HAYIDION The Prizmah Journal


Transparency in School Compensation

by Maccabee Avishur, Dina Rabhan and Shira Heller Issue: Money Matters

What percentage of your school’s operating budget goes to salaries and benefits? If your school is like most, the answer is probably between 65% and 80%. In other words, your single largest budget line, by a long shot, is compensation for your faculty and staff.

However, while the compensation line is the heavyweight of your budget, it is likely one of the most opaque and least understood. Research indicates that increased transparency during the hiring process and beyond benefits schools.

Salary Transparency During Hiring

To Include Salary or Not?

Have you ever met a candidate who was attracted to your school because the job description stated “Competitive Salary Commensurate with Experience”? Probably not.

Trust and transparency begin in the hiring process. Publicizing salary immediately demonstrates a school’s honesty, openness, and integrity, as well as the value the school places on treating faculty as respected professionals. This will help attract the types of candidates in whom you are likely interested.

Before you think about publishing a salary, you have to seriously consider what type of teacher you are looking to hire by looking at your school’s culture, readiness to support new teachers, and budget. You might then set your sights on an experienced, highly qualified teacher who will wow from day one. Or you might prefer to hire a less experienced teacher who, with formal mentorship and support, can grow to embody your school’s unique mission. Research supports what might seem obvious: higher pay is correlated with attracting higher-quality candidates. Some schools try to hedge their bets by publicizing a large salary range, thinking that they’d pay $35,000 for a “green” candidate or $65,000 for an experienced one. Setting such a large range undermines your efforts to find the best candidates by setting your sights too broadly. In general, if you have $65,000, set your salary range tightly around that number, unless you’re philosophically committed to recruiting a teacher new to the field.

It is worthwhile to note that compensation is not synonymous with salary; fringe benefits should be considered, too. Schools should openly advertise their entire benefits package, including medical, dental, paid-time-off, retirement plans and tuition remission. In addition, work-life balance is incredibly important to many teachers, especially millennials. Candidates will be attracted to your school if you offer teachers a good balance of prep time or flexible scheduling that enables a life outside of school.

Fears and Concerns

School leaders typically have several reasons for not wanting to include specific information about compensation in their job postings.

Concern #1: Advertising the salary range disadvantages the school during salary negotiations.

Response #1: Some school leaders believe they can get a bargain if they do not disclose the maximum salary possible, and are reluctant to list a salary range for fear of paying more than the minimum their candidate of choice would accept. Most candidates know this and enter into negotiations feeling disadvantaged and suspicious. Including the range is a sign to candidates that your school is transparent, honest and professionally run.

If you’re concerned about overpaying, rest assured that it is unlikely that you will meet and choose to hire a candidate whom you think is actually worth less than the salary you originally advertised. If you choose to interview and ultimately make an offer to a candidate whose qualifications don’t match the minimums you established and advertised, you are not obliged to offer the advertised salary. You can tell the candidate so openly. Say, “We had computed that salary based on a list of qualifications, some of which you don’t yet have. We’d like to make you an offer at a salary appropriate to your qualifications.” Anecdotal evidence from colleagues in the field suggests that in the rare cases when this tactic is needed, it is usually successful. Candidates who apply without the requisite qualifications are ready to negotiate. Occasionally such candidates may walk away from the offer, but this is probably for the best in the long run.

Concern #2: Advertising a salary range won’t weed out the bad candidates, and, in fact, will encourage them! Plus we’ll miss out on great candidates who aren’t interested in the salary we’re offering.

Response #2: It is true that job seekers are sometimes unrealistically optimistic. Especially in the age of electronic applications, some candidates believe they have little to lose by submitting a resume via email even if they aren’t qualified. These unqualified job seekers are likely to apply for your opening whether or not the salary is listed. Screening out clearly unqualified candidates takes only a matter of seconds. More sophisticated candidates, the kind you are likely seeking, desire an information-rich hiring process. They are actually less likely to apply to a job that omits salary information. In other words, you increase your chances of attracting your target candidates by advertising salary.

To ensure that your salary range is competitive, learn about aggregate salary information for your geographic region by consulting the local public school system and the YU School Partnership. If it turns out that your salary range is low relative to your competitors, consider why that is so and whether concealing that information will be more helpful or harmful in the long run. Candidates who invest time in the application and interview process may ultimately be severely disappointed when they learn that your salary range is below their salary requirements. This could lead to negative PR for your school that will turn away future potential candidates.

If your salary is low for the area but you offer other amenities and benefits that are potentially attractive to candidates, it can be helpful to list those along with compensation.

Concern #3: My current faculty, many of whom are earning less than we plan to pay the new teacher, will express their frustration, incredulity, and hurt when they see the salary being offered.

Response #3: It is true that if the salary you are offering is out of step with what current faculty are earning, staff morale will be affected. Current staff may feel empowered to demand more pay. If the position is a specialized one that requires specific training, and this is clearly communicated in the job description, your faculty probably will not take offense in the outsized salary. Recent research suggests that this is particularly true among younger employees who value giving different rewards to people with different skills.

However, if the higher compensation is not linked to special training or skills, you can expect some backlash from your current faculty. Explaining your reasoning for the higher compensation (challenges in recruiting, changes in the field, etc.) may assuage some anger. It’s good to “get out in front” of this message early with your faculty to reduce potential backlash. However, if you feel that faculty morale will be negatively impacted, it may be wise to forgo listing the salary and to begin a strategic plan for creating a more transparent system of compensation in your school. This is a tactic that has worked well in managing faculty expectations and morale related to compensation in the public sector as well as in schools in the private sector.

What to Write

If you decide that you want to list salary, what should you write? Some schools prefer to list a range, as long as the range is not so large that it’s meaningless to candidates.

We strongly recommend the following. Decide on the minimum amount you will pay a candidate who meets your minimum qualifications. Then, advertise the salary with the following phrase:

“Salary starting at $x and up, commensurate with qualifications and experience.”

This salary, coupled with your indication of the experience required, will help you attract candidates from your target market, whether beginning teachers, mid-career folks looking to change schools, or teacher leaders.

Beyond Hiring: Salary Steps and Bands

Misconceptions abound regarding how much school employees earn. This is true both within schools and without. Within schools, few faculty members have any idea what the median compensation is in their school or geographic region, how much someone else with their experience and training might be earning in the school, or what factors influence salary decisions. Outside schools, parents and other stakeholders harbor misconceptions that are often in competition with one another. Some believe we spend too much on faculty and (especially) administrative pay while others believe we pay our educators (especially the teachers) too little.

As with advertising salary in the job description, Jewish schools are secretive about their compensation practices because they see no benefit to revealing that information, but intuitively understand the risks. Most of these risks arise because school compensation is inconsistent. Transparency can be risky, but we believe schools have more to gain than to lose.

Recruiting and retaining outstanding faculty

It’s not a secret that great teachers make great schools. Schools that are able to successfully recruit and retain excellent faculty stand the greatest chance of being excellent educational institutions. It’s worthwhile to explore in depth three areas that can be combined into one compensation strategy that we believe will help your school recruit and retain great faculty: non-linear raises, salary scales and bands, and merit pay.

Non-linear Raises

Teachers who feel there is little room for economic advancement in your school will likely look elsewhere. Teachers are eager to seek opportunities in different schools because of the financial benefits they perceive in making the move. And they’re usually correct. While those teachers can typically expect a small salary increase (usually 1-3%) if they stay at their current schools, they can expect a large percentage raise, usually 5-10% or greater, if they move to a new school.

For example, after three years of teaching, Sarah earns $45,000 at the school that first hired her when she finished her master’s degree. In her fourth year at the same school, she might expect to earn $46,350 (assuming a 3% increase). However, if Sarah were to move to another school, our data show it is likely that she would earn $49,000 or more. School leaders indicate that above all else they value experience, making Sarah’s experience highly valuable to other schools. It should be valued at her current school as well.

To address this, schools might consider non-linear wage increases. While salary might increase at a known rate from year to year, milestone years could be marked with outsized increases. For example, during her first three years, Sarah could expect an increase of about 3%. Then, between years 3 and 4, she would receive between 5 and 10% to maintain a salary commensurate with what she could earn were she to move schools. Her annual increase would drop back down for the next few years, but would jump again at year 6 or 7. This is how most public school districts operate their salary scales.

Salary Scales

Teachers want to know what they could earn in your school based on their training, experience and workload, and they want to know that they’re being compensated fairly relative to others in the school as well as the field. A salary scale can help make this information transparent.

A salary scale consists of “steps” through which a teacher advances at a known rate based on known criteria, usually years of experience and degrees earned. For example, a school may have a 15-step scale ranging from $35,000 to $52,000 for teachers with a bachelor’s degree and $40,000 to $62,000 for those with master’s degrees. Another level may exist for those with additional advanced degrees or rabbinic ordination. Teachers advance one step on the scale automatically from year to year based on a fixed percentage increase (in this case, 3%) and the non-linear jumps we described above. In addition, teachers can jump from one level to the next by earning degrees during their tenure. Occasionally, the school board should review the scale and make a percentage improvement to the entire scale to keep up with cost of living increases.

Merit Pay

A few other steps are necessary to ensure that this system addresses any perceived drawbacks. First, specialized training and knowledge must be factored in. This is especially relevant in an age when online and blended learning have democratized access to specialized training in areas like educational technology, school leadership and curriculum design, among others. More importantly, a salary scale that promises automatic advancement rules out recognition of praiseworthy practice or, on the other hand, sub-standard performance. Within a strict salary scale system, no financial incentive exists to perform well or grow professionally aside from earning degrees.

One way schools might seek to address these lacunae in the salary scale system is through merit pay. In a merit pay system, schools identify performance tasks and learning objectives that earn stipends within the salary scale. So, for example, if Sarah received stellar reviews on her semi-annual evaluations during the year, she might earn a $500 stipend in addition to her step increase. This performance stipend may be earned each year, but would not automatically become part of Sarah’s base salary. If Sarah were to earn a certificate in blended learning, this might be awarded with a $750 stipend that would renew each year automatically much like the extra compensation she receives for her master’s degree.

The teacher learning curve also complicates the salary scale. Many are familiar with studies that have shown that teachers’ growth is most significant in their first five years in the field. This growth rate begins to taper off after year five, becoming relatively flat after year ten. In other words, a teacher in her 7th year might be as competent and valuable to a school as a veteran of 12 years, but her compensation in the salary scale described above would not reflect this.

An elegant way to address these drawbacks is to create a series of salary bands. As Sorrel Paskin has pointed out in his white paper Consideration of a Faculty Rank System to Replace the Faculty Salary Schedule System” (available on the PEJE website), the creation of bands of teachers by “rank” allows schools to fluidly move teachers from band to band based on a mosaic of factors, rather than just years of experience. Readers are highly encouraged to read Paskin to better understand his system. Paskin’s model may be modified, if appropriate for your school, by layering the bands so they overlap rather than leaving salary gaps between them.

Simplified salary negotiations and getting the most from your faculty

Creating and publicizing a salary scale (or bands) provides faculty with a known trajectory for their earning potential at your school. It also ensures that faculty compensation is not subject to arbitrary decisions about perceived value.

Salary offers to potential faculty and conversations with existing faculty are both simplified because every salary decision is based on years of experience, degrees earned and specifically described competencies. When salary increase requests are brought up, they present an opportunity to discuss faculty growth and opportunities for leadership.

For example, if Sarah were eager to increase her earning in the school, her school leader could take out the document describing the bands, talk about where Sarah currently falls and what her duties are, then speak about where she’d like to be, what behaviors she’d need to demonstrate, and the duties she’d need to accept in order to be accepted into that band. In this model, salary negotiations cease to be about feeling valued and justly compensated, and center instead on professional growth and advancing the school.

As your single largest budget item, faculty and staff compensation deserves the serious attention of a school’s professional and lay leadership. When combined with other best practices in faculty management and educational leadership, transparent compensation practices can go a long way in helping our schools recruit and retain top-quality faculty, which ultimately is best for our children.

Maccabee Avishur is associate director for teaching and learning at the YU School Partnership. avishur@yu.edu
Shira Heller is assistant director for professional development at the YU School Partnership. seheller@yu.edu

Dina Rabhan is director of recruitment and placement at the YU School Partnership. rabhan@yu.edu

SIDEBAR

Further Reading and Resources

Correlations between teacher salary and teacher quality: Figlio, D. “Teacher Salaries and Teacher Quality.” Economics Letters, 55(2), 267-271

Different rewards for different employees: http://www.yuschoolpartnership.org/school-leadership/leadership-development/107-articles/1706-current-thinking-in-compensation-structures
Salary bands: http://peje.org/old/docs/facultyrank.pdf

 

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Money Matters

Money of course does matter, in myriad ways, to the functioning of our schools. Just as important are the perceptions about money that circulate among stakeholders: How do funders decide where to put their money? What do employees think and say about salary and work conditions? How do parents and prospective parents understand the school's value? What are the explicit and implicit messages students learn about money? Authors present guidance and reflections on the systems of day school finances while exploring the questions around school value.

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