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Short term Performance Incentive programs
(PIP) (usually a year in length) focus on targeted workplace outcomes. Workplace outcomes
can be measured in terms of improvements on state student assessment scores, SAT/ACT
scores, graduation rates, student participation in activities, customer (i.e. students,
parents, community) satisfaction surveys, or operational issues such as submitting
quarterly financial reports and correcting any deficiencies in the audit recommendations.
The possibilities are endless. Long-term incentives tend to focus employee efforts on
long-term organizational goals and objectives. Typical
performance incentive systems set 10% to 20% of base salary as the performance incentive.
Specific measurable goals are established and a dollar amount or weighting is assigned for
each goal. The "weighting" of the goals should reflect the district’s* organizational priorities. The specific parameters of the
goals are quite important. Goals should reflect district plans incorporated into the
Consolidated District Improvement Plan (CDIP) and the School Improvement Plans (SIP) and
the annual district/superintendent goals.
There are generally two options for developing a
performance incentive program. First, the performance incentive may be a bonus program
where a one-time payment over-and-above the base salary. Second, a pay-at-risk program may
incorporate a portion of the base salary into the actual incentive program. For example, a
pay-at-risk program may start with 95% of the base salary with a maximum performance
incentive of 120% of base salary. Thus 5% of the person’s salary is
"at-risk" if targeted work outcomes are not met. This system allows for a bonus
payment when the objective is exceeded. The board needs to determine whether to use a
pay-at-risk format or a bonus program. For an initial program, I would recommend the
simplicity of the bonus program format.
The program should be simple and easy to understand. One
of the reasons that incentive programs fail in the private sector is that they are not
clearly understood by the participants. Since this program is new to the district, three
to five objectives should help keep the focus on the issues that matter most. The
setting of the actual objectives should be viewed by the board and the superintendent as
both attainable and objectively measurable.
* Incentive Performance
Programs for administrators, on the other hand, should reflect building goals. This
performance incentive program can be easily adapted for building principles.
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