Student achievement improves, and, as a result, so too does the pay of the principal, the teachers, and other school employees responsible for the improvement. That is a brief definition of a pay for performance system. It differs from the traditional salary step system in which an employee’s pay is based on how much education they have attained or how long they have worked for the particular district. Pay for performance is the subject of our most recent report.
Articles in yesterday’s papers delivered the news that there is a tentative five-year contract between the Pittsburgh Public Schools and the Pittsburgh Federation of Teachers on the table. If ratified, the deal would extend through June of 2015 and, if current trends hold (enrollment falling by 3% annually, and average growth in expenditures of 3% annually), the District will be spending about $662 million and serving 23k students by the time the contract expires.
It appears as though employees will see no changes in health care insurance benefits in the years of the contract and will enjoy annual salary bumps, with those at the top of the salary schedule getting $1,500 each year of the agreement. Not bad considering the rising cost of health care and the massive pension spike that is headed our way.
And what of pay for performance? The possibility of tying teacher pay to student achievement, though a remote possibility given union opposition to the idea, was raised first in November of 2008 when the school board outlined goals for the 08-09 school year. One board member said "people need to see the reward because it gives them the incentive to do more" while the head of the PFT said many performance pay models were "tremendous failures".
The award of $40 million by the Gates Foundation this past fall certainly gave the idea momentum, and the District at that time had a few years of experience with a performance pay model for all of the school system’s principals (around 70) who no longer get salary step raises but are instead "compensated based on their performance" according to the website of the office that oversees the program.
So the District and the teachers appear to have settled on a "voluntary" arrangement for teachers instead of a widespread adoption of performance pay. Consider that principals are not unionized and their pay system did not have to be collectively bargained, whereas the teachers are and it does. If there is a five year contract with only minimal movement to performance pay for teachers then it appears the union, not surprisingly, won on this issue.