Teacher Compensation Policy
While giving local districts authority over pay scales, the state should ensure that effectiveness is a factor in teachers' compensation. This goal is reorganized for 2021.
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 50% 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. However, the state no longer requires objective measures of student growth in its teacher evaluation system.
Performance Pay Policies: Indiana stipulates that "the amount that would otherwise have been allocated for the salary increase of teachers rated ineffective or improvement necessary shall be allocated for compensation of all teachers rated effective and highly effective."
Indiana Code 20-28-9-1.5
Support a performance pay plan that recognizes teachers for their effectiveness.
Whether it implements the plan at the state or local level, Indiana should ensure that performance pay structures thoughtfully measure classroom performance and connect student growth to teacher effectiveness. Districts should be given the flexibility to define the criteria for performance pay provided that such criteria connect to objective evidence of student growth. The plan must be developed with careful consideration of available data and subsequent issues of fairness and it should allow for the participation of all teachers, not only those in tested grades and subjects.
Indiana recognized the factual accuracy of this analysis; however, this analysis was updated subsequent to the state's review.
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.