There has been much discussion regarding the concept of “merit pay” for teachers recently.  Indeed, during the recent presidential election the subject was touched upon and touted (to some extent) by both major candidates.  Based upon this, many people have come to believe that merit pay and/or pay for performance is a concept which has developed only recently.

On the contrary, the idea of basing salaries on something besides the normal salary guide model is not new or novel.  This concept has been discussed for many years.  Indeed, PERC heard a case involving issues of merit pay in 1980 in the educational setting in 1980.   See Hanover Park Regional, PERC No 80-105 (Feb 21, 1980).  In fact, in the education context, merit type pay is not uncommon in the administrator context.  These include “annual monetary incentives that are granted above the base pay for meeting specific criteria. They do not become part of the contracted base pay.”    Thus, “merit pay” is not a new concept, but one which has a long history in New Jersey.

There are a few things which must be kept in mind regarding “merit pay”.  First, any Board considering such a concept must be aware that this is a negotiable topic, meaning that the teacher”s bargaining unit must agree before it can be implemented.    See Manalapan-Englishtown Regional.

Second, “merit pay” is a generic term, and has taken on many variations in the places it has been implemented.   It includes such things as pay for performance, value added assessment, career ladders and bonus pay.   While there is no one-size fits all plan or model, all have the same stated goal, namely to improve education of students.

School districts which have instituted merit pay throughout the country have done so through a variety of plans and programs.  One of the more discussed plans is Denver, Colorado, where its voters in 2005 approved a $25 million funding boost in teacher pay.  Under the plan, which was designed in cooperation with the teacher”s union, one of the factors which can increase a teacher”s pay is the additional coursework and advanced degrees received by the teacher.  (Note that this type of “performance pay” already exists in many contracts in New Jersey due to the horizontal educational columns on the salary guide.)

In San Francisco, a new plan is being implemented which provides increased compensation is based upon the extra duty for teachers and assignment to a hard to staff school.  This is a newly implement plan, which has not produced sufficient data or analysis as of yet.

In New York, two districts have “merit pay” type plans which are akin to a penalty for not achieving certain goals rather than as reward or bonus for exceptional service.  First, in Johnsburg, teachers must achieve certain performance criteria or .5% of their salary is withheld.  Similarly, in East Irondequoit a teacher does not receive his salary increase if he/she has two deficiencies in “teacher performance” and two deficiencies in “professional performance goals” during the annual review, but can make up the lost pay if the deficiencies are resolved in the next evaluation.  Keep in mind that in New Jersey a Board already has the right to withhold a teacher”s increment based upon evaluative reasons.

Another place where “merit pay” has been instituted is Arkansas, where a pilot achievement program to “restructure the teacher profession pay system” was initiated.  The plan was passed by the legislature in 2007 and has been implemented in at least two districts.  The plan provides that that 40%-60% of a teacher”s total compensation shall be paid based upon aRewarding Excellence in Achievement plan that considers “output factors such as teacher evaluation and student performance in the teacher”s class or in the teacher”s school.”  The 40%-60% will be determined by, among other things: student achievement on statewide tests; student achievement on locally administered standardized tests; objective evaluation by school principal; and peer objective evaluation using multiple criteria. Interestingly, Little Rock Arkansas has implemented its own “merit pay” program which was privately initiated and funded.

In short, “merit pay” is not novel, and has taken many forms.  While the possibilities and details of any plan are endless, the implementation of a program is limited not only by the available funding and negotiations with the teachers” union to accept same, but also upon the ability of the Board to create a plan which meets its goals.  Additionally, Supervisors who may be evaluating the employee for his/her merit increase must buy into the plan if it is to be successful.  Indeed, any plan which is developed must be centered upon and tailored to meet the Board”s goals and need, and should be carefully reviewed to determine that what the Board is trying to achieve is necessary and prudent for the operation of the district.

What follows are various resources which may contain information relative to the concepts of merit pay and other forms of teacher compensation.

NJSBA, Labor Relations – Teacher Salaries: Alternative Approaches

Education Commission of the States (Overview of Denver plan)

Pay-for –Performance Teacher Compensation: An Inside View of Denver”s Pro-Camp Plan, Phil Gonring, Paul Teske and Brad Jupp, (Harvard Education Press)

Education Sector (Non-partisan, non-profit organization)

Gutherie, J.W. & Prince, C.D., Paying For and Sustaining a Performance-Based Compensation System. Center for Educator Compensation Reform. U.S. Department of Education, Office of Elementary and Secondary Education, Washington, D.C., 2008.  or

Holland, R. Merit Pay for Teachers: Can Common Sense Come to Public Education.  Lexington Institute. Arlington, VA, 2005.