Teacher compensation models – Term Paper

Teacher Compensation 

Teachers’ services are usually rewarded based on two main aspects: years of experience in teaching and advancement in education which is through the acquisition of university credentials that are beyond the teaching certificate. Hence, the payment schedule system is either the skilled based system or person-based system. From the exhibit in the textbook, it is easy to analyze differential in increased seniority versus increased education, messages sent to teachers’ by the differential, the theories that address the differences, implications of the compensation strategy on teachers’ behavior and school district costs.

Skill-Based System

The pay structure in the case study is probably a skilled based system. The reason for this is that skilled based system focuses on a teacher’s level of education in controlling their salary (Milkovich, G., Newman, J., & Milkovich, C.,2002). Thereby, the teacher’s performance or salary trends, in general, have no contributions on the teachers’ pay or moving up in the pay scale. Also under the skilled based system teachers are encouraged to advance in their level of education by receiving monetary compensation so as to improve their performance and effectiveness in their roles. The system not only focuses on compensating on the level of education but also compensates on the years of experience. According to the case study, Jane is a bachelor degree holder with no experience. Hence, she will fall in group III due to the degree and as years goes by her salary will increase since she will be gaining experience. Nonetheless, she can decide to further her studies to acquire a master’s degree or become a specialist in a subject then she can move to group iv, and this also leads to an increment in her salary.  

Hire a custom writer who has experience.
It's time for you to order amazing papers!

order now

Person-Based Structures

Person based structures also known as competency structure, is based on the characteristics of a teacher which entails knowledge, skills, and behaviors that determine performance. Competencies are independent of the job thus meaning an employee can transport them from one job to another (Dubois & Rothwell, 2004). According to the exhibit to make it look like person based structure the years of experience can be replaced by acquired skills. Rather than focusing on the level of education and experience, the pay schedule should emphasis on how the employee performs with regards to competencies such as attention to details and leadership skills. Thus, less experienced employees will also have a chance to be on a higher level on the pay structure.   

Another aspect that needs to be changed in order to change the salary schedule to be more like person-based pay structure is the level of education. Rather than using the level of education, the pay structure should consider how well the teachers perform and how much they contribute to the institution (Dubois & Rothwell, 2004). This method allows the teachers to take greater initiative to improve on their skills and performance hence contributing to the institution’s competitive advantage. As opposed to the skill-based pay structure, the person-based pay structure offers tangible rewards to employees dedicated to improve themselves and will be motivated by the compensation they get for their dedication. 

Overview of the Pay Structure for Teachers

According to the exhibit, taking more courses seems to be paying better than seniority. The ‘jumps’ from years of experience the difference in salary remains nearly constant regardless of the level of education: a difference of either 3,000 or 2,000. On the other hand, the “jumps” from group I to II and group III to group IV have a difference of roughly 3000 or 2000. However, the size of compensation exponentially increases when a teacher moves from group II to group III. For instance, in step ten the difference is 13,593. The system sends two messages to teachers. First, they can be compensated when they advance in their education. Secondly, they can just sit and do nothing and still be compensated over time. According to the expectancy theory, the quality of employees’ work is proportional to the compensation they expect to receive. That is if, employees perceive that their pay would be fair, then they will work hard to meet the desired outcomes (Milkovich et al., 2002). On the other hand, if they perceive that the compensation does not match their efforts, they will not work hard. The compensation strategy influences the behavior of the teachers in several ways some will be motivated to become better teachers while others will be motivated by the pay whereas others will be lazy because they do not see the need to take classes, and still they will be rewarded. The school board can use the compensation strategy to help in assessing teachers’ performance based on the performance of the class.


The compensation system is offsetting the motivational effectiveness due to its mixed messages. Teachers should not be allowed to move up the seniority pay scale, based on their acquired knowledge. The system can implement the following four changes. First, group I teachers seniority pay level is up to four years. Second, on reaching group II, the teacher may move up to the six-year pay level. Thirdly, on reaching group III, the teacher may then move up to the eight pay level. Lastly, upon reaching group IV, there is no restriction on the teacher’s movement through the seniority pay scale. The changes will send clear message that advancing in one’s education is important but remaining stagnant and not committing to personal education will not be compensated.


The pay structure in the exhibit has outlived its effectiveness since it fails to identify an individual basis, the skills, the responsibilities of a teacher and the level of difficult. While the system rewards teachers by additional education and years of experience, it does not provide an incentive to teachers who increase their performance as a result of the advanced education. Pay is simply for credentials and seniority and not the effectiveness of teaching. 


Dubois, D., & Rothwell, W. (2004). Competency-Based Human Resource Management: Discover a New System for Unleashing the Productive Power of Exemplary Performers. Nicholas Brealey Publishing.

Milkovich, G. T., Newman, J. M., & Milkovich, C. (2002). Compensation (Vol. 8). T. Mirror (Ed.). New York: McGraw-Hill.