Teacher Compensation Policy
While giving local districts authority over pay scales, the state should ensure that effectiveness is a factor in teachers' compensation. The bar for this goal was raised in 2017.
Salary Requirements: Indiana requires local salary scales
to be based on a combination of factors: evaluation, education/experience, academic needs of students, and leadership. Education and/or experience may not account for more than 33 percent of the calculation used to determine a teacher's salary increase; academic needs of students and leadership are not defined by the state. A teacher rated ineffective or improvement necessary may not receive a pay raise the following year. Teachers in their first two years of teaching are eligible to earn a pay raise, regardless of evaluation rating.
Performance Pay Policies: Indiana's compensation policy rewards effective teachers.
Indiana Code 20-28-9-1.5
Monitor district implementation.
To ensure that Indiana's strong state policy regarding teacher performance pay is implemented as intended, the state is encouraged to monitor how districts interpret requirements and execute individual compensation systems. To uphold the spirit of the law, high-performing teachers, as measured by an evaluation based on student growth measures, should have the opportunity to receive a meaningful financial reward.
Indiana recognized the factual accuracy of this analysis.
Compensation reform can be accomplished within the context of local control.
Teacher pay is, and should be, largely a local issue. Districts should not face state-imposed regulatory obstacles that prevent them from paying their teachers as they see fit; different communities have different resources, needs, and priorities. The state can ensure that all teachers are treated fairly by determining a minimum starting salary for all teachers. However, a state-mandated salary schedule that locks in pay increases or requires uniform pay deprives districts of the ability to be flexible and responsive to supply-and-demand problems that may occur.
While leaving districts flexibility to decide their own pay scales, states should promote compensation tied to teacher effectiveness and discourage districts from basing pay solely on criteria not correlated with teacher effectiveness. Across the country, state and district salary schedules are based primarily on just two criteria: advanced degrees and years of experience, neither of which is correlated with teacher effectiveness. The impact of advanced degrees on teacher performance has been studied extensively, and research has shown that such degrees generally do not make teachers more effective. Years of experience do have an impact on teacher effectiveness very early in a teacher's career, but this effect appears to fade out after the first few years of teaching. Because of their predominance in current salary schedules, states need to take a proactive role in preventing districts from basing teacher pay primarily on these two criteria.
Performance pay is an important recruitment and retention strategy. Performance pay provides an opportunity to reward those teachers who consistently achieve positive results from their students. The traditional salary schedule used by most districts pays all teachers with the same inputs (i.e., experience and degree status) the same amount regardless of outcomes. Not only is following a mandated schedule inconsistent with most other professions, it may also deter talented individuals from considering a teaching career, as well as high-achieving teachers from staying in the field, because it offers no opportunity for financial reward for success.
States should set guidelines for districts to ensure that plans are fair and sound. Performance pay plans are not easy to implement well. There are numerous examples of both state and district initiatives that have been undone by poor planning and administration. As the use of value-added models now allow for the development of a more meaningful understanding of teacher effectiveness, districts should ensure that performance pay systems consider both qualitative and quantitative measures in order to fairly assess and compensate teachers for their performance.
States can play an important role in supporting performance pay by setting guidelines (whether for a state-level program or for districts' own initiatives) that recognize the challenges in implementing a program well. A few states now require that districts build performance into salary schedules, moving away from bonus structures that teachers know may be subject to budget constraints and competing priorities.