COMPENSATION REFORM:
ISSUES IN DESIGN AND IMPLEMENTATION

The Community Training and Assistance Center (CTAC) has an exemplary national track record in advancing compensation and systemic reform. We have successfully built the capacity of districts, states and communities to develop and implement reforms that meet their specific needs. This includes some of the most notable successes in the history of alternative compensation, including Denver, Colorado where the traditional salary schedule is being entirely replaced.

While compensation reform has taken different forms in different areas of the country, the overall process for successful change has some consistent hallmarks. For example, our experience in Denver underscores the critical importance of aligning district systems and structures in support of schools and classrooms. Our experience in Christina, Delaware demonstrates the impact of broad-based community involvement in a district historically divided along racial lines. Rather than offer models for replication, our experience will provide a national knowledge base that will enable the task force to choose the most strategic and appropriate directions for the district.

The value of the quality and depth of our experience is in helping districts customize a compensation plan that builds on the district's strengths and aligns with district goals, while learning from the efforts of others. A related significant benefit is that it will enable the district to gain foreknowledge of what will be important later to help structure the early decisions, and to use that knowledge to advance the district’s reform agenda. Field-proven experience teaches what comes next, what pitfalls to avoid, and what types of measures can enhance the prospects and sustainability of success in a large school district.

There are several cornerstone considerations that significantly affect the development and implementation of a strategic compensation plan. National experience shows that how these considerations are valued and weighed can significantly influence the prospects for success of any overall compensation reform. The most critical considerations include:

Each of these considerations is discussed in further detail below.

Systemic Reform

The national lesson of compensation reform is a lesson of institutional change. As evidenced in Denver and emerging practices elsewhere, strategic compensation can be a major trigger for positive change and improved student achievement – if the initiative also addresses the district factors that shape the schools. In this context, strategic compensation is miscast if viewed as a financial or programmatic reform. It is in fact a systemic reform. This understanding has implications for both the development and implementation of the compensation plan.

Compensation reform is best accomplished when it is done with people, not to them. Compensation changes that work to the benefit of students, teachers and principals need to be crafted based on local needs, organizational capabilities and realistic financial projections.

Reaching the goal of successful implementation requires a focus on organizational alignment. A pivotal challenge is to make the system function as systematically as possible on behalf of schools and classrooms. Building on the district’s current strengths and major initiatives, this requires aligning the district’s standards, instructional delivery, professional development, data capacity, assessment, and supervisory, financial and human resources systems in support of the plan. The issue of alignment reaches far beyond organizational structures.  It cuts to the very essence of how – and to what extent – the school district is functioning in helping all schools and practitioners to be effective as the plan is implemented.

The Pilot

The nature of a pilot is experimentation. The pilot will provide the field testing needed to introduce key elements of the plan, build organizational capacity to support implementation and provide the vehicle for assessing results.

The development of the pilot will parallel and be influenced by the development of the compensation plan. This has significant implications for phase one. The task force will need to identify the elements of the pilot and, concurrently, determine how the pilot will be supported, with what level of monitoring and with what level of priority and accountability within district departments.

Scale and Capacity

The expansion from pilot to larger scale implementation is a crucial and taxing step. The task force and district will want to use the learnings from the first year of the pilot to strengthen and expand the capacities needed to support broader scale implementation of the plan in the following year. This requires a cautionary note; demonstrating the ability to build capacity at a select number of schools does not translate directly into the ability to support most or all of the schools. If implemented with insufficient understandings and support, this effort will fall short of desired intents and adversely affect the morale of teachers and principals. If larger scale implementation is effective, it will create momentum for making the compensation plan and its targeted objectives a welcomed core reality.  

Task Force and District

The relationship of the task force to the district’s core management structure will influence whether implementation is successful. While the district will benefit greatly from a task force with the commitment and sense of urgency that is essential to creating change, it will also be essential to institutionalize these qualities. The supports for the new compensation plan will need to be embraced by and channeled through the formal district structures. This will be a critical step for the district to ensure that improvements achieved during the pilot phases are sustained for full implementation and the long term, and are compatible with the district’s other major reform efforts.

Communications

In the development of a new compensation plan, the communications function is critical to arriving at a sustainable plan, to gaining acceptance of the plan, and to implementing it smoothly. There will need to be substantive and steady two-way opportunities among the task force, involved participants at the schools, and the broader community to share perspectives and influence the elements of the emerging plan. Moreover, because the forces of misinformation are pervasive when contemplating changes in compensation, the task force will need to carry out a plan of reaching out regularly to increasingly broader audiences.

Financial Modeling

The financial modeling that supports the development of a strategic compensation plan is conducted in stages. The initial modeling occurs while the task force is making decisions about which elements to include in the compensation plan. In this first stage the modeling will focus on comparative costs so that the task force can effectively weigh different options. In the second stage, as the pilot is beginning to be implemented and a complete plan decided upon, the modeling will focus on the total costs of the compensation reform. In the third stage, the modeling will track all of the district’s compensation costs reflecting the new, unified compensation package. The financial information reflects the behavior underlying compensation, and becomes a tool for tracking change and making corrections. Taking this approach makes it possible to provide the task force and district leaders with the appropriate forms of financial data at the exact times they are needed. The technical expertise to conduct this modeling is a blend of financial analysis, statistical methods and understanding of behavior in organizations.

Mid-Course Corrections

Mid-course corrections play a pivotal role in compensation reform. Making this possible is a core component of our assistance and a requisite for success. The arena of public education is characteristically not a safe and supportive environment for making mid-course corrections. Media scrutiny of schools often makes board and district leaders afraid to make mistakes, thus reluctant to commit to transparency. This often comes across to the broader public as spinning and to the school sites as ignoring their issues or needs. Our experience has found that transparency in the midst of change is critical to overall success. Reform strategies must be clear and should involve a broad base of partners – parents, corporate leaders, philanthropic supporters and others – who will support changing the core organizational and financial conditions that affect students, teachers and principals. When people are given information in a transparent way, and when the distribution of that information extends to all stakeholders in the school community, real change has a much greater potential to occur.

Timelines and Sequencing

Timelines have significant implications for implementation of compensation plans. The first phase is generally an unusually demanding period. An extensive amount of concurrent activity related to developing the elements of the plan must occur and be integrated into the form of recommendations. The activity will focus on the construct of the pilot, the organizational support capacity of the district, the availability of financing, the engagement of the schools and community, and the communications strategy.

Second, there are organizational and financial implications related to the scaling up of the pilot. The task force should be utilizing pilot results to guide organizational decisions related to large scale implementation. Further, the district may need to secure public financing to support the scaling up and sustainability of implementation absent many of these same results. These implications will affect organizational decision-making and the public campaign to support the compensation plan.

Third, the district should have the opportunity to make comparisons of results, and analyze trends. Trend analyses depend for accuracy and reliability on three or more years of data beyond the initial baseline.

To effectively utilize data and to be transparent, creation of the project timeline should be balanced with the district’s and public’s need for data on results, to increase the ability for results to be presented with precision and clarity.

Customized Assistance

Technical assistance requirements for developing a compensation plan and pilot that are sustainable, organizationally and financially, must meet the specific needs of the educational community. CTAC draws from our national experience to define a scope and form of assistance for meeting district goals, and help the district craft the types of changes that best fit each district’s unique needs and priorities.  CTAC strives to maximize the task force’s ability to use our assistance as it can be most helpful to the district. The areas of emphasis for technical assistance are adjusted according to the task force's determinations of the emerging needs and challenge.

Fairness and Validity

The efforts of the task force will be highly visible and transparent. Drawing from national lessons learned, getting buy in from diverse audiences to a new compensation plan is as much a function of trust as of the plan’s specific elements.  The plan will therefore need to pass litmus tests related to fairness and validity.

Because compensation reform takes place in a highly charged, public arena, fairness needs to be achieved at two levels. The elements and implementation of the plan must be fair and must be perceived as being fair.

To build a broad base of support, the plan will also need to meet three standards of validity. First, it will need to be statistically and financially valid in order to be trusted. Second, it will need to be educationally valid to engender the buy in of teachers and principals. Lastly, it will need to be politically valid to gain the public’s support.

Building consensus on a strategic compensation plan is essential for successful implementation and requires openness and careful nurturing. Differing dramatically from one-time events, building consensus on highly charged issues requires vigilant attention and ongoing commitment. CTAC focuses on building the awareness of priorities, concerns, and beliefs of all stakeholders. We emphasize sharing as extensively as possible the understanding of the principles, elements and implications of the compensation options. The focus should be on clarifying what is possible and building agreement on a truly strategic compensation plan.

For additional information please visit www.ctacusa.com/institute.html.