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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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
Presenter
Tony Bagshaw Managing Director of Human [email protected]/BattelleforKids(513) 303–5652
© 2011, Battelle for Kids.
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
© 2011, 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
© 2011, Battelle for Kids.
What is Strategic Compensation?
The strategic alignment of desired organizational goals
and compensation
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
Everyone Wants to Pay Teachers More…
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
Motivational Theory
Altruism BehaviorismSt
rate
gic
Com
pens
atio
n
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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)
© 2011, Battelle for Kids.
The End Goal
Shifting the Distribution of Educator Effectiveness
© 2011, Battelle for Kids.
15-Minute Break
© 2011, Battelle for Kids.
Current News and Research on Strategic Compensation
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
Data, Metrics, and Measures
© 2011, Battelle for Kids.
How Can Data Help Us?
By showing what really is…
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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.
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
Working Lunch Activity Answers
TBD
© 2011, Battelle for Kids.
National Strategic Compensation Models
© 2011, Battelle for Kids.
Strategic Compensation Model Examples
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
Recognize Excellence—Performance Pay
© 2011, Battelle for Kids.
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)
© 2011, Battelle for Kids.
Denver ProComp
© 2011, Battelle for Kids.
Washington, D.C.—IMPACT
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
Eagle County, Colorado
© 2011, Battelle for Kids.
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.
© 2011, Battelle for Kids.
Longview Award Model—A Performance Standard
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
Strategic Compensation ’09/’10
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
© 2011, Battelle for Kids.
Strategic Compensation ’09/’10
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
© 2011, Battelle for Kids.
Strategic Compensation ’09/’10
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
© 2011, Battelle for Kids.
Strategic Compensation ’09/’10
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%
© 2011, Battelle for Kids.
Strategic Compensation ’09/’10
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
© 2011, Battelle for Kids.
Strategic Compensation ’09/’10
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
© 2011, Battelle for Kids.
Exploring Strategic Compensation with 5D
© 2011, Battelle for Kids.
Strategic Compensation Design Lifecycle
© 2011, Battelle for Kids.
Lifecycle
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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.
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
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
© 2011, Battelle for Kids.
Conclusion
Questions Facilitator work time www.BattelleforKids.org/Tennessee www.twitter.com/BattelleforKids Thank you!