Douglas County, Colorado, located along the eastern slope of the Rocky Mountains near Denver, is home not only to one of the fastest growing school districts in the United States but also to a precedent setting pay-for-performance compensation plan for teachers. This plan has a number of innovative features. Most important, it represents a significant departure from past practice by basing teachers salaries on performance rather than longevity. Moreover, teachers are rewarded not only for their accomplishments in the classroom but also for completing extra duties outside of the classroom. In addition, incentives are offered to high-performing school teams as well as to individual teachers.
This newly implemented pay-for-performance plan, which was initially conceptualized in mid-1993 and has just completed its first year of operation, represents a collaboration among the school district, the local teacher union, the Board of Education, and business and community members. With this plan, teachers who demonstrate proficient performance receive annual salary increases, while those who provide evidence of highly effective performance or offer additional services can earn a variety of bonuses and incentives. Teachers who are evaluated as unsatisfactory, however, receive no salary increases beyond education credits and market adjustments in the pay scale.
The plan has three main components (see Table ): 1) general pay, 2) responsibility pay, and 3) group incentives. The general pay component provides compensation based on individual performance; the responsibility pay component awards teachers money for additional duties performed; and the group incentive component rewards groups of