Change Leadership

At the NAIS Institute for New Heads each year, I give school leaders a wry piece of advice: “If something goes terribly askew at school, and you need to buy time to rectify it before your parent body finds out, suggest a change to the dress code. This tactic will keep parents distracted for at least 18 months in dress-code debates, giving you plenty of time to quietly fix the problem.” Next July, for the new group of school heads, I’m going to add a similar strategy for keeping the faculty preoccupied: “If you need to implement a change that would normally cause gnashing of teeth and drawing of battle lines among your teachers, do it after you form a task force to study changing the compensation system to a merit-pay model. The faculty will be so annoyed and preoccupied by the merit-pay proposal that the other change will seem minor by comparison.”

By now, we know why basing pay on individual performance, a standard practice in the business world, is anathema to most faculties. Because…

• …effective schools depend upon a climate of collegiality, a climate faculty members assume will be undermined by head-to-head competition for a limited resource, performance pay.

•…faculty evaluation systems, even those created by the faculty themselves, become suspect if used to determine pay, rather than their rightful purpose for professional growth and development.

•…many faculty members assume that no administrator is remotely qualified for, or objective and fair about, assessing the performance of teachers.

•…student achievement — good, bad, or mediocre — cannot easily be tied to a single teacher’s performance. Some of the best student achievement occurs when teachers simply get out of the way. Some of the worst student performance occurs despite the heroic efforts of great teachers, because other factors can derail students. And, in other cases, much of the salubrious impact of good teachers is delayed, sometimes by decades, for a variety of reasons.

•…as Andy Guess notes (“Debating the Merits of Merit Pay” Inside Higher Education), “…not everyone agrees what exactly ‘merit’ — or ‘performance,’ or ‘incentive pay’ — entails.”

Kimberly Merriman, in “Low-Trust Teams Prefer Individualized Pay” (Harvard Business Review), points out that while 85 percent of Fortune 1000 companies base at least part of employees’ pay on group or team performance — supported by the theory that this compensation strategy will increase the effectiveness of teams — in fact, individuals prefer individual pay systems because they don’t trust their colleagues to be effective and they think it unfair that their pay is tied to someone else’s performance. So even team-based performance pay, which some schools also use, doesn’t quite achieve its goal of boosting performance of individuals and teams and rewarding achievement, since it often engenders distrust and exasperation rather than trust and teamwork. (And, in fact, non-compensation rewards seem to work better for teams: praise and spotlighting team success.)

James W. Guthrie and Patrick J. Schuermann, in “The Question of Performance Pay” (Education Week), observe that, despite historic resistance, performance-pay initiatives in the public school sector have taken off in the U.S. in the last three years, with more than $500 million allotted for this year alone for performance-pay plans, affecting at least 10 percent of teachers nationwide. While enthusiasm among policymakers and pundits grows, the research jury is still out on whether or not such systems in the public schools achieve either of two central goals: increasing student achievement and attracting a broader base of talent into the profession.

So why should school leaders wade upstream against the tide of faculty resistance? Because downstream a storm is brewing:

1. Board Demands for Strategic Accountability: School boards, typically consisting of a good number of business leaders, rightfully insist on maximizing their investment in salaries and benefits and increasingly understand that fixed scales remove any incentive for change and progress. Instead of pay scales on a step system that favors years of experience and advanced degrees (neither of which necessarily correlates with superior performance), enlightened boards ask school leaders to develop a compensation philosophy, one that addresses the key desired outcomes for pay: (1) attracting and retaining talent; (2) incentivizing change and thereby moving the institution forward; and (3) rewarding initiative and performance.

2. Higher Benchmarks for Salaries: Starting salaries for public school teachers have a new national benchmark: $42,500 for 2008–2009, established by the Denver Public School system, and rooted in a pay-for-performance model supported by the teachers union. Since all independent school teachers benchmark their salaries against public school norms (national or local, whichever is higher), a new high-water mark has just been set, especially for those schools that recruit nationally. If we’re going to have to pay more, we may as well try to get more, the reasoning goes.

3. Competing for Talent: The competition for talent is heating up, significantly. The Baby Boomer teachers, largely highly talented women, are about to retire. Since women of that generation had few career options other than teaching or nursing when they entered the job market in the late 1960s and early 1970s, public and private schools benefited. Both systems have had a heavy proportion of exceptionally bright and capable teachers. Now, given the wide-open career opportunities for women (and minorities), the prospective teacher pool from education schools is weak: often students with the lowest SAT scores in the weakest programs of the least selective colleges and universities. One exception is Teach for America, where America’s “best and brightest” sign up for duty in America’s most challenged schools, compelled by the opportunity to “give back” after receiving so much in their own school years, and excited by the distinction of being chosen for a very selective program. 

4. Accommodating the Millennial Generation: Our own children and students graduating from college now have introduced some incredibly difficult challenges to the workplace. If the research on the Millennials is correct (and early experience with them in the marketplace seems to indicate it is), this next generation of teachers will expect higher salaries, more rapid advancement, and more options for creativity and leadership than today’s teachers are currently offered. Therefore, a traditional step system of compensation that only rewards, slowly, years of experience and advanced degrees is less likely to attract the talent we’ll need and want. What we can anticipate from the new work force is that it will be less institutionally loyal, and more transient. The bright side is that Millennials are incredibly idealistic, task-oriented, ambitious, and risk-tolerant, all of which will make change, including compensation-system change, more achievable and agreeable.

5. A New Value Proposition for Schools: NAIS’s call over the last several years for re-engineering school finance in the name of financial sustainability has migrated beyond being “relevant” to becoming “urgent.” For years, both the National Association of Independent Schools (NAIS) and Independent School Management (ISM) have been noting that schools can only have two of the three following factors simultaneously in play: small classes, high salaries, and modest tuition increases. NAIS’s take on this equation is that “small classes” is a proxy for “individual attention”; “high salaries” is a proxy for “high quality faculty”; “modest tuition increases” is a proxy for “access and affordability.” For the last two decades, independent schools have committed to the first two factors at the cost, literally, of forsaking the third. What our trend lines have intimated, the current economic crisis has punctuated: Many schools have hit or passed the “price-break” point where demand has softened because price has put their service out of reach of all but the most affluent.

So the future calls for choosing a different pair of factors: high salaries and modest tuition increases, with larger classes (or at least more efficient student/faculty and student/total staff ratios, however achieved). Since the research is compelling that class size up to 22–25 has no bearing on student or school success and achievement — at least in independent schools and probably in all schools (except for LD programs) — most schools have some significant wiggle room in changing the equation. And the bright spot here: we can change the equation for the next generation of teachers more easily than for the current generation about to retire.

Once school leaders find themselves in the pay-for-performance stream, up to their elbows in the rushing waters, what are the “lifeline” strategies they can safely grab onto?

• Salaries: Higher Starting, Lower Top, Compressed Middle: One rather evident opportunity is to flatten the scale and range of salaries, since most attrition happens at the front end (three-to-five years as a teacher, leaving the profession) and mid-career (10-to-15 years as a teacher, moving to a new school with higher pay and some leadership opportunities). This will happen naturally as the highest paid teachers retire and the lowest paid teachers are paid higher starting salaries, but school leaders should plan for it and leverage it proactively as part of their recruitment strategy. The simplest pay-for-performance shift is to a compressed pay scale. The “new take” will be that the range of pay is not so widely disparate because everyone does about the same work and because one’s position is the variable, not one’s pay. That is to say, if an individual teacher is not performing to the high standard that the relatively high pay demands, then “counseling out” becomes a more compelling management obligation.

• Leadership Opportunities: A systemic weakness of the teaching profession is that there are no advancement possibilities, unlike virtually all other professional careers. We should change that immediately by creating more leadership opportunities that allow teachers to stay in the teaching track (and not forsake teaching to jump to administration just to have leadership and higher pay options). I’m imagining schools where beyond “department chair,” we’ll have many more leadership options that even young teachers will have a shot to fill: grade-team leader; curriculum specialist; new teacher mentor; grade dean of students; lead coach; etc. These leadership options would include title, recognition, and additional compensation.

• Hybrid Systems: By posting a query on any school leader listserve, one can find scores of schools that have experimented, many successfully, with the various pay-for-performance options, namely three alternatives:

Bonus Systems — the corporate model of rewarding outstanding individuals or teams;
Overlapping Bands — the professions model of flexible and overlapping ranges based on workload and skills;
Faculty Rank Ladders — the university model of ascending ranks where “up or out” forces quality assessments at various career stages. 

NAIS encourages school leaders to imagine alternatives to these three basic models, including hybrids. The least divisive and most acceptable first step may well be a hybrid approach, incorporating the essence of all three models in a “more pay for more work” approach, a more consciously-driven transitional stage of doing what schools have done informally from the beginning — finding ways to reward the “stars” in the system outside of luring them into administration and out of teaching. This works as the administrative team annually assesses the “high performance/good attitude” members of the faculty and invites them into a newly created leadership role or heavier schedule — in addition to the teaching responsibilities, not in place of them. Who, at whatever age and stage in his or her career, can teach larger classes, take on more sections (e.g., six sessions meeting four times a week rather than five sections meeting five times a week), take on additional leadership roles, coach more athletic and other extracurricular teams, adopt more technologies into their classrooms, invent more creative lessons, etc.? This change strategy works because it leaves the base-salary system in place while rewarding the all-star performers. Because these rewards for additional assignments are annually determined, rather than permanently incorporated into base salary, renewing the rewards depends on performance.

• Change Leadership Strategies: The greatest impediment to any change in schools is the cultural attachment to consensus. To counter this attachment to consensus, one “change management” strategy is to proscribe what decisions get to be made consensually, and what get to be made administratively. Just this one operational change would take schools upstream on any number of issues by eliminating two classic costs of consensus decisions: (1) watering down an initiative to the point of acceptability and thereby removing the most salient elements; and (2) creating collateral damage to collegial relations among faculty — including anger, hostility, sadness, mourning, depression, subversion by those who oppose the change in the discussion and resist it in implementation and practice. So how about a new pay-for-performance system that is voluntary, at least during a pilot period, targeting early adopters and forsaking the one-size-fits-all approach of most consensus-based policy changes? For example, a school could require all new hires to be on the new pay-for-performance system and give current employees a choice: Choose “security” at a fixed annual cost-of-living increase to salary, or choose pay for performance, with one’s raise attached to the school-defined performance criteria, essentially a pay-at-risk option that would punish poor performance with no pay increase (and probably probationary status), but reward good performance with a pay increase well beyond the cost of living.

Although many independent school educators try to deny it, real school leadership inevitably involves change. Standing still in the stream — maintaining the status quo — actually means falling behind these days. To avoid change leadership is to manage rather than to lead, to be the caretaker and not the visionary. The best school leaders understand this. And since compensation is the driver of all school budgets, they also understand that change leadership in the arena of compensation strategy is no longer an option.

Patrick F. Bassett

Patrick F. Bassett is president of NAIS. After 12 years at the helm, he is retiring as of June 30, 2013. This is his 48th column for Independent School.