Policy Documents

A Better Way to Pay: Five Rules for Reforming Teacher Compensation

Jason Richwine –
April 24, 2012

Despite ongoing debates over teacher pay, merit pay systems, and pension benefits, there is broad agreement that teacher pay should be designed to recruit and retain the highest-quality teachers as cost-effectively as possible, writes Jason Richwine in this backgrounder for the Heritage Foundation. Policymakers should focus instead on performance pay rather than pay raises for all by easing restrictions to entering the teaching profession and basing tenure decisions on performance. Value-added models help to identify the best teachers, but they should be used cautiously alongside other performance-based measures. Retirement benefits should take the form of 401(k)-style plans to avoid the cost overruns and irrational retirement incentives traditional pensions create.