Changing the Rules of the Game

Louise Larson’s credentials include a license to teach both art and elementary school, a master’s degree, and eight years of classroom experience. But for the next five minutes, all that matters for the 4th grade teacher is whether she can switch from a math lesson to a group social studies project without losing control of her students.

The scene unfolds under the watchful eye of Suzanne Llamas, who has just slipped into Larson’s classroom here at Vaughn Next Century Learning Center, a pre-K-5 charter school in an impoverished section of Los Angeles known as Pacoima. A 4th grade teacher herself, Llamas today is playing the role of “peer evaluator.” Under the school’s innovative performance- based pay system, Llamas’ judgment will not only figure into her colleague’s job review, but also in how much she gets paid.

The transition in lessons comes off without a hitch. At her cue, Larson’s 20 pupils push their desks into clusters, gather up construction materials, and set to work building models of the Spanish-style missions they’ve been reading about in class. Llamas makes note of the smooth orchestration on a white legal pad before slipping out of the room.

Ultimately, this skillful demonstration could help Larson earn $200 in bonuses that Vaughn Learning Center has tied to classroom management and lesson-planning ability. While that alone isn’t much, the total amount of additional pay she could earn adds up quickly once all the other skills her school gives bonuses for are factored in. In fact, if Larson aces every part of Vaughn’s evaluation, the 48-year-old educator stands to rake in more than $13,000 in bonuses above her $35,500 salary this year.

“This is a more accurate reflection of what I am doing,” says Larson, a fan of the program. “It addresses me as an individual far more than a standard pay scale could.”

Although Vaughn’s 2-year-old compensation system remains on the cutting edge, the long-debated idea of linking educators’ pay to their performance has been gaining currency nationwide. The concept won a strong endorsement at last year’s National Education Summit in Palisades, N.Y., and variations of new pay schemes are starting to be embraced by a handful of big- city districts, most recently Cincinnati. Moreover, a statewide pay-for- performance proposal is expected to be unveiled soon in Iowa, and the National Education Association is likely to consider resolutions on the issue at its annual meeting next month.

Yvonne Chan, Vaughn’s charismatic and sometimes controversial principal, isn’t surprised by this interest. Though the new pay plan has generated some dissension at her school—especially among more veteran staff members—she says performance-based pay is an idea whose time has come. Today’s tight labor market is pressuring schools to raise salaries, but policymakers also seem unwilling to allocate more money without ensuring a return on the investment.

“I think it will fly in five years,” Chan says of the approach. “It has to. The public is not going to stand for the status quo. And this is what they see as accountability.”

For the most part, teacher-compensation systems today remain much as they have been for the past half-century. Set salary scales automatically reward teachers for years of experience and for completing additional coursework. While the system ensures an element of objectivity that protects against favoritism, critics argue that it offers little incentive for improvement, and that the extra courses often fail to translate into better teaching.

In the 1980s, a few states and school systems experimented with “merit pay” and “career ladder” programs, which rewarded teachers financially based on performance reviews and their willingness to take on additional responsibilities. But most of those initiatives fell victim to claims by teachers’ unions that the reviews depended too much on the whims of administrators, and that the number of teachers who could earn the extra pay often was limited by quotas or inadequate funding levels.

“The attempts of the past didn’t work because they singled out individual teachers, and they usually didn’t have very clear criteria,” says Allan Odden, a school finance expert at the University of Wisconsin- Madison. “So the teachers couldn’t answer the question: ‘What do I need to do next year to get it, and what evidence do I need to demonstrate that?’ ”

Odden directs the Teacher Compensation Project for the Consortium for Policy Research in Education, a federally financed research venture that brings together five leading universities. The consortium gave advice to Vaughn Learning Center as it constructed its pay system and is involved in a multiyear study of its implementation. The series of incentives the school ultimately put together is complex, and was designed to avoid the kind of pitfalls that undermined earlier attempts to link pay to performance.

Teachers and administrators receive $1,500 bonuses if Vaughn meets certain schoolwide student-achievement goals. (Non-certificated staff members at the school receive $1,200, and the bonus is prorated for part-time workers.) Last year, Vaughn successfully met its objective of raising overall scores on the state’s assessments by at least 3 percentage points. This year, the schoolwide goals have been linked to gains made in California’s new accountability system, which ranks schools based on their performance.

Individual teachers at Vaughn also get smaller “contingency” bonuses of $250 for achieving goals in such areas as student attendance and parental involvement.

But the school has invested the most in the way it rewards individual teachers for their own abilities. Each semester, educators can earn several thousand dollars above their base pay by demonstrating their skill in such areas as lesson planning, literacy instruction, and use of technology.

Observations carried out four times a year by an administrator and another teacher determine who gets the awards, although teachers also rate themselves, and their assessment of their own skills carries a third of the weight in figuring their final score. The teachers at each grade level pick two of their colleagues to serve as the peer evaluators.

The phase-in of the new compensation system began last school year, when all new hires were required to take part, and those who had been at Vaughn for five years or less were given the chance to opt in. In all, 18 educators—a little less than a third of the teaching staff—wound up participating. When the program was opened to everyone this year, only 19 of the school’s 73 teachers chose to remain on the single salary scale.

One of the new recruits last year was 39-year-old teacher Paul Johnson, who decided to go into education after working several years in retail management. But maintaining control of his 5th grade classroom was a struggle for the first- year teacher, and he failed to earn any of the individual bonuses tied to skills.

By May of last year, discipline in his classroom had gotten so bad that he was pulled from his class and given about six weeks of intensive professional development. While another teacher covered his class, Johnson co- taught with more experienced teachers to learn the ins and outs of classroom management. He now credits the peer-evaluation process Vaughn uses to determine who gets its bonuses with helping him to get much of the support he needed.

“If they had fired me, I would have understood,” says Johnson, who is now teaching 4th grade. “But they didn’t. They helped me out.”

This year, his classroom is far more structured, and he’s got the money to prove it. In the fall, he earned $1,550 in bonuses, and he’s confident he’ll get at least the same amount this summer. Vaughn hands out its awards twice a year.

Says Johnson: “I felt proud about myself because I knew I’d earned it.”

Of the handful of somewhat more experienced people who signed up the first year, many say the decision was a no-brainer. Teachers added up all the extra money they could earn if they managed a realistic score, and saw they could be making significantly more than they would under the traditional salary schedule. Susie Oblad, a 4th grade teacher who’s been at Vaughn since 1993, says: “It’s all stuff I’m already doing, so I figured ‘Why not?’ ”

But philosophical reasons also played a part. Second grade teacher Karen Schwarz says she felt a moral obligation to accept the heightened accountability brought by the new compensation system, especially given the great challenges faced by the students at Vaughn, which serves one of the area’s poorest communities.

Nearly all of the school’s students are poor enough to qualify for free or reduced-price lunches, and fewer than 13 percent are proficient in English. About 94 percent of the school’s students are Hispanic, and 6 percent are African-American. Many of Pacoima’s residents are packed into backyard trailers and garages. Vaughn serves about 1,200 elementary students on a sprawling campus of permanent buildings and portable units.

“I see it as a civil rights issue,” Schwarz, who has been at Vaughn for six years, says of her participation in the pay system. “The reason why I did it is that I’m really concerned about these kids, and they need a better education. If they’re ever going to get out of poverty, we have to do better. We have to have a carrot and a stick.”

Yvonne Chan sees no reason why performance-based pay can’t become the norm throughout the field, but her school clearly benefits from several factors that have made it easier to adopt such drastic change. Though sometimes criticized as headstrong, the Chinese-born principal enjoys significant support from her teachers, and her school prides itself on its tradition of experimentation.

Chan took over at the school in 1990, when morale there had hit rock bottom, and quickly endeared herself to her staff as she secured funding for long-needed facilities improvements and rallied community leaders to combat the neighborhood’s thriving drug market. Her frequent railings against educational bureaucracy— which she often takes to the press—have occasionally raised the ire of some district leaders, but many of her teachers say they feel lucky to have her on their side.

With a core group of teachers leading the push, Vaughn broke free of the Los Angeles Unified School District in 1993 by converting to charter status, becoming one of the first such publicly funded, but largely independent, schools in California. Since then, Vaughn has added an extended- year program, mainstreamed all special education students into regular classes, and—through budgetary efficiencies—reduced class sizes at all grade levels to no more than 20.

As a charter school, Vaughn has gained the flexibility to allocate its budget largely as it sees fit. As a result, the school faced little in the way of bureaucratic barriers when it decided to set aside money for the new bonus system, the budget for which now stands at $323,400 a year.

“I wouldn’t say we’re a rebel school,” Oblad says. “But we are very independent. We’re not led by anybody, and we’re generally mistrusting of anybody telling us what to do.”

Vaughn also has no collective bargaining. Although some labor leaders elsewhere have begun to express willingness to consider new compensation policies, performance-based pay has received a generally cool reception from both United Teachers Los Angeles—which is affiliated with both the National Education Association and the American Federation of Teachers—and the NEA-affiliated California Teachers Association.

Despite the school’s willingness to innovate, launching the pay plan was not painless. Chan says two teachers are leaving as a result, and some hurt feelings persist among those who remain. Few at Vaughn were opposed outright to the idea of linking pay to performance, but the way the plan was designed ruffled some feathers. Some teachers believed that only administrators—not their classroom colleagues—should have a voice in determining teachers’ salaries.

“This pits teacher against teacher,” says one Vaughn staff member, who would speak only anonymously. “I have no problem with teachers evaluating teachers, but pay should not be part of the equation. This allows for favoritism, and I have known of teachers who give other teachers high marks because they’re friends.”

A survey the Consortium for Policy Research in Education carried out at the school last summer showed 67 percent of Vaughn’s teachers agreeing that “the controversy about performance pay has hurt morale.” In part, the concerns reflected the fact that Vaughn dove head-first into its new pay system before fully developing an evaluation instrument. The result was confusion among the first cohort of participants about how they would be judged.

Some of those problems have been addressed. While evaluators last year were given only brief descriptions of what to look for—sometimes little more than one sentence for each skill—the school has since drafted a sophisticated set of evaluation “rubrics” based largely on the work of Charlotte Danielson, the author of the influential 1996 book Enhancing Professional Practice: A Framework for Teaching. The extensive matrix presents a vision of what effective teaching looks like, and it describes the difference between unsatisfactory, basic, proficient, and exemplary ability for each skill. Evaluators meet with teachers both before and after their observations to offer advice.

“This not only gives me the opportunity to earn more money,” says Larson, the 4th grade teacher who recently was observed, “but it’s also very clear-cut about what’s expected of me. So often in teaching you get evaluated, but you don’t get much feedback. This lets me set my goals and attain them.”

Other staff members argue that the new approach is simply more fair because it reflects effort put forth in the classroom.

“Before, everyone knew who the few bad apples were,” says Anita Zepeda, an instructional coordinator who supervises 4th and 5th grade teachers at Vaughn. “And it was a shame that they could make more sometimes than someone newer who was working very hard.”

Another key to building trust was putting into place a performance- based pay system for administrators, all of whom are now evaluated each semester by their peers—including both teachers and other administrators. In fact, every Vaughn staff member gets to score Chan’s performance. “I have to go on performance pay,” she says. “If I don’t go, no one goes.”

Last fall, the principal earned a rating of 3.46 on the system’s 4-point scale—a score that could raise her salary from $81,000 to $108,000 this year. (Under the old scheme, it would have been $102,000.) About the only thing she got marked down for was her propensity for one-way communication. Chan agrees with that assessment. “My main thing is that, after all, I don’t listen to others,” she says. “I dictate.”

Vaughn paid out $46,650 in both contingency awards and bonuses for knowledge and skills last year. All but three of the 18 teachers who took part received some additional pay; their individual takes ranged from just a couple hundred dollars to about $4,000.

Last fall, after the program was opened to everyone at the school, Vaughn paid out a total of $107,000 in bonuses for the first semester. Teachers will learn in the next few weeks how they did in the latest round of evaluations.

Still a major sticking point is how the plan affects the school’s most experienced educators, who had the option of joining the system this school year.

The problem is that many veteran teachers have racked up far more credit for additional coursework and training than is recognized under the performance-based pay scheme. The new plan does pay teachers extra for earning enough credit to become fully licensed by the state and for earning a master’s degree or the equivalent. But beyond that, additional coursework doesn’t automatically translate into higher pay.

The base salary of a teacher with 10 years’ experience would actually increase from about $41,000 to $44,000 if she moved from the old system to the new one. But if she also had accumulated 98 credits worth of coursework and other training, the single salary schedule would have boosted her income to nearly $57,000. Under the performance-based system, she could make more than $60,000, but only if she earned stellar marks in her evaluations. If she scored poorly, her final take could be as little as $47,000.

As a result, some of the most senior faculty members believe they have the most to lose—and the least to gain—by switching to the new system.

“The veterans feel they are not honored,” says Diane McDermott, a 4th grade teacher who’s been at Vaughn for six of her 37 years in the profession. “For the mortgage payment to depend on what my mood is or what my health is on the day I’m visited—that is scary.”

The school’s budget committee—made up mostly of teachers—has begun discussing ways to make the new compensation system more attractive to experienced staff members. However the plan is improved, though, Chan believes it must retain some risk for those veterans if it is to create an incentive to improve. Base pay, she says, shouldn’t reflect anything more than minimum performance: “The school culture has to make sure everyone is accountable.”

Some senior educators did venture out into the uncharted waters of the new pay plan this year. One was 5th grade teacher Carol Howard, a 30- year veteran who helped write Vaughn’s charter. Howard’s biggest concern was that the evaluation process be nuanced enough to pick up on the varied teaching techniques she uses in her class, which includes special education and limited- English-proficient students. But her fears were allayed when she was assigned two colleagues well-trained in special education as her evaluators.

“It was a good experience,” Howard says. “It was positive reinforcement for the good things I was doing, and it makes you want to do more. We want that from our students, so it’s nice to do that with the teachers.”

While many teachers at the school are quick to say they wouldn’t have gone into the profession if they were motivated primarily by money, some say the new pay policy has changed their behavior.

Susie Oblad says that when she failed last fall to earn a $400 bonus for teaching science, she was pushed to do better this semester. Using a unit of instruction she learned about at a workshop last year, this spring she taught her 4th graders about the food chain by having them dissect a regurgitated owl pellet. The dissection turned up not just what the owl had eaten, but also what its prey had consumed.

“I taught incredible science this semester,” Oblad says. “I know the bonus isn’t much, but I have an ego that says those dollars are attached to success, and that motivates me.”

The new compensation system also is attracting new recruits. Teacher Paul Hannosh says the plan was “the number-one” reason he applied to Vaughn, where he starts work this summer. But Hannosh, who has taught in Los Angeles Unified for three years, says it wasn’t just the prospect of earning more money that drew him, but also the idea of working at a school that rewarded educators for their skills, instead of just for their seat time.

“The education profession needs to have some kind of incentive and motivation,” he argues. “I don’t believe all teachers are equal, and good teachers need to be compensated.”

Whether the changes brought on by the new plan translate into sustained improvement in student performance remains to be seen.

Last year, Vaughn Learning Center raised its average score on the state’s assessments by 4.5 percentage points— enough for employees to win their schoolwide bonuses—but the accountability system California now uses to rank all of its schools still rates Vaughn as a one on its 10-point scale. When compared only to schools serving students with similar socioeconomic backgrounds, Vaughn was ranked by the state as a three.

Chan argues that the state undercounted the number of poor students at her school when calculating the comparison ranking, and she points out that Vaughn includes nearly all of its special education students when it administers state tests, making it harder for the school to show overall improvement. But the principal is confident that Vaughn’s compensation system is focused on what’s needed, and, given more time, will show more impressive results.

“We believe,” she says, “that the improvement in skills and knowledge precedes the improvement in test scores.”