Cite this report
Saenz-Armstrong, P. (2022). State of the States 2022: Teacher Compensation Strategies. Washington, D.C.: National Council on Teacher Quality.
Saenz-Armstrong, P. (2022). State of the States 2022: Teacher Compensation Strategies. Washington, D.C.: National Council on Teacher Quality.
Salaries are one of the most powerful policy levers states and school districts can use to attract qualified, effective, and diverse teachers. However, strategic pay remains underutilized as a tool to attract teachers to the schools or subjects that are traditionally harder to staff.1 Similarly, few states have policies that consider performance in salary schedules or reward prior relevant work experience in order to attract career switchers to the teaching profession.
Most states (29) leave it up to individual school districts to set their own salary schedules, but in 13 other states, the salary schedule is determined by state authority. In the remaining nine states, the state sets the minimum salary a teacher must earn.
State policies on teacher salaries play an important role in district implementation. The state policy sets the framework for the local design of salary schedules that can help secure a high quality teacher workforce—or create barriers—and states can also provide funds for districts to use additional pay to offer incentives targeted to district needs.
Thinking strategically about salaries is critical. Compensation in the public K-12 education sector is typically set by a bargaining agreement or policy a year in advance or for multiple years at a time, and therefore it is often slow to respond to the pressures in the teacher labor market.
What role do states play in supporting strategic use of salaries? This report examines the state teacher compensation policies that influence districts’ potential strategic use of teacher pay. We analyzed three types of state policies that aim to attain three purposes:
With the influx of federal Elementary and Secondary School Emergency Relief (ESSER) funds, some states have designed new or expanded already existing initiatives aimed to attract or retain teachers to hard-to-staff positions. The analysis in this report includes these state strategies, while acknowledging that they might only remain in place temporarily while ESSER funds remain available.
It is no secret that better pay attracts teachers to hard-to-staff schools2 or subjects.3 Recent research found that providing teachers with a bonus to teach in high-poverty schools in Washington state improved hiring and reduced turnover in the schools eligible for the bonus.4
Other research found that selective retention bonuses for highly effective teachers in low-performing, high-poverty schools resulted in greater numbers of those teachers in the participating schools than in similar non-participating schools, as well as greater test score gains for students in the years following the bonus program, especially on state reading exams.5
Given the potential positive impact of monetary incentives6 on student learning, this section examines how state policies support differentiated pay to attract teachers to hard-to-staff schools and subject areas.
Utah’s school districts offer some of the largest bonuses to effective7 teachers in hard-to-staff schools or subjects among our sample of the largest districts in the U.S. Through the state’s “Effective Teachers in High Poverty Schools” program (ETHPS), a district can apply on behalf of an eligible general or special education teacher in grades K-8 to earn a bonus up to $7,000 annually. The district and the state board of education each pay half of the bonus.
In West Virginia, beginning in 2019, teachers who teach math and special education are given three additional years of experience in calculating their salary on the state’s salary schedule. State policy also allows districts to provide “additional compensation or other financial assistance” to teachers who teach in subjects for which the district has a critical need and shortage of fully certified teachers. West Virginia also offers a loan assistance program to teachers who agree to teach a subject area of critical need or in a school or geographic area identified as an area of critical need. Each teacher is eligible to receive up to $3,000 annually, for a maximum of five years, for a total available award amount of $15,000. The state also offers tuition reimbursement for teaching in shortage-subject areas.
In Connecticut, incentives to teachers do not come in the form of differentiated pay, but rather in the form of mortgage assistance for those seeking to become homeowners in the communities where they work. Teachers in districts identified by the state as “Priority”8 or “Transitional,”9 or those who teach in one of the subject-specific shortage areas, may be eligible for a below-market-rate mortgage loan, or even down payment assistance loans.
The effect of performance-based teacher compensation on student achievement is well documented, showing not only concurrent gains in student achievement, but also positive long term effects in education, employment, and earnings.10 There is also evidence that compensation that rewards performance has positive effects on the achievement of students in hard-to-staff schools11 due to the increased retention of highly effective teachers.12
Performance pay plans also help districts recruit high quality teachers. Research shows that, on average, school districts that adopted pay for performance hired new teachers who had graduated from colleges and universities with average SAT scores that were about 30 points higher than new teachers hired by districts that didn’t adopt performance pay.13
Although concerns over teacher evaluation methods have limited the implementation of performance pay, recent research on years of teacher evaluation implementation has identified aspects of teacher evaluation that support identification of high performing teachers14 and increase teacher satisfaction and retention.15 Yet across the nation, compensation is still largely determined by advanced degree attainment and teacher seniority, which beyond the first few years have not been found to consistently correlate with student achievement.16
Fortunately, states have an opportunity to influence new types of salary structures and which factors are considered in determining salaries.
Funding, specificity, and accountability are the elements in a state’s legislation that appear to play a role in whether performance pay initiatives that look good on paper are actually implemented and the extent to which they adhere to the law.
For example, Michigan and Utah laws explicitly require the use of performance and prohibit the use of experience in determining teacher compensation, though districts in both states still use traditional step and lane salary schedules that reward years of experience.
Utah’s legislation on additional pay for teacher effectiveness is limited to high poverty schools, and the role of effectiveness is limited to deciding whether or not a teacher advances along the salary schedule—in most cases a “satisfactory” rating will qualify a teacher for advancement.
Michigan has performance-based compensation requirements, but the application in Michigan school districts varies widely. Recent research findings as well as an analysis of a random sample of district collective bargaining agreements in Michigan found the traditional step and lane salary schedules remain in full use in the vast majority of districts we analyzed. State education agency representatives indicated to us that they do not collect data on district salaries, and therefore it is not possible to evaluate districts’ implementation of the law. Some Michigan school districts offer their high performing teachers small bonuses, with compensation largely determined under traditional schedules, while other districts make advancement through the salary schedule steps conditional to demonstrating a minimum level of effectiveness. In most district agreements, mention of pay for performance is entirely absent.
On the other hand, while policies in Florida and Texas do not prohibit the use of seniority in their districts’ determination of teacher compensation, thanks to either specific funding directed to strategic pay initiatives or specific language in their legislation, districts in those states seem to have moved away from traditional step and lane salary schedules and adopted some type of performance-based pay, although the additional pay for performance that teachers receive varies widely depending on the district.
In Florida, since July 2014, districts must use a performance-based salary schedule for new teachers, through which salary adjustments are granted in proportion to a teacher’s level of effectiveness; for example, new teachers as of 2014 who are effective must receive salary adjustments that are between 50% and 75% of the adjustments given to highly effective teachers, and teachers who do not reach any of those categories are not given salary adjustments. Districts have some flexibility in their measurement of teacher effectiveness, but they must meet certain requirements, such as a minimum of one third of the teacher’s rating based on indicators of student growth. Teachers who were employed by the district before performance-based salary adjustments were enacted have been able to choose to remain on the pre-2014 salary schedule.
Texas currently leads the way in terms of performance pay structures, by providing both funds and support to districts to develop systems and reward teachers, including supporting more objective teacher evaluations with validation by an outside party. In 2019, the Texas legislature passed House Bill 3, which includes the Teacher Incentive Allotment (TIA). The TIA provides between $3,000 and $32,000 per year per “identified” teacher based on teacher performance, and other characteristics, such as high-need areas, rural district campuses, and student population characteristics. Districts may identify teachers using their local criteria, and submit their criteria to the state for approval. At least 90% of these state-provided funds must be spent on teacher compensation. Texas districts are also required to report to the state education agency on the use of these funds and salary increases. In the 2020-21 school year, 4,617 teachers received a designation for which they were paid out over $43 million across 127 school districts.
Texas has also recently developed a new program that is aimed to give grants to districts to secure dedicated personnel or technical assistance in order to develop strategic compensation systems. This program tends to focus on smaller districts that did not have the resources to design strategic compensation systems initially.
Another example of the importance of funding is Arkansas, where the state’s Alternative Pay Program was recently eliminated. Through this program, participating schools or districts were to use “a variety of objective criteria that are credible, clear, specific, measurable indicators of student achievement, and generally accepted best practices to determine pay.”17 However, as far as we were able to establish, this program had never been funded, and therefore it had never been implemented. The pertinent code was repealed in 2021.
Wisconsin deserves special attention because it took a completely different approach from all of the previously cited examples. In 2011 Wisconsin eliminated collective bargaining requirements on the topic of teacher salary schedules. Wisconsin also makes no requirements regarding performance or seniority to be part of the teacher salary calculations. The result of the elimination of collective bargaining requirements is a mix of districts that opted for a change towards flexible pay schemes that also allowed performance-based differentiated pay and districts that opted to continue with a traditional step and lane salary schedule. According to recent research, the quality of the teacher workforce increased in the districts that opted for flexible pay schemes.
More often than not, average teacher salaries are not a match for the average salaries of professionals with comparable education in their localities,18 and that is even more true for starting teacher salaries. This makes attracting career switchers to the field of education extremely challenging. The unfavorable gap between teacher salaries and other professions often means that education only attracts career switchers who hold low paying jobs in other industries, and has been found to lower the average quality of teachers.19
State policy can help attract career switchers with prior content knowledge and relevant experience by authorizing incentives that recognize candidates’ previous relevant experience. Research has shown that those with a particular industry background or degree are more familiar with the applied field’s standards and can better identify students’ practical strengths and weaknesses in the subject.20 Observers also rank them consistently better when teaching highly technical subjects, such as engineering, math, or science.21
Louisiana supports its districts to provide compensation for related prior subject-area work experience. Districts are required to develop local compensation plans based on effectiveness, experience, and demand with no one factor accounting for more than 50 percent. Experience may include “relevant non-educational professional experience related to the teacher’s content area.”
North Carolina teachers are awarded one year of credit, for salary purposes, for every two years of “full-time relevant non-teaching work experience” prior to earning a bachelor’s degree and one year of experience credit for every year of “full-time relevant non-teaching experience” after earning a bachelor’s degree. “Relevant non-teaching work experience” is defined as professional work experience in public or private sectors that is directly related to the individual’s area of licensure and work assignment.
Indiana allows districts to make salary adjustments based on the need to attract an individual with specific qualifications to fill a teaching vacancy. Note that the related policy indicates that boards of education “may” adopt differentiated compensation for specific qualifications. The same is true for the state of Kentucky, which begs the question of whether districts are indeed implementing this type of strategic compensation.
Finally, the state of Washington recently eliminated the language from their laws that enabled districts to recognize up to six years of prior experience in determining the school district salary for career and technical education teachers.
Although teacher compensation is set by individual school districts in most states, states have an opportunity to establish the framework within which districts can make use of strategic pay, and could promote flexibility often lacking in rigid salary schedules, in order to attract the teacher talent needed to address local school district needs. Therefore, when considering strategic pay policy, states should take into account the following recommendations:
Dr. Patricia Saenz-Armstrong
Dr. Heather Peske, NCTQ President
Shannon Holston, Chief of Policy and Programs
Kelli Lakis, Lisa Staresina
Nicole Gerber, Ashley Kincaid, Andrea Browne Taylor
This report is based on research funded by the following foundations. The findings and conclusions contained within are those of the authors and do not necessarily reflect positions or policies of the project funders.
Bill & Melinda Gates Foundation
Daniels Fund
The Joyce Foundation
Walton Family Foundation
States need reliable data to effectively address teacher shortages and staffing challenges. This report reveals that many state systems for reporting teacher supply and demand remain fragmented and incomplete. Critical gaps in tracking teacher vacancies, attrition, and new entrants make it difficult for policymakers to accurately forecast shortages or tailor recruitment strategies. The report underscores the urgent need for comprehensive, interconnected, and timely data systems that link teacher preparation, certification, and employment. By improving data reporting, states can develop targeted policies to attract, assign, and retain high-quality educators, ultimately enhancing student learning outcomes.
All of our children deserve access to well-prepared teachers with a strong foundation in their subject area, the instructional skills to accelerate learning, and the understanding to support and inspire. It falls to teacher preparation programs to prepare new teachers who can enter classrooms ready to provide an excellent education to their students.
This analysis considers state trends in many of the most essential aspects of delivering classroom-ready teachers, including the qualifications for being admitted into teacher preparation and earning a teaching license, with a focus on states’ shifting testing regimes. It also examines states’ activities to diversify the teacher pipeline and improve the quality of clinical practice, and offers specific recommendations for actions state policymakers can take to ensure a strong, well-prepared teacher workforce.
Students in high-need schools deserve equitable access to effective teachers, yet persistent disparities in teacher quality continue to undermine educational outcomes. Federal law requires that states report on how students from disadvantaged backgrounds “are not served at disproportionate rates by ineffective, out-of-field, or inexperienced teachers.” This report shows that few states report on all three measures of quality, that they vary widely in how they define these measures, and that the data is insufficient to understand disparities at the school or even district level. Shoring up these gaps in data reporting is essential so that states can first determine and then address inequities in students’ access to effective teachers.