Performance Pay Hits NYC

Big news in Gotham City today as Mayor Mike Bloomberg, Chancellor Joel Klein, and United Federation of Teachers president Randi Weingarten announced a massive school-based bonus pay for performance plan. Early NY Times coverage is here.

It is potentially the largest performance-based pay scheme anywhere. It will be privately-funded (Eli Broad, Julian Robertson, Partnership for NYC) and principals/teachers will have to vote on whether to participate. Seriously, they are required to vote on whether or not they want the extra cash if their school improves.

The money (the equivalent of $3,000 per teacher) is disbursed to the school, where a compensation committee at the school decides how much everyone actually gets. (I previously worried about the ability of the central bureaucracy to handle merit pay when it often seems to have trouble handling lock-step pay, so I like the decentralized approach and the fact that members of the team play such a major role in deciding how it gets spread.)

The bonuses are on top of negotiated pay scales (which have increased more than 40% since Bloomberg became mayor.)

Perhaps more important than the details is the huge breakthrough today's announcement represents in terms of making quality and results more relevant in the nation's largest school system.

Kudos to Bloomberg, Klein, Weingarten and the funders.