President Obama has been talking tough on education, especially on the issue of teacher quality and compensation. “The time for holding ourselves accountable is here,” he said at a recent speech to the U.S. Hispanic Chamber of Commerce. ”It’s time to expect more from our students, it’s time to start rewarding good teachers and stop making excuses for bad ones.” Obama and Secretary of Education Arne Duncan have made it clear that they want innovative programs that give teachers the incentive to improve, and they’re willing to help pay for it with funds from the American Recovery and Reinvestment Act.

School officials across the country are heeding that call to action with a commitment to reinventing how teachers are paid. However, getting the topic on the table is one thing, getting the details right is another.

The first step, many officials say, is understanding what options schools have for rewarding their teachers. Here’s a list of what teacher compensation, or “merit pay”, could mean for the teachers in your school:

  1. Pay for performance. These are bonuses based on assessments of student learning.
  2. Hard-to-staff-school pay. This money is given to teachers working in at-risk schools.
  3. Skill-shortage pay. This money is given for teaching subjects that are difficult to staff, such as math, science, technology and special needs.
  4. Advanced-role pay. This is compensation for teachers taking on leadership roles as mentors for other teachers at their school.
  5. Recruitment and retention. This would be a bonus, often in the form of a tax credit for housing, to encourage teachers to stay in the classroom.
  6. Pay for professional development. This money would be given to teachers who complete professional development programs, attain a degree, or seek additional certification.

One of the most controversial merit pay proposals to date is coming out of Washington D.C. Public Schools. District of Columbia schools currently rank as some of the worst schools in the country, and the Chancellor of Public Instruction, Michelle Rhee, is hoping to turn that around with a radical new compensation program that has been met with much resistance.

In the program, teachers could opt for one of two payment tracks. On the green track, teachers would give up the traditional metrics used for giving raises—years in the field and level of education—in place of a new system, where pay hikes would be given based on the results of standardized test scores. On the red track, teachers would not give up those traditional compensation methods, but would receive smaller pay increases. Under Rhee’s plan, teachers on the red track would also be subject to an accelerated dismissal process—giving teachers as little as 90 days to improve student performance on tests.

Teachers in DC are divided in their support of the program, and negotiations have stalled amid threats of court proceedings, arbitration and teacher job actions from the Washington Teacher’s Union. The union says that the program fails to work with teachers, and instead looks to impose mandates on them.

“The jury is still out on whether she’s going to make it,” Barbara Thompson said of Rhee’s compensation plan. Thompson, who heads-up teacher quality and leadership issues for the Education Commission of the States, a nonprofit and nonpartisan organization for state officials that oversee education, said proposals like this scare teachers. “The thought that if their students don’t make it to the level of proficiency required they could be penalized is truly disturbing and frightening for teachers,” she said.

Teachers’ unions across the country will play a role in ensuring that the programs put in place are well thought-out and fair for teachers. Rob Weil, deputy director of educational issues for the American Federation of Teachers, a labor union representing teachers and school personnel, says some of the key factors for fair implementation include:

  • Locally negotiated contracts.
  • Easily understood standards for rewards.
  • Adequate base compensation for all teachers.
  • Consistent funding. This is one of the biggest concerns on the table, because some of the money being used to get these programs going is coming from the economic stimulus package, which runs out in two years. Weil says schools will have to take a hard look at how they plan to fund these programs in the future.
  • Professional development support to help people reach goals.
  • Incentives that are available to all teachers. The concern is that if rewards are tied to a single test score, it puts some teachers at a disadvantage. “That could mean the difference between a student looking out a window during a test,” he said. In addition, Weil says schools should not impose caps on how many teachers will receive bonuses. “You have to develop the system in such a way that people see there is the possibility of them succeeding,” he said.

Bill Raabe, a former teacher and the director of collective bargaining and member advocacy for the National Education Association, the largest teacher’s union in the country, said the bottom line is that teachers have to trust and value the system, and that will only happen if the system looks at everything that’s happening in the classroom, not just student test scores on one particular day. That could include portfolio assessments or classroom evaluations.

But, it might also mean that teachers are given the opportunity to set their own goals. This is the kind of bureaucracy-free approach that Candace Shively, who heads up, an online resource for teachers, would like to see applied. “We need to give teachers the time to sit down and have that reflective process with administrators or other teachers,” the former teacher said. “It’s a reflective process that teachers take on because they want to improve. That’s what makes merit in a teacher.”

Shively also favors building-wide goals and rewards, so that staff members who don’t have classrooms, such as physical education teachers, guidance counselors, and school nurses, have a stake in a school’s success. “No parent would want a program that eliminates those people, and no parent would want to take those things away from their kids,” she said.

When it comes to teacher dismissal, Weil, Raabe and Shively agree with President Obama’s stance: if a teacher continually fails to improve their teaching practices, that teacher should be shown the door--but, says Raabe, only after some kind of notice and fair process. “You have to provide the opportunities, skills, professional development to be successful,” he said.

One of the issues complicating implementation is that there is little data out there on whether these programs will work because many of the programs right now are so new. “People who claim that this is the best thing since sliced bread are basing that on opinion, not data,” Raabe said. The challenge won’t just be in gathering data, but making sure it’s accurate. Hopefully, the $44 billion in stimulus aid to establish teacher-quality reporting requirements for states and districts will help the cause.

And the cause is spreading. Here are some examples of states and districts working to develop and implement teacher compensation programs:

Denver, Colorado
Since 2008, Denver teachers have been working with a contract that includes a groundbreaking pay-for-performance program called ProComp where teachers receive bonuses for working in hard to staff schools, filling hard to staff assignments (such as middle school math and special education) completing professional development units, achieving a graduate degree or advanced license, earning a satisfactory evaluation, achieving student growth objectives, and exemplary performance on tests, among other factors.

Though the state’s Department of Education worked to push legislation for merit pay in 2008, the bill failed to pass by two votes. Melissa McGrath, spokeswoman for the Idaho State Department of Education, said the state teachers’ union was concerned that student achievement would be measured by standardized test results. The department has continued to meet with teacher union representatives in hopes of getting another version of a pay-for-performance system off the ground in 2010. “We’re really excited to hear both President Obama and Secretary Duncan talk about education reforms such as pay-for-performance because that’s something we’ve been wanting to implement.”

In spring of 2009, Representative Brain Bolduc tried to ban tying teacher pay to standardized tests in the state of Maine. "Judging a teacher on test scores of students is like judging a doctor by how healthy patients are," Bolduc said. "In addition, using test scores will force teachers to just teach test material rather than focus on the larger, more well-rounded curriculum." The bill was voted down. His colleagues in the state senate didn’t want to throw merit pay out with the bath water—partly because they know some stimulus funds are tied to the implentation of merit pay programs. "I would not want us to have something in law that would jeopardize our ability to receive stimulus funds," Maine Education Commissioner Susan Gendron told legislators.

Toledo, Ohio
The city’s teacher compensation program, called TRACS, began in 2004. Teachers apply for a 5% bonus to their salary, and are assessed based on a classroom evaluation, a writing sample, and a portfolio. They are then tasked with helping the district on special projects, such as curriculum instruction. If a TRACS teacher accepts a position at a high-needs school, they receive a 15% pay increase.

In 2001, Hamilton County Schools received a $7 million grant to assist nine of its lowest-performing schools. Among the reforms created with this money was a bonus plan for teachers that turned out to be such a success, it was expanded throughout the entire state of Tennessee with federal dollars. The program, called “differentiated pay,” is based on student gain on reading and math scores over the course of one year. It also includes “team bonuses” for schools that show growth on test scores, so that every certified teacher on the staff gets a pat on the back in the form of up to $2,000 bonuses for teachers and $5,000 for principles. Susan Swanson, director of urban education for the district, said test scores have gone up every year since they started the program. “The recognition is probably more important than the money for most of these folks, and it has a tremendous effect on a school when they’re showing movement and growth,” she said.

Minneapolis, Minnesota
The Q Comp program began in 2005. It is optional, but Kristie Anderson, Q Comp specialist for the state's Division for School Improvement, said 71 districts are currently using the program Every district in the state is allowed to develop its own program, but all focus on giving cash incentives for student wide gains on standardized assessments, in addition to classroom and school-wide goals. The program also gives teachers bonuses for sharing expertise with other teachers to help improve student achievement.

Every school district will be taking its own approach—borrowing ideas from successful programs, and coming up with goals based on the unique challenges their schools face. But teacher compensation in some form will most likely be an article on your local school board’s agenda this year. Merit pay, at least under this administration, is not a passing fad, but is considered an essential component of school reform.