Larry Cobler, president of the Dexter Community Schools Board of Education, joins in the question-and-answer session during a merit pay forum in Livonia. Hosted by the Mackinac Center for Public Policy, the forum introduced the concept of a privately funded merit pay pilot project.

At least one Michigan school district has adopted a merit pay proposal for teachers and others who attended a merit pay forum this month expressed interest in joining a pilot project.

“I challenge the rest of you to take up the torch. We are excited,” Superintendent Christine Beardsley of Oscoda Area Schools told attendees at the Livonia event.

Beardsley was one of more than 40 representatives from private and public schools at the education forum, titled "A Merit-Pay Pilot Program for Michigan Public Schools," sponsored by the Mackinac Center for Public Policy. Forum speakers outlined a team approach to merit pay that would reward educators for their students’ academic improvement.

Tom Watkins
Speaking at the forum, Tom Watkins said that some private foundations are looking for effective ways to enhance education in Michigan and elsewhere. Watkins is the former Michigan state superintendent of public instruction.

The Mackinac Center publishes Michigan Education Report.

Oscoda is a rarity in conventional public education, according to forum speakers. While research shows that teacher quality is a major factor in student achievement, teachers generally are not paid on the basis of student performance, according to Patrick J. Wright, the Mackinac Center’s senior legal analyst.

Instead, nearly all conventional public school teachers in Michigan are paid according to their years of experience and level of education. But advanced degrees and years in the classroom have not been shown, generally, to significantly improve a teacher’s ability to raise student achievement, Wright said, with two exceptions: Studies show that teachers do tend to become more effective during their first five years on the job, and teachers with master’s degrees in math and science may produce slightly better student test results.

Merit pay programs compensate teachers for the academic growth that their students show, regardless of the teacher’s experience or education, said Matthew Carr, education policy director at the Buckeye Institute for Public Policy Solutions in Ohio and another forum speaker.

Well-designed merit pay programs attract and retain good teachers, he said, and spur improvement among lower-performing educators.

“There is significant and growing evidence that merit pay is effective,” Carr said. The Mackinac Center has suggested a pilot merit pay program that would not eliminate the traditional salary schedule, but would add compensation on top of it for student achievement. “A Merit-Pay Pilot Program for Michigan Schools” describes existing efforts in other states and outlines a plan in which Michigan schools would partner with private foundations for funding. The district, its employees and the foundation would collaborate on details.

“What we have here is an opportunity to find districts that want to do this and marry them to foundations,” said forum speaker Tom Watkins, former Michigan state superintendent of public instruction.

The Oscoda proposal, developed independently and already written into the district’s collective bargaining agreement, will reward teachers primarily on the basis of meeting academic targets at the student and classroom level, with a smaller emphasis on building-level achievement and evidence of parent-teacher interaction. The plan also rewards non-core teachers, administrators and support staff according to criteria set for each of those groups.

“We set aside $25,000,” Beardsley said. The district is interested in working with a foundation partner in order to increase the dollar amount, but otherwise will move ahead on its own, she said. The Mackinac Center proposal suggests added compensation ranging from $3,000 to $10,000 per year per individual.

Successful merit pay plans have five characteristics, Carr said: transparency, teacher input, significant financial rewards, a collaborative school climate and objective measures of student achievement.

Teachers should understand and have a say in the plan as it is developed, he said, including an understanding of what is expected and how their performance will be evaluated.

Oscoda teacher Matthew Hinckley, who attended the forum, said his fellow educators would not support a merit plan that singles out individual teachers as the cause of strong or weak performance, given the varied factors that feed into student achievement. That is one reason why Oscoda’s plan is based on individual student achievement, but also on classroom-wide and building-wide progress.

“The kids are a major X factor,” Hinckley said, referring to students’ varied academic ability. Another factor is teaching assignments. Merit pay would work best if teachers – knowing their own skills – have some input on where and what they teach, said Hinckley, a biology teacher and the chief negotiator for the Oscoda Education Association.

He agreed that new, growth-model assessment tests could alleviate some of those concerns.

Most merit plans use a pre- and post-test system to measure student achievement. The pre-test predicts how much academic growth can be expected of a student in a school year, given his or her past performance, special needs and demographic factors. The post-test compares that prediction to actual academic growth.

There is a critical tradeoff in such systems, Carr said. The assessment process must be detailed enough to measure accurately, but not so complex that teachers and administrators mistrust the results.

To address the idea that merit pay is “not fair” to other employees who also contribute to learning, the pilot plan suggests that a wide range of school personnel participate. The largest amounts would go to core subject teachers, but smaller amounts would be reserved for administrators, support staff and teacher aides for reaching achievement targets.

“This isn’t The plan, capital T, but a plan that should be molded to local context,” Carr said.

Several other forum attendees also showed interest in merit pay programs, including a member of the Detroit Public Schools Board of Education.

“Why lose teachers who are frustrated?” Annie Carter told Michigan Education Report after the forum. “Give them a raise, but give them merit pay.”

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Questions and comments

A number of questions and comments followed the speakers’ presentation, among them:

Q. How would merit pay be treated for tax purposes?

A. If funded privately and paid directly to the individual from a foundation, the money likely would be treated as self-employment income and the recipient would be required to pay self-employment tax. Conversely, the payments would not be considered part of the public employee’s salary and so would not be factored into retirement calculations or the district’s costs for such things as workers’ compensation.

Q. Does workplace quality improve under merit pay plans?

A. Some critics of merit pay say it fosters unwelcome competition among teachers. That does not appear to be the case when the plan offers incentives to all employees who positively affect student learning. Teachers in Arkansas reported more cooperation and higher satisfaction levels in the Achievement Challenge Pilot Project.

Q. Why add merit pay instead of revising the single-salary schedule?

A. Teacher buy-in is a necessary component of merit pay. Imposing a change in traditional pay schedules would likely bring about resistance from teachers and teacher unions and potential legal complications. Some collective bargaining agreements specifically rule out the use of standardized testing as part of a teacher’s evaluation. The Michigan Teacher Tenure Act also contains provisions protecting teacher compensation. A well-designed pilot project, in particular one that is privately funded, would serve to introduce the concept in a collaborative way as well as reassure teachers that their participation would not involve any loss of income.

Q. How does merit pay address the disparity in student ability?

A. Student testing can take into consideration a wide range of demographic and academic factors for each student, ranging from their past academic performance to their free- or reduced-lunch status. The Northwest Evaluation Association, for example, has aligned its exams in Michigan with the state’s own content expectations.

Q. What about rewarding school principals?

A. Merit pay needs to be “fair,” but the concept of fair may vary from district to district. Some districts put more weight on classroom teachers than school leadership, but others may not.

Q. What happens when foundation funding runs out?

A. Ideally, a pilot project in any given setting would be funded long enough to prove whether it results in higher student achievement, year over year, and why. Those results will lay the groundwork for discussion about changes in traditional teacher compensation.

Q. Are there examples of successful merit pay programs?

A. The Mackinac Center policy brief, “A Merit-Pay Pilot Program for Michigan Public Schools,” discusses the results, strengths and weaknesses of merit pay programs in Arkansas, Chicago and Denver.