Strategic Compensation Regional Meetings · Reward/incentivize through strategic compensation Help audit/comply with legislative requirements Increase operations management efficiency

Strategic Compensation Regional Meetings

© 2011, Battelle for Kids.

Welcome, Introductions and Overview What is Strategic Compensation? Current News and Research Measures: Types and Levels Metric Identification Activity Compensation Models from across the Country 5D Model Creation Simulation Activity Work Session Questions and Answers

Today’s Agenda


Welcome!

The Tennessee Department of Education (TDE) is pleased to invite leaders from K–12 school districts currently engaged in or may be interested in researching, developing, implementing and enhancing your district’s strategic compensation program as part of your educational-improvement strategy


Presenter

Tony Bagshaw Managing Director of Human [email protected]/BattelleforKids(513) 303–5652

mailto:[email protected]�

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National, not-for-profit organization that provides strategic counsel and innovative solutions for today’s educational-improvement challenges

Mission-driven team of education, technology, communications and business professionals that specializes in creating strategies that advance: The development of human capital The use of strategic measures The implementation of effective practices in schools

Partner with state departments of education, school districts and education-focused organizations

Battelle for Kids


First to the Top

Battelle for Kids (BFK) is partnering with TDE to expand the use of strategic compensation, value-added analysis, formative instructional practices as well as other educational-improvement strategies to increase student progress and achievement in K–12 public schools statewide as part of First to the Top

Visit the Tennessee Student Progress Portal at www.BattelleforKids.org/Tennessee to learn more and access online learning and resources available at no cost as part of First to the Top

http://www.battelleforkids.org/Tennessee�


What is Strategic Compensation?

The strategic alignment of desired organizational goals

and compensation


Well-Designed SC Systems Can:

Increase student outcomes Reward or incent individual or team performance,

input and actions Increase professional growth through teamwork Allow individuals to control their own reward or pay Link individuals to goals/organizational strategy Assist in recruiting and retaining high performers Deter risk-averse people from entering the system Inform professional development programs Provide data to be used in evaluation


Poorly-Designed SC Systems Can:

Have no effect on student outcomes Have a negative effect on culture Reward or incent the incorrect individual or teams Increase individualism and decrease the desire to

grow through teamwork and professional growth Measure one thing and reward another Deter high performers from entering the system if it is

poorly communicated and goals are unattainable Use poor quality data in evaluation and

compensation


Total Compensation

Total compensation is made up of many components, including: Base pay Cost-of-living adjustment (COLA) Reward or incentive bonuses Supplemental pay Indirect compensation

Health care Retirement Paid time off

Base pay + COLA + Bonus(es) + Supplemental + Indirect = Total Compensation


Types of Pay

Definition:A monetary incentive or reward

Example: Cash

Definition: Pay in the form of services and benefits

Examples: Health benefits Pensions Vacation—paid time off Gym memberships

Direct Compensation Indirect Compensation


Rewards and Incentives

Definition: Direct or indirect compensation given afteran action has been completed or performed or as the result of an effort or attainment of a goal

Example: Bob meets his yearly goals

and receives $1,000

Definition: Direct or indirect compensation given beforean action has been completed in order to motivate him/her to complete that action or accomplish a certain goal

Example: Carol accepts a hard-to-

staff position and receives $1,000 before starting

Rewards Incentives


The History of Educator Compensation

1800sLate 1800s

through Early 1900s

Progressive Era: 1920s

Industrial Unionism:

1960s

•Boarding pay • Pay based on gender and race

• Nepotism and political favors

• Beginning of teacher tenure

• Beginning of step and level

• Collective bargaining• Pay/time/supervision

Merit Era: 1970s –1980s

Performance Pay: Late

1990 –2000s

Current

• Small awards• Little attention to

measurement• Supervisor

favoritism • Federal

government

• System emergence: Denver ProComp, Eagle County (CO), Houston ASPIRE

• Beginnings of strategic systems: TAP

• Compensation as part of an HR strategy

• Innovations in measurement /evaluation

• Sunset of industrial education model

• Obama administration


Everyone Wants to Pay Teachers More…


Motivational Theory

Altruism

Teachers are:•Not motivated by incentives•Motivated to help students learn•Insulted by performance incentives

They have chosen teaching because they want to impact the greater good.

Teachers:•Respond to incentives.•Pay attention to what money is attached.

The system signals what it considers important by how it compensates the workers.

Behaviorism


Motivational Theory

Altruism BehaviorismSt

rate

gic

Com

pens

atio

n


What are the Key Arguments for Change?

Alignment: 70–80% of school expenditures go to personnel

Signals: What do schools signal as important to the staff member?

Fairness: The best and most effective should receive the biggest rewards

Labor Economics Shortages and surpluses Selective retention

Economic Realities: In times of declining resources, we must become more mindful in how we spend


What are the Key Arguments for Change?

Experience is not a proxy for good teaching After 3–5 years, effect of experience vanishes

Education level is not a proxy for good teaching Unless the degree is in an instructional content area

Risk acceptant recruiting Catalyst in driving comprehensive change

Data systems Evaluation systems Professional development systems

Now is the time! (FttT and TIF)


The End Goal

Shifting the Distribution of Educator Effectiveness


15-Minute Break


Current News and Research on Strategic Compensation


Public Perception

The Time Magazine 2010 poll on Americans' views on teacher tenure, merit pay and other education reforms concurs: 61% of those polled believe that teachers are underpaid

given their level of training and importance to society 66% of those polled oppose tenure for teachers 71% of those polled support paying teachers according to

their effectiveness 76% of those polled somewhat or strongly agree that many

of the smartest people do not go into teaching because teaching does not pay enough


Public Perception

Should each teacher be paid on the basis of the quality of his or her work, or should all teachers be paid on a standard-scale basis?

Source: 2010 Phi Delta Kappan/ Gallup Poll


Public Perception

In your opinion, how closely should a teacher’s salary be tied to his or her students’ academic achievement?

Source: 2010 Phi Delta Kappan/Gallup Poll


POINT Study

National Center on Performance Incentives (NCPI) partnered with RAND Corporation funded by the U.S. Department of Education (USDOE)

Study conducted from 2007–2009 to understand the influence of bonuses for grades 5–8 math teachers in Nashville Public Schools

Annual bonus amounts were $5,000, $10,000 or $15,000. POINT paid out more than $1.27 million in bonuses

POINT study tested a “cash for test scores” approach


POINT Study Results

“The introduction of performance incentives in MNPS middle schools did not set off significant negative reactions…But neither did it yield consistent and lasting gains in test scores. It simply did not do much of anything.…Nothing was done to show teachers how to raise their scores. Incentives were not coupled with any form of professional development, curricular innovations or other pressure to improve performance.…Yet POINT provides little support for the view that it is sufficient to tie teacher compensation to test scores, stand back, and wait for good things to happen. The implications of these negative findings should not be overstated.…It might be more productive to reward teachers in teams or to combine incentives with coaching or professional development. However, our experience with POINT underscores the importance of putting such alternatives to the test.”

–POINT Study, 2010, pages 46–47


Government and Foundation Support

Federal Government$4.35 billion for educational reform through Race to the Top funds

TIF (Teacher Incentive Fund) Foundation Support

The Bill & Melinda Gates Foundation works with districts to “dramatically improve teacher effectiveness providing increased pay and greater roles and responsibilities for teachers.”Total future funding (next 5–7 years): $3 billion


Data, Metrics, and Measures


How Can Data Help Us?

By showing what really is…


Why Measure Performance?

Increase strategic alignment between district goals and valuesand individual goals and efforts In most districts, goals and values are built around:

Creating students who are college- or career-ready Closing the achievement gap Increased efficiency and effectiveness in schools and the

central office Ensuring students’ and all staff members’ mental and physical safety Financial accountability and transparency

Increase accountability Improve employee engagement so everyone understands how

they contribute to the organization’s goals Create transparency of goals, work and communications


Why Measure Performance?

Increase data-driven decision making and planning Select professional development programs that align

with needs and goals Reward/incentivize through strategic compensation Help audit/comply with legislative requirements Increase operations management efficiency

and effectiveness Provide outstanding information to internal customers—

students, teachers, staff and administrators Provide outstanding information to external customers—

parents, businesses, community organizations, government agencies, foundations and other stakeholders


Why Multiple Measures?

Measure #1

Measure #2

Measure #3

Measure #4

Measure #5 Total Error Rate

10% 10% 1%

10% 10% 5% .05%

10% 10% 5% 10% .01%

10% 10% 5% 10% 5% .000003%

10% 10%

Lesson: The more measures you use, the more likely your model rewards the right people.


Data on summative and "end-result"

outcomes

Data on the ongoing and in-process activities made by educators

Data on the activities, efforts and

contributions made by educators

Systems Data

ProcessInput

Feedback

Output

Data pertaining to satisfaction, engagement, perceptions


Measuring Educator PerformanceInput Measures Outcomes Measures Process Measures Behavioral Measures

Description • Activities, efforts,

and contributions• Data on summative

and "end-result" outcomes

• Ongoing andin-process activities

• Satisfaction, engagement, perceptions

Examples

• Teacher effort• Evaluations• Attendance

• Value-added data• Student achievement

results• Graduation rates• Dropout rates

• Formative assessments

• “Drop in” evaluation visits

• Time to complete• Error/rework rates

• Gallup student “hope/engagement/ well-being" measures

• Parent/student/employee/community satisfaction or engagement survey

Strengths

• Authentic and direct measure of ‘real’ teaching

• Objectivity, reliability, availability

• Useful in professional development

• Allows instructional adaptation

• Customer service focused

Challenges

• Difficulty in reliability, subjectivity

• Error, complex longitudinal analysis methods

• Time consuming• Same weaknesses

inherent in evaluation or assessment

• Can be difficult to measure if not constructed well

• Perception data may not be reflective of other measures


Levels of Measurement

Individuals Horizontal and vertical teams

Horizontal team: All grade 3 teachers grouped together to measure team efforts

Vertical team: Math teachers in grades 6, 7 and 8 grouped together; metrics measure team efforts

Building District Synergy—meets all measurement goals


What Gets Measured Gets Improved…

We hope for: Meanwhile, we reward:

1. Teamwork2. Equal, individual participation3. All staff buy-in and dedication4. Staff committed to providing

students with a quality education 5. Staff to take ownership and risks6. Staff who are continuous learners

and apply new knowledge7. Outstanding customer satisfaction

and service8. Dedication to a job or organization

1. Individual effort2. Team contribution (free rider effect)3. One group of individuals4. Getting things done, regardless of

problems with quality or what is compromised

5. Staff who never fail or try new things6. Professional development attendance,

even if it’s an unrelated field/practice7. Attendance or the total number of hours

worked regardless of work product, productivity, engagement, results, behaviors, etc.

8. We don’t measure satisfaction or ask staff what they think


Working Lunch

1. Individually or with your table, review the two National Model Metric Identification activities

2. Identify each measure’s level: Individual, Vertical Team, Horizontal Team, School, District

3. Identify each measure’s type: Input, Output, Process, Behavioral

4. View Key Terms handout for definitions


Working Lunch Activity Answers

TBD


National Strategic Compensation Models


Strategic Compensation Model Examples


Strategic Compensation in Education

Urban

• Denver Public Schools, CO

• Chattanooga City Schools, TN

• Guilford County Schools, NC

• Austin ISD, TX• Dallas ISD, TX• Houston ISD,

TX• Chicago

Public Schools, IL

Suburban

• Beaumont, TX• TAP districts,

TX

Rural

• Alaska Teacher & Principal Incentive Program (three rural districts)

• Northern New Mexico Performance-Based Compensation Program (four rural districts)

Charter

• San Antonio, TX: YES Consortium (10 schools)

• Effective Practice Incentive Fund (EPI) (47 charters in nine states)

Other

• Eagle County, CO


Houston Independent School District (Goal + Critical Outcome + Measure)

Goal: Increase Student Achievement1. Critical Outcome: Demonstrate value-added growth using

EVAAS® (Educational Value-Added Assessment System) dataObjective: The district will show value-added growth of all students as measured by EVAAS® dataPerformance Measure: Estimated NCE (normal curve equivalent) gain in all grades on the composite measure across subjects

2. Critical Outcome: HISD will become a Recognized districtObjective: HISD will become a Recognized district as defined by the Texas Education AgencyPerformance Measure: Estimated NCE (normal curve equivalent) gain in all grades on the composite measure across subjects


Board and Superintendent Directive Values Core teachers receive highest pay All staff on campus play a role Measure and recognize:

Campus progress Grade-level and content-area progress By individual teachers, when possible

Campus achievement Attendance

Will not be an egalitarian model Awards must be significant—strive for $10,000 Control budget


Recognize Excellence—Performance Pay


Baltimore City Schools

Model Design•Adjusted step-and-lane, including highest starting teacher salary in the state•Teachers advance through a4-stage (standard, professional, model, lead) career ladder•Teachers earn “achievement points” based on a number of factors: evaluations, participation in certain professional development activities, college courses•Increased flexibility for schools to modify working conditions spelled out in contract (as long as 80% of the school staff supports the modification)


Denver ProComp


Washington, D.C.—IMPACT


Fort Worth—PEAK Award Guiding Principles

The following guiding principles have been drafted to guide the design of the PEAK Awards program:

• Effective teaching is the most important driver of student achievement. It must be driven by a focus on the needs and growth of every individual student.

• Teaching is a team sport. Our students will benefit the most when teachers are supported, enabled and recognized for their ability to effectively collaborate, coach and grow in their craft.

Teachers are our most valuable resource, and the focus of all our efforts is to support teaching and learning.

—FWISD Board of Education, Core Beliefs


Fort Worth—PEAK Award Guiding Principles

The following guiding principles have been drafted to guide the design of the PEAK Awards program:

• All teachers influence a student’s ability to achieve academic success, and, therefore, all teachers must have an opportunity to earn rewards and incentives.

• Measuring teacher quality is complex and cannot fully be captured in a single measure. It must grow to be multi-dimensional to be fully meaningful.

• Start small, monitor, learn along the way, and build the capacity to evolve and adjust the model and approach, as needed.

Teachers are our most valuable resource, and the focus of all our efforts is to support teaching and learning.

—FWISD Board of Education, Core Beliefs


Fort Worth: Middle School Scorecard

Reading/ELA

Math Science Social Studies

SynergyBonus

8th

7th

6th

SynergyBonus

Campus Growth

Grade 7 Reading/ELA Teachers:Individual Cell = $3,000Reading Vertical Bonus = $0Horizontal Grade Bonus = $3,000Campus Scorecard = $2,000Total = $8,000

Grade 8 Science Teachers:Individual Cell = $3,000Science Vertical Bonus = $4,000Horizontal Grade Bonus = $0Campus Scorecard = $2,000Total = $9,000

Grade 6 Reading/ELA Teachers:Campus Scorecard: $2,000Total = $2,000

Principal: Campus Scorecard: $7,500Total = $7,500


Eagle County, Colorado


Longview, Texas

Sought to reward student progress as measured by teacher-level value-added data.

Reward based on a performance standard. Theoretically, everyone could hit the bar. There is no “ranking” from year-to-year.

Budget controls include pro-rating if over-budget. This method defines budget exposure but could reduce the award sizes if many staff reach the bar.

Includes contingency spending to equally distribute balance to teachers receiving awards. If few reach the bar: those who do will receive large awards.


Longview Award Model—A Performance Standard


Lexington City, Tennessee

Concerned about projection data in the system Believed the TVAAS® data had been underutilized as a

school improvement tool Sought a research-based professional development

option that was applicable to all grades and teachers Needed to stay within a budget, but the budget

was generous Participation was voluntary in Year 1 Teachers were awarded for successfully completing

online value-added and formative instruction courses


Strategic Compensation ’09/’10

Retail Zappos.com “Customer service is number 1,” which means

keeping the best of the best ‘09: 20% retention bonus and a Kindle ‘10: 20% retention bonus



Technology—Hard/Software, Service Apple “Hiring is key” More likely to get into Stanford (12.6%) than

being hired (6%) 10% discount Once/year: 25% discount Three 15% discounts for friends/family per year Deals on overstock items Quarterly bonus if the store achieves sales quota Commissions of 10–60% for items sold



Sports—College Football Ohio State head coach Jim Tressel in ’10 Base: $3.88M Bonus: $450K (winning season) 10 hours on private jet and $225K on private plane Family membership to high profile golf course 2–6 tickets and parking passes to all football and

basketball games for life Two new, leased cars every year 100% health insurance



Internet Google “We want employees to come to work and never

want or NEED to leave…” Bonus Free lunch—24-hour cafeteria Flexible work day Free gym pass



Software/ Data Analysis/Consulting SAS Institute, Inc. Benefits include child care, 90% health insurance

coverage, unlimited sick days, free on-site medical center, free fitness center, a lending library and a summer camp for children

Highly profitable—world’s largest privately owned software company

Turnover—industry’s lowest at 2%



Food Service Smuckers “Work environment matters…” Smuckers family members still run the company New hires receive a gift basket Employees enjoy softball games and bowling

nights Bonuses are based on sales, efficiency



Food Service Whole Food Market Attacked from the right (too elitist) and the left

(too pricey) Attracting a workforce that is young and idealistic Salary cap limits top earner to 19 times the

average hourly wage of $16.98/hour CEO John Mackey draws a salary of $1/year


Exploring Strategic Compensation with 5D


Strategic Compensation Design Lifecycle


Lifecycle


5D: Step 1

1. Developing a Compensation Strategy• Organization’s Strategy• Objects of Strategic

Compensation• Development Style—

Top Down/Collaboration• Communication Channel

—Open/Closed• Budgeting/Funding• Sustainability

Deliverable: Describe in one paragraph your district’s intent, purpose, management style and goals—in terms any stakeholder can understand


5D: Step 22. Designing a

Compensation Plan• Model Type:

Bonus or Blended• Model Focus: Centralized

or Decentralized• Participation• Eligibility• Contract Compliance or

Legal Rulings for Federal and State

Deliverables: • Group understanding and

drive towards one model type and focus

• Defined participant list and eligibility rules


5D: Step 3

3. Determining CompensationMeasures

• Measures• Levels of Measurement• Data Collection• Data Reliability• Data Management

Deliverables: • Defined measures and

levels of measurement being used for each participant group

• Beginnings of a defined data plan


5D: Step 4

4. Defining Forms ofCompensation

• Direct, Indirect—or Both• Incentives vs. Rewards• Worth of Measures

Deliverables: • Defined payment (and

form) for each measure identified in step 3


5D: Step 5

5. Delivering theCompensation Model

• Delivery Technology• Delivery Form—Check,

EFT, other• Delivery Frequency• Delivery Timing• Model Communications• Issue Resolution• Delivery Ownership

Deliverables: • Document defining

the above issues• Action plan for

program start


Lifecycle

5D Risk Assessment:

Determination of quantitative or qualitative value of risk related to a project.

Consists in an objective evaluation of risk in which assumptions and uncertainties are clearly considered and presented.


Lifecycle

Execute This phase involves putting the model, communication plan

and other details into action Usually the longest phase in the lifecycle and typically

consumes the most energy and resources Measure

Collecting data is a key aspect of continuous improvement Data collection and process measurement should be prior to,

during and upon conclusion of an award models’ execution The information obtained is necessary to understand and verify

your model’s strengths, weaknesses and improvement opportunities


Activity #2

Review the Strategic Compensation Model Creation Simulation

Create a strategic compensation model for high school (grades 9–12) core teachers using the 5D Design Tool Questionnaire as a guide

Prepare a 10-minute presentation for the Board of Education that provides an overview of your new model


Using the 5D Tool to Guide Thinking

1. Developing a Compensation Strategy

• Organization’s Strategy• Objects of Strategic

Compensation• Development Style—

Top Down/Collaboration• Communication Channel—

Open/Closed

4. Defining Forms of Compensation

• Direct, Indirect—or Both

• Incent/Reward• Weighting of Measures

2. Designing a Compensation Plan

• Model Type: Bonus or Blended

• Model Focus: Centralized/ Decentralized

• Eligibility

3. DeterminingCompensation Measures

• Measures• Levels of Measurement

5. Delivering theCompensation Model

• Delivery Form, Frequency, Timing

• Delivery Ownership


Conclusion

Questions Facilitator work time www.BattelleforKids.org/Tennessee www.twitter.com/BattelleforKids Thank you!

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Documents

Strategic Compensation Regional Meetings · Reward/incentivize through strategic compensation Help audit/comply with legislative requirements Increase operations management efficiency