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Teacher Incentives: Teacher Incentives: Defining and Getting To Defining and Getting To

A New DealA New Deal

Marc J. WallaceMarc J. WallaceCenter For Workforce EffectivenessCenter For Workforce Effectiveness

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Today’s AgendaToday’s Agenda

We’re In Love With Business!

Can SBPA and KSBP Work In A Professional Environment?

7 Hard Won Lessons

Getting To A New Deal

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We’re In Love With Business

Lionized Heroes Like Jack Welch

Popularity of Six Sigma

Run Like A Business

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Can SBPA and KSBP Work In A Professional Environment?

What’s The Difference Between General Electric and a School District?

What’s The Difference Between a Manager or a Sales Person And A Teacher?

Does Money Motivate?

Some Good Questions...

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Historically variable pay was restricted to select groups of employees:

Executive Compensation - Short & Long Term Incentives

Sales Incentives

Recent experience shows great interest in extending variable pay to broad groups of

employees

School Based Performance Award SBPA Basics

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Be careful what we call variable pay:

Incentive - Cash payment that is earned

Bonus - Cash payment that is discretionary

Both have a place in a total compensation strategy

School Based Performance Award SBPA Basics

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Unit incentive plan

Long term business goals

Continuous improvement

SBPA is an adaptation of a business practice called GoalSharing

School Based Performance Award SBPA Basics

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GoalSharing plans establish an operational model of the business and share a part of any gains beyond specified targets.

Rewards shared with employees for achievement above targetOperations

Target

School Based Performance Award SBPA Basics

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GoalSharing is much more than just a pay system.

GoalSharing communicates the company’s strategy that impacts the culture of the Virtual

Workplace

School Based Performance Award SBPA Basics

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Corporate Perf.

Co/Unit Perf.

“How can we possibly make this goal?”

“How can I get these costs down?”

“How can I increase our stock price?”

“How long until I can go home?”

Small Team

Individual

School Based Performance Award SBPA Basics

11Corporate Perf.

Co/Unit Perf.

“How are we doing right now?”

“How can we do better?”

Small Team

Individual

School Based Performance Award SBPA Basics

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Overview of Knowledge And Skills Overview of Knowledge And Skills Based PayBased Pay

Dates to the Middle Ages - Common in the professions

E.g, Medical, legal, accounting professions

Replaces traditional job evaluation

Pay the person according to competencies acquired and put to work

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Common Characteristics of Knowledge and Skills Based Pay

Pays the person not the job Everyone starts at the same beginning rate Base pay increments are attached to increasing

levels of competency to perform Pay structure is relatively flat (Top Rate 160% to

200% of entry level) Upward movement is expected of all (“Up or Out”) Steps are based on significant results related to

professional expectations

Overview of Knowledge And Skills Overview of Knowledge And Skills Based PayBased Pay

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What Have Successful Organizations Achieved With Skill Based Pay?

Flexibility More Efficient Use of People Higher Levels of Productivity Improved Quality Improved Customer Service Fulfilled Employees

Overview of Knowledge And Skills Overview of Knowledge And Skills Based PayBased Pay

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Best Fit Scenarios

Organizations Have A Need For Skilled Professionals

Work Has Been Designed To Allow For the Use of the New Competencies

Sufficient Trust and Empowerment Exists Between the Organization and the Professionals

Management Sees the Value of Investing In Professional Capital

Overview of Knowledge And Skills Overview of Knowledge And Skills Based PayBased Pay

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Overview of Skill Based PayOverview of Skill Based PayMajor Threats to Skill Based Pay

Topping Out - “What’s Next”

Threat of Degenerating Into “Paper Hanging”

Conflict with Traditional Job Evaluation Designs

System Expense

Re-Certification and Currency

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Seven Hard Won Lessons About SBPA and KSBP

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Seven Hard Won LessonsSeven Hard Won Lessons

Lesson #1: 38 % of Incentive Programs Fail

They end up as entitlements

They end up as a source of contention between management and labor

They fade away and leave a bitter taste

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Lesson #2: When they fail, the cause is not a matter of having poor design but a matter of poor execution

Not being ready Not communicating enough and not communicating

eloquently Not involving team members in goal setting Not being able to assess the impact of the program and

change its direction

Seven Hard Won LessonsSeven Hard Won Lessons

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Lesson #3: In order to be successful, an incentive system must achieve each of the following criteria...

It must capture attention and generate excitement. It must be understood. It must communicate business goals and objectives. It must operate as designed. It must lead to improved business performance.

Seven Hard Won LessonsSeven Hard Won Lessons

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Lesson #4: Meaningful Collaboration Is Essential

Involvement of Teachers and Other Staff Partnership Between Boards, Administrators and Union

Leaders Ownership of the Participants

Seven Hard Won LessonsSeven Hard Won Lessons

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Lesson #5: SBPA and KSBP Must Have Credible Standards

Make sure SBPA measures are valid and reliable

Make sure teachers can make a difference Make sure steps KSBP steps add value Make sure that certification is based on

performance and results in addition to knowledge

Seven Hard Won LessonsSeven Hard Won Lessons

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Lesson # 6: Conflict With Tradition

“Seniority and tenure don’t count anymore!”

“Holding out money is demeaning!”

Seven Hard Won LessonsSeven Hard Won Lessons

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Lesson # 7: Credible Pay Comparisons

KSBP Must Still Be Competitive(External Fairness)

KSBP and SBPA Are Not Band Aids For A Flawed Base Pay Program

KSBP and SBPA Programs Must Be Fair Internally

Seven Hard Won LessonsSeven Hard Won Lessons

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Getting to the New Deal --- Rules of the road

High Tech

New Schools

CWENew Deal

Skills

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Rule #1: Get Past Future ShockRule #1: Get Past Future ShockThe New Deal forces us to get past characteristic milestones of adjustment to major change:

Stage 1Denial

Company Employee

“This is a blip. We’ll tough it out and business will be back.”

“They can’t really mean it! These things don’t happen here!”

Stage 2Anger

“Why can’t they leave us alone! They don’t play fair!”

“How dare they do this to loyal employees!”

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Rule #1: Get Past Future Shock Rule #1: Get Past Future Shock (Continued)(Continued)

Stage 3Bargaining

Company Employee

“If we get lucky, this is the last change we will have to make!”

“Maybe if I work harder!”

Stage 4Depression

“What’s the use?” “It’s hopeless!”

Stage 5Acceptance

The New Deal The New Deal

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Teacher Teacher AccountabilityAccountability

Board Board AccountabilityAccountability

Student Student AccountabilityAccountability

Rule # 2: Think Impact and Rule # 2: Think Impact and AccountabilityAccountability

Let’s Get A Common Understanding of Roles….

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Rule # 3: Make Collaboration A HabitRule # 3: Make Collaboration A Habit

Collaborators:

Teachers

Support Personnel

Administrators

Boards

Communities

Students

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Rule # 4: Career ManagementRule # 4: Career Management

Forget career franchises:

My career is a platform that gets me close to core problems

NOT

Promotion sequences in the same school district based on merit

Career pay is driven by increasing Career pay is driven by increasing personal asset value, personal asset value, notnot tenure tenure

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Rule # 5: Tough LoveRule # 5: Tough Love

Tough Love requires that the employment relationship shift:

From: To: Parent/child to

Parent/child

Parent/child

Mutual responsibility

Self management

Shared riskto

to

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Thank You!