In recent years, Chicago Public Schools has rolled out bonus pay for administrators and teachers.

Now, the district is considering merit pay for principals; specifically, tying a portion of their salaries to student test scores, attendance and, for high schools, freshman on-track rates.

Also on the table is a proposal to scrap principals’ graduated pay scale, which is based on school size and can range from $118,000 to $160,000, and replace it with a flat salary of $125,000 a year.

The idea is to financially reward principals for improving bottom-line results under the most challenging circumstances, explains CPS Chief Administrative Officer M. Hill Hammock. “We have been challenged by [CEO Arne Duncan] to think about how to reward principals who have been doing a good job and who are working in difficult schools,” he says.

Why this matters

Chicago is one of a growing number of school districts looking to reward principals financially for raising student achievement. But local principals are so far skeptical about what’s being discussed, and there’s little research to make the case. According to one report:

  • Nationally, most school districts base principal pay on experience, school size or location and other factors not directly related linked to student performance.
  • Not enough research has been done to make a direct connection between a principal’s actions or skills and student performance.
  • Policy recommendations include getting more districts to experiment with merit pay for principals and developing new models of principal compensation.

Merit pay plans for educators—and for principals in particular—have been gaining traction nationally. Currently, at least 30 school districts across the country have either launched or are considering performance pay initiatives for principals. Yet, according to a report published by the Center for American Progress, a progressive policy think tank, little research has been done to directly link what principals do and how they are paid to student achievement.

“There are theories that link principal pay to performance, but there has not been a lot of experimentation to know if this is a good thing,” says researcher Dan Goldhaber of the University of Washington who conducted the study.  “Caution is warranted.”

High-profile programs include Houston, where merit pay for principals and teachers is linked; and Pittsburgh, where principals’ bonuses are based in part on meeting goals, like improved parent involvement, that are tailored to individual schools. The effort underway in New York City, which rewards principals for working in high-needs areas, as well as for student and school performance, is also being closely watched.

Still, despite a number of evaluations of New York’s principal pay program, it is hard to tell if a boost in student achievement is directly connected to principal pay incentives, Goldhaber says.

“New York is trying a host of things, so it would be hard to pin it down,” he explains.

Here, one supporter of principal merit pay, the Chicago Public Education Fund, plans to invest heavily in the effort. Performance pay for principals and teachers is one of four priorities for the Fund’s recently launched $30 million investment fund.

“The system is eager to do this, and we do want principals to be compensated as professionals,” says President Janet Knupp.

‘This has been an ambush’

Yet principals are wary of the district’s proposal, and leaders of the Chicago Principals and Administrators Association, which operates like a union for principals and assistant principals, are angry that they had no input.  

“This has been an ambush,” says President Clarice Berry, who learned about the proposal when a “discussion document” was leaked to her a couple of months ago. “We are having our complete compensation structure demolished.”

Berry argued that the bonus proposal based solely on academic performance leaves out other important responsibilities that fall to principals, like hiring the best teachers and making sure schools are safe. “What principals do is very complex,” she says.

One principal, who did not want to be identified by name, noted that the proposal under consideration would make it more difficult to recruit principals to lead the district’s neediest schools. For instance, choosing between two schools with similarly challenging students, “one has 200 students and the other has 800, and you get the same pay, you’ll take the school with the smaller number of students and staff,” the principal says.

To run a school effectively, principals’ skills must match the needs of individual schools and their student body, says Joan Crisler, a former elementary school principal who now runs the citywide principal training program CLASS. A principal running Marshall, a neighborhood high school in an impoverished community, is going to manage the school differently than a principal at North Side College Prep, a top-scoring selective high school, Crisler notes.

“And size matters,” she adds. “If someone says that it doesn’t take much more to run a school with 2,000 students than it does with 200 students, well, that’s not true.”

Principal Amy Rome at National Teachers Academy likes the idea of holding principals accountable to meeting performance targets, but says she is concerned about the possibility that schools would be compared unfairly. 

“I would never make excuses for my children,” Rome says.

CPS hiring executive pay consultants
However, in the midst of the uproar, district officials say the furor over the proposed plan is premature. 

“These were first thoughts,” says Hammock.

In mid-October, the district was close to hiring executive compensation consulting firm Towers Perrin to develop a performance pay plan for principals.

“This is sensitive and complicated,” Hammock says. “We want them to help us figure out the best way to do this.”

Berry says she is willing to consider bonuses if the existing graduated pay scale for principals remains in place.

District officials are aiming to roll out merit pay for principals as early as July 2009.

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