has submitted a Request for Assistance (RFA) outlining the following research

need:

What are the qualitative factors, which lead teachers to be high performing? Specifically, how

effective is the strategic compensation program used by the Rural Southeast School District in

motivating teachers to be high performing teachers under the plan's parameters?


II. PROJECT PARAMETERS

The COE will supervise and direct a team of two to four doctoral students who will frame and

conduct the research, and form recommendations for the client's research need.

The COE will provide the training for the Ed.D. students to complete the requested research

project through its curriculum and capstone project support structures. This training and

support includes but is not limited to quantitative and qualitative research techniques,

instrument design, and development of specific timelines, benchmarks, and processes pertaining

to conducting research, and the assignment of a capstone faculty adviser who will oversee the

team throughout the research project.

The Client will provide quantitative data as necessary including student achievement data and

teacher effectiveness data. This data will have no identifying factors other than, randomized

identifiers. The Client will provide qualitative access to administration board members,

teachers, staff and community stakeholders.

III. PROJECTED RESEARCH TIMELINE

The Client will present a 10-minute presentation (including Q & A) of the RFA to the Fall 2013

Cohort on Client Presentation Day, which is scheduled for the evening of Monday, June 2, 2014.

∼ June 2, 2014: Client Presentation Dinner. The Client will present a 10-minute presentation (including Q & A) of this project to the Fall 2013 Cohort.

∼ June 6, 2014: cohorts return ranking sheets

∼ June 9, 2014: Teams assigned

∼ June 30, 2014: Teams should have met with Client

∼ September 8, 2014: deadline for project proposal to Client

∼ September 15, 2014: deadline for Client approval or revision request of proposal

∼ September 22, 2014: deadline for project proposal submission to Lipscomb IRB. Substantive changes requested by the IRB will be discussed with the Client prior to implementation. Pilot testing of instruments and official collection of data may not begin until approval has been received by the IRB.

∼ January 30, 2015: deadline for submission of first three chapters to the Juried Review Committee. The Capstone Team will submit a draft of the first three chapters of their research manuscript and any applicable research instruments to their juried Review


Committee. Chapter three should include a description of pilot testing of research instruments if applicable. The Juried Review Committee and the Client must approve the final research instrument(s) before official data collection begins.

∼ TBD, November 2014- January 2015: Upon receiving approval from the IRB, the Capstone Team will formally begin the research.

∼ June 1, 2015: target date for completion of data analysis

∼ July 15-October 15, 2015: window for presentation of research to Client and Juried Review Committee

∼ Client will complete evaluation of the analysis and the project experience one week after presentation

∼ July- November 2015: team completes technical review and uploads to ProQuest electronic copy sent to Client for use at Client's discretion.

∼ December 12, 2015: (tentative) graduation

IV. LIPSCOMB UNIVERSITY'S INSTITUTIONAL REVIEW BOARD (IRB)

Capstone students are required to gain approval from the Lipscomb IRB prior to conducting

research involving human subjects. All capstone students will submit a research proposal to the

IRB. This is to be an electronic submission to the chair of the IRB at [email protected] with a

cc. to the faculty capstone advisor, Dr. Hebert, [email protected], and Dr. Wiemers,

roger.wiemers@lipscomb .edu. The research proposal will be submitted to and approved by the

Client prior to submission to Lipscomb's IRB.

V. FUNDING

The Capstone Team, the COE, and the Client will make every reasonable effort to minimize

costs associated with this project.

As of the date of the signing of this document, the project presented by the client is

expected to require no funding by either the COE or the Client.

Capstone Team members are expected to be responsible for normal and customary costs

associated with doctoral students engaging in doctoral research (i.e. cost of mailings printing,

paper, envelopes, postage, transportation, phone calls, email, etc.). However, should the

Capstone Team members identify what they consider to be an out-of-the- ' ordinary funding

need, then the team members should seek funding from the Client during development of their


project proposal and prior to submission of the proposal to Lipscomb's IRB. Regardless of

when the funding need is realized, written approval and agreement to provide funding should

be received from the Client prior to any expenditure being made. Expenditures incurred

without expressed written approval from the Client will be the responsibility of the Capstone

Team members. Team members will be provided a copy of this MOU.

Lipscomb University shall indemnify and hold harmless the Client, its officers, agents, and

employees from any and all claims, losses, damages or liability, including attorney's fees,

resulting from or attributable to the acts of Lipscomb University its employees or agents.

IX. AUTHORIZATION

On behalf of the Lipscomb University College of Education and the Client, the undersigned

agree to the above stipulations and pledge that the organizations will strive to the best of their

abilities and in good faith to complete these objectives.

Further, we pledge that should the need for modifications arise, we will in good faith

attempt to make such changes or additions as the situation dictates and as are further

detailed in subsequent mutually agreed upon addendums to this document.

X. MISCELLANEOUS TERMS

The following terms shall apply in the interpretation and performance of this MOU:

Relationship of the Parties- This MOU shall not be construed to create a relationship of

partners, brokers, employees, servants or agents as between the parties.

A. Advertising and Publicity- Neither party shall use the other's name, or any name that is likely to suggest that it is related to the other institution, in any advertising, promotion or sales literature without first obtaining the written consent of the other party. Any publications regarding this MOU must be reviewed and approved by the parties.

B. Governing Law: Forum -This MOU shall be governed by and construed under the laws of the State of Tennessee, which shall be the forum for any lawsuits arising from an incident to this MOU.

C. Waiver- A waiver of any breach of any provision of this MOU shall not be construed as a continuing waiver of said breach or a waiver of any other breaches of the same or other provisions of this MOU.

D. Non-Assignment - This MOU may not be assigned by either party without the advance written consent of the other.


Severability- In the event one or more clauses of this Agreement are declared illegal, void or

unenforceable, that shall not affect the validity of the remaining portions of this Agreement.

<The signatures have been purposefully deleted to maintain the anonymity of the Client. >


Appendix H: NIH Certificates of Completion



Appendix I: IRB Approval



Appendix J: Team Member Biographies

Rick Carter

Rick Carter is a fifteen year public school educator; eleven as an administrator. He holds a B.S., M.Ed., and Ed.S. from Jacksonville State University and is presently in defense of his Doctorate in Educational Leadership and Strategic Change from Lipscomb University. He has served as a principal for over seven years earning Alabama’s Principal of the Year in 2013 and the Council for Leaders in Alabama Schools (CLAS) Leadership Award for Alabama in 2013. He also led his school in a transformational one to one initiative with Apple earning his school system the National Apple Distinguished System title in 2014-15 while adding Apple Distinguished Principal to his list of honors. Mr. Carter speaks frequently on school improvement, school culture, and technology integration on both the national and state levels. He serves as a mentor for new principals and assistant principals for the Alabama State Department of Education. He received his mentor certification from The National Association of Elementary School Principals. His other experiences include assistant principal, athletic director, elementary teacher, secondary teacher, and coach. Mr. Carter has been married to his wife, Shannon Carter for more than seventeen years They have four children, Helen Grace, Katelyn Marie, Sarah Jo, and Megan Sally.

Jennifer Dunlap

Jennifer Dunlap graduated in 2001 with a bachelor’s degree in Integrative Studies from the University of Memphis. She taught seventh and later fifth grade as she pursued a M.Ed. in Gifted Education, which she attained in 2006 from Northeastern Illinois University. While teaching fourth grade in the Clarksville Montgomery County School System, she has served as grade level team leader and is currently one of three elementary math lead teachers for the district’s twenty-seven elementary schools. In addition to teaching her students, her duties include leading district-wide staff development sessions as well as articulating curricular connections within and across content areas. She currently teaches fourth grade math and science at Barksdale Elementary School in Clarksville, TN. She has a passion for being challenging and engaging in her lessons so that her students are able to make real world connections through STEM integration.

W. L. ‘Trey’ Holladay III

Trey Holladay is a thirty-year veteran public school educator with twenty-seven years spent in educational leadership. He holds a B.S.Ed. from Athens State University in social science, a M.Ed. from the University of West Alabama in educational leadership, an Ed.S. from Lincoln Memorial University in educational leadership and presently in defense of his Doctorate in Educational Leadership and Strategic Change from Lipscomb University. He is in his third-year as superintendent of the Athens City Schools system. His experiences include system-wide administrator, high school principal, elementary principal, assistant principal, athletic director, classroom teacher, and head football coach in the state of Alabama.


Trey has been a frequent speaker on best practices in continuous school improvement and special education on both the national and state levels. He has spoken at the Consortium of School Networking in Atlanta, Georgia; the National Association of State Special Education Directors in Williamsburg, Virginia; The American Society of Quality in Education in St. Louis, Missouri; and the Alabama State Department of Education’s Mega Conference and Alabama Transitions on best practices in special education models. He has served as a mentor for new principals and assistant principals throughout the state. In the past, he served as the president of the state principals’ association and was selected as the Alabama Secondary Principal of the Year. He believes in life-long learning and frequently attends continuing education conferences on instructional leadership and business improvement. He has been married to his wife, Deborah, for twenty-eight years. They have two children: Will, a recent graduate of Auburn University and arborist and Mary Kate, a freshman at the University of Alabama.

Documents

Perceptions of Strategic Compensation