Mr. Hassel's presentation is also available as a Power Point file.
And you can also watch CSPN's coverage of the event online.

Introduction

In the contentious debate over American public education, there's one thing everyone seems to agree is vital: great teaching. It's not only intuition that tells us that teachers matter; research shows that teachers have a greater impact on student achievement than any other educational factor. It is time to embrace the logic of this conclusion head on.

During the past decade, efforts to improve public education have made great strides, focusing on accountability, expanded public school choice and charter schools, and a renewed commitment to invest in education. But it is impossible to imagine dramatic improvements in education without dramatic improvements in teaching.

America's teaching force faces substantial challenges. There is wide consensus in education about the importance of improving teaching by:

• enticing more people with high teaching potential to enter the profession, especially in subjects and geographical regions where there is an acute shortage of teachers;
• convincing effective teachers to stay in their classrooms rather than seeking other jobs;
• inducing more great teachers to take on tough assignments -- like teaching the most disadvantaged kids,
• enhancing the capacity of teachers to use practices that are likely to increase student achievement;
• increasing teachers' consistent use of such practices; and
• encouraging or requiring chronically ineffective teachers to leave teaching.

Achieving these goals will require dramatic changes in current education policy and practice with regard to the nation's 2.9 million teachers and those who seek to join their ranks. We need to change the way we prepare, recruit, select, develop, support, and evaluate teachers. In previous reports, PPI has addressed the issues of how we prepare teachers and how we recruit them. We may also have to change the way we design schools, to make them places where good teachers want to work.

It is also essential that we change how we pay teachers. We must pay them more, because without pay that is commensurate with other career opportunities, we will never attract enough of the best and brightest into teaching. But is also clear that we must pay them differently from the way we do now. In addition to better pay, we must move toward a better pay system. We should reward teachers not just for experience, but for the skills, knowledge, and, ultimately, the performance they bring into their classrooms. This goal requires that we rethink teacher pay systems to harness them to drive student achievement.

This paper points to a new bargain to do just that: pay teachers more and tie higher pay to what schools need from teachers to improve student learning. Put another way, we must increase the opportunity that teaching affords teachers, but we must also ask in return that teachers accept more responsibility for results in a more professional and differentiated system of compensation.

A common refrain within the education debates is that unless we pay teachers more, efforts to improve teacher quality will inevitably fall short. They are right. The laws of supply and demand do not stop at the schoolhouse door. Current teacher pay levels do attract talented people to the profession, but not enough of them. Overall teacher income remains too low to attract and retain enough of the high-caliber people knowledge jobs demand.

In 2000, the average U.S. teacher was paid only $41,820 per year, and starting wages averaged only $27,989. At the high end, states like New York, New Jersey, and Connecticut have average salaries of more than $50,000 annually; however, 24 states have average salaries below $37,000. Further, 27 states offer average beginning earnings below $27,000. These starting and average salaries lag behind many other professions. For example, in 2000, graduates with a mathematics background took in an average starting income of $46,744 and those with a chemistry background earned $38,210. Liberal arts graduates started at an average of $36,000 -- more than $8,000 higher than the average starting teaching salary.5 Even accounting for teachers' shorter work year, a disparity exists. In a competitive market, these figures are too low to entice and retain enough talented individuals.

As essential as it is for policymakers to invest in greater teacher pay, it's equally important that we think at the same time about how we pay teachers. The way we typically pay teachers now represents a colossal underutilization of scarce resources and sends the wrong signals to aspiring teachers: Not only do they see low entry-level and mid-career salaries, compared to what their college classmates will earn, the pay system lacks sufficient incentives to reward knowledge and performance. Further, although we spend over $100 billion per year on teacher stipends alone, our current compensation systems are not designed to drive achievement of the teaching quality goals listed above. Even worse, most systems frequently work at cross-purposes with efforts to achieve those aims.

Though there are many exceptions, the vast majority of public school teachers are paid according to a salary schedule that rewards two attributes: years of experience and higher education, such as earning master's degrees. Advanced credentials in education, while certainly a worthy pursuit, do not translate into improved student learning, according to research studies. Teaching experience appears only loosely related to teaching quality, especially beyond the first few years of teaching.

Further, this system affords little flexibility to entice the most desirable candidates into the profession, or to provide special encouragement for the best teachers to stay. It doesn't give school or district officials the flexibility to use pay to attract great teachers to tough assignments or reward exceptional accomplishments, because it rewards teachers without regard to the challenge or results of their teaching. And, coupled with woefully inadequate measures in most communities for effectively helping or removing under-performing teachers, it provides an incentive for ineffective teachers to stay in classrooms by raising pay steadily over a teacher's career regardless of the quality of instruction.

It's time to move beyond a pay method designed early in the last century and to begin building an innovative system that addresses the realities of public schools in the 21st century. Reforms to address these issues -- which at first glance might appear commonsensical but are actually quite controversial -- include:

• providing higher pay or bonuses for teachers who take on tough school assignments;
• paying more to teachers in certain disciplines, such as math and science;
• paying for demonstrated knowledge and skills, rather than only experience and degrees;
• tying rewards to the student learning achieved by a teacher, group of teachers, or school; and
• giving school leaders more authority to set teachers' pay.

There is great resistance in some quarters to ideas that deviate from a pay system based on education and experience. Some concerns about new methods of compensation are well intentioned. Critics worry about fairness, unintended consequences, and whether such proposals are simply ruses to avoid investing more in teacher pay. Other critics, however, fear a loss of institutional leverage if teachers are paid more in accord with other professionals and less like wage earners in a factory or other industrial settings, despite the obvious benefits of these changes for teachers. It is this latter category of critics who damage, rather than enhance, the professional status of teachers and hobble efforts to raise teacher income.

As this paper shows, sound policy demands that we modernize compensation systems for teachers. Teachers should be paid on par with other professionals but also in the same manner as other professionals. In addition, the politics of education finance also demand that reform accompany demands for greater teacher pay. The public thinks teachers are underpaid but that increased compensation should be tied to improved teaching and learning. Teacher-pay reform and salary increases amount to a "grand bargain" for our nation's teachers. The public will invest in raising teachers' income when such hikes are tied to reform goals and results.

It is tempting to suggest that we should replace the current system with a one-size-fits-all approach, but such a change would be unwise for two reasons. First, though schools, districts, and states have toyed with different pay systems over the years, we know very little about "what works" in teacher compensation. For now, we need experimentation; once we learn what works, we'll be better able to make broader recommendations.

Second, even with considerable research, we would be unlikely to arrive at the single best way to compensate instructors. Research in the private sector suggests that for pay systems to support organizational goals, they need to be aligned with the organization's culture and how people are organized to work toward those goals. Though certainly there are common elements of culture and how teachers and staff work together across districts and schools, there is also much variation. We need a pay system that allows leaders to use compensation as one of many tools in alignment with their broader strategies to increase student performance via quality teaching.

As a result, this paper does not advocate a single alternative compensation system. Instead, it lays out the critical design choices and options, discussing the advantages and pitfalls of different designs. It aims to serve as a roadmap for leaders from the schoolhouse to the statehouse interested in redesigning teacher earnings in ways that will increase the quality of instruction.

The following principles should guide the policy dialogue about the design of pay systems:

1. Widespread experimentation. Currently, departures from the conventional pay system are the exception. They should be the norm. Literally every state, district, and school -- not just a select few -- should be trying to improve on the current system of compensation.

2. Flexibility. Alignment is most likely to come about when the people setting pay policy are close enough to "the action" to devise compensation systems that make sense in the context of their overall strategies for improvement. Though state and district policymakers have key roles to play, school-level flexibility (with accountability) should be central to any teacher-pay reform.

3. Fairness and "hold harmless." States and school districts should not reduce the current salaries of teachers to finance these reforms. Rather, the goal should be increased and more effective compensation.

Within these broad recommendations, certain principles should guide thinking about appropriate policies:

• Intense focus on results. Though experiments may take different forms, they should all seek a common goal: to create compensation systems designed to increase student learning by enhancing the quality of teaching. More specifically, they should directly support achievement of one or more of the teaching quality goals listed above.
• Alignment. Policymakers should not consider teacher income in isolation. Compensation policies should be aligned with broader school improvement strategies as well as comprehensive "human resources" policies including organizational design, recruitment, selection, goal setting, professional development, school culture, and evaluation.
• Rigorous documentation. States, districts, and private funders should invest heavily in documenting alternate approaches to compensation and assessing their effects on teacher recruitment, retention, practices, and effectiveness in raising student achievement.

This paper proceeds in six sections. The first makes the case for change in more detail. The second describes the key dimensions of pay policy: what factors drive pay and who sets pay. The next section takes up the first dimension, discussing a variety of potential compensation systems that base pay on different factors. The following section takes up the other dimension, exploring different ways of allocating authority to set pay within the education system. The final section returns to recommendations and conclusions. An appendix designed to serve as a toolkit includes more detailed analysis of design options to guide policymakers as they construct programs. Subsequent PPI papers will examine and propose national and state-level options to support reform in this area.

Blueprint Keywords: Extra Teachers

Bryan C. Hassel is co-director of Public Impact, an education policy consulting firm in North Carolina. For a more complete bio, see the full report.