EPI Series on Alternative Teacher Compensation Systems No. 2

The Economic Policy Institute Series on Alternative Teacher Compensation Systems is motivated by the need to bring expert analysis to the debate over performance-based pay in America’s public schools. Redesigning Teacher Pay—the second volume in our series—provides a simple framework for designing and evaluating performance pay plans for teachers. Using this framework, authors Susan Moore Johnson and John P. Papay propose a simple, yet powerful plan for reforming compensation for the next generation of teachers.

Design is critical to the success of any pay system. But local context and implementation are equally important. Complementing its theoretical analysis, this volume offers four case studies of performance pay in action, from Houston, Minneapolis, Charlotte, and Hillsborough County, Florida. These districts have been at the forefront of teacher pay reform, and their strategies are as different as they are alike. Notably, none rely on a single test-score based measure of performance.

Johnson and Papay’s proposal, dubbed the “Tiered Pay-and-Career Structure,” is an integrated strategy for developing human capital in teaching. Their plan, designed to attract strong candidates, develop instructional skills, and to provide higher pay and career opportunities to those who perform well, will fundamentally change how districts recruit, assess, compensate, and develop teachers.