Why Merit Pay Won't Cost Us More

One of my great frustrations of late is hearing reporters or policymakers ask, "How in the world can anyone afford merit-pay proposals in today's strapped budget environment?" The query always leaves me banging my head on my desk because it so perfectly captures K–12's skewed approach to money and incentives.

Rethinking pay should be, at the very worst, a break-even proposition. More to the point, it should be a money saver.

Finding ways to steer more dollars to more effective employees should help schools find smart ways to take fuller advantage of their skills. Steering dollars away from less effective employees—whether measured in terms of classroom instruction, mentoring, tutoring, or what have you—is a chance to stop overpaying for less essential or less effective employees. All of this should increase districts' bang for each buck they spend.

Rewarding terrific teachers should include rewarding them if they're willing to take on additional students and serve the students well, which will benefit the students while boosting productivity. Overhauling compensation systems to create avenues for accomplished, full-time tutors or more effectively integrate and support part-time educators should entail a more nimble and efficient use of dollars.

The fact that even radical reformers have always pitched compensation reform as a "this plus that" proposition—as requiring layering new dollars atop old arrangements—is a measure of our dysfunction. It means that inefficient old commitments remain in place, that efforts to reward performance require finding new dollars, and that the vast pool of existing dollars is already spoken for. It also means that compensation reform usually gets reduced to modest merit-pay bonuses that fit neatly atop the current system.

Now there are plenty of practical reasons why compensation reform proceeds in this manner. At the behest of their members, teacher unions are fierce defenders of current arrangements. State financing systems, state regulations, and district policies are predicated on the existing salary structure. The lack of a bankruptcy threat has meant that, unlike employees at a private-sector firm, district employees never face a threat so dire that they've had to swallow transformative measures without lots of sweeteners to ease the discomfort. These can be addressed, but that must start by abandoning the presumption that merit pay necessitates an infusion of new dollars.

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