Over the last decade, pay reform and teacher evaluations were put forward hand in hand. As teacher evaluations became more rigorous, it became possible for districts to identify those teachers producing the most learning for students.
Using our sample of 124 large districts around the country, including the 100 largest and the largest in each state, this analysis looks at how teacher evaluation ratings impact teacher pay through base salary increases, pay freezes for low performance, and bonuses.
The performance pay landscape
Although there are a variety of ways to implement a performance pay scheme, this Trendline only examines pay increases as a result of a teacher's evaluation rating; it does not include other measures where a teacher may apply to be considered or agree to take on additional duties (such as attaining National Board Certification or serving in leadership positions).
Nearly half of the districts in our sample (48 percent) now offer some form of performance pay based on a teacher's evaluation rating. This represents an increase since we last looked at this topic in 2018, with the number of districts offering performance pay growing from 51 to 59.
Of course, not all performance pay policies equally recognize and reward the most talented teachers. Certainly system design and implementation issues, such as what NCTQ found in its review of performance pay in Florida, can hinder the success of performance pay policies. Districts' pay policies tend to run a full gamut in quality and type, from freezing the pay advancement of teachers with poor evaluation ratings to offering highly effective teachers bonuses of up to $25,000. Only 16 percent of our sample of large districts across the country have a comprehensive performance pay plan that rewards their most effective teachers, while most districts fail to distinguish between their average and highly effective teachers.
How evaluation ratings impact base pay
The most common form of performance pay is tying evaluation ratings to a teacher's base pay in some way, rather than offering teachers bonuses. All but one of the 59 districts that offer performance pay tie evaluation ratings to a teacher's base salary.
The majority of the 58 districts which use evaluation ratings to determine some portion of a teacher's base salary require teachers to earn a specific evaluation rating in order to be eligible for salary increases. In these 38 districts, teachers with poor evaluations have their pay frozen. These districts recognize that a pay raise should be based on job performance, rather than just simply accumulating another year of experience, but they are missing the opportunity to recognize the work of their most highly effective teachers through additional rewards.
Note: there are two districts that offer both bonuses to all teachers and bonuses for teachers working specific schools and subjects.
There are only 16 districts where a teacher's evaluation rating dictates the size of their salary increase. In other words, highly effective teachers earn more than effective teachers who in turn earn more than teachers rated less than effective. The majority of these districts (14) are in Florida, where state law requires that highly effective teachers earn the greatest salary increases. Also included in this category are Dallas Independent School District and Shelby County Schools (Memphis, TN).
There are four districts that use something other than evaluations to determine pay levels without relying entirely on a fixed salary schedule. Austin Independent School District and the Baltimore City Public School System offer teachers a variety of ways to move through the salary schedule based on accruing credits through evaluation ratings, professional development, and leadership positions. In both districts, the number of credits one can earn through evaluation depends on her rating.
The District of Columbia Public Schools may be best known for connecting evaluation ratings to teachers' base salaries, as well as to bonuses and leadership opportunities through its Leadership Initiative For Teachers program. As teachers advance through the career ladder by earning effective and highly effective evaluation ratings, they are eligible to move more quickly through the salary schedule. For example, when a teacher reaches the "Distinguished Teacher" level, they earn an additional five years of service credit and are automatically moved to the lane on the salary schedule normally reserved for teachers who earn a PhD, a jump in salary that can be more than $15,000.
Teachers in Milwaukee Public Schools who earn a distinguished evaluation rating in their third year of teaching and another distinguished rating in their sixth year of teaching earn a base salary increase of $1,500, but there are no ongoing opportunities for increases based on evaluation ratings.
Unlike the base salary changes that become a permanent part of a teacher's pay, a teacher must earn a certain evaluation rating each year in order to earn a given bonus. A minority of districts (19) offer bonuses to teachers based on their evaluation ratings. All of these districts with the exception of Billings Public Schools (MT) also have performance pay components that impact base salary.
In eight districts, bonuses based on evaluation ratings are available to all teachers who earn a certain evaluation rating in a given year. These bonuses range from as little as $100 per year (paid at retirement) in Billings Public Schools (MT) to as much as $5,000 per year in Newark Public Schools (when funds are available).
In 13 districts, teachers receive bonuses for earning certain evaluation ratings only if they work in particular schools or subjects. These range from $800 for teachers working in certain schools in Seminole County Public Schools to as much as $25,000 in the District of Columbia for teachers working in tested subjects in the highest-need schools.
Taking the next steps
Districts should ask themselves two key questions about their compensation systems. First, is there pay that recognizes the contribution of their most talented teachers? Second, is the pay being offered to the most effective teachers enough to help retain such talent? As this analysis shows, most districts have some work to do in order to answer both of these questions in the affirmative.
 Typically, districts freeze pay for teachers earning the lowest evaluation rating, although some districts freeze pay for any teacher rated less than effective on their evaluation.
 All of these districts with the exception of Billings Public Schools (MT) also have performance pay components that impact base salary.