"It would be intellectually dishonest to suggest that schools can imitate the flexibility that businesses have while retaining the burden we require of our public institutions," Rosenblatt writes.

Having spent two decades working in the private sector before running for our local school board, I was unaccustomed to a school district’s degree of openness. Like most public agencies, ours is essentially an open book—all of our board meetings are held in public (with limited exceptions), all of our contracts are public, vendor bidding is public, all decisions are made public, and all employees’ salaries are public.

That makes a lot of sense, doesn’t it? We use tax dollars as our main source of income. We are stewards and trustees of these taxpayer dollars. And we must hold ourselves accountable to the taxpayers for the prudent use of that money. We must be transparent. There are only a few exceptions allowing for secrecy, including areas such as student discipline, employee discipline, and discussions of lawsuits.

For me, transparency took some getting used to, as business interactions are by and large secret. Secrecy allows businesses to shield the “sausage making” process from their stakeholders, make decisions much more quickly, and pick and choose which information to make public or even disclose to their own employees. Through my straddling of both the private-sector and public-sector worlds, I have noticed that most people don’t think through the implications of these fundamental differences on how an organization can be managed. Although these contrasts should not be used as an excuse to defend poorly performing public institutions or public representatives, simply saying “just do it the way business does it” ignores reality. There is a fundamental difference between learning from private organizations and copying them.

For more articles by Seth Rosenblatt, see:

Why education is not like business

The education competition myth

And for more news and opinion on education reform, see:

Beyond ‘Superman’: Leading Responsible School Reform

Take, for instance, how we compensate employees. As most people know, most public schools pay teachers on longevity, and potentially their advanced degrees and training. This is what is usually referred to as the “step and column” schedule. This compensation structure ignores what most would think of as the more relevant criteria, such as employee skills, competency, their amount of work and responsibility, and the supply and demand realities of their specific role. Although this is not the only area of criticism of our public schools by parents and other community members, compensation philosophy ranks as one of the highest.

When most people in the education establishment are asked why it’s so difficult to compensate public employees in a differentiated way more akin to private companies, you often hear a number of answers.  Some point to union resistance, while others note the difficulty of coming up with meaningful and objective measures of performance not subject to political pressures. While there might be some truth to these arguments, I believe they can be overcome. Those are not the fundamental problems.

So what is, then? I will posit that the problem is indeed our openness. For any of you who work in a private-sector company, let me give you a scenario. You wake up for work tomorrow morning, open the newspaper (or view your company website), and every single employee in your company is listed along with their compensation. Any manager or HR director would tell you that it would render the company dysfunctional almost overnight.

Sure, there are exceptions to every rule, and certainly there are companies out there (probably small ones) where everyone knows everyone else’s salary. And even sometimes this information leaks out. And yes, the top earners in publicly traded companies are disclosed. But this is all a small minority.

The ability for any leader to manage his or her team is premised on the concept that he or she can differentially pay each employee without any other employee knowing what others make. Imagine the company “politics” that would ensue if this were not the case. I’ve mentioned this hypothetical scenario to a number of managers and company owners—there wasn’t much that has scared them more. I will concede that often workers in the private sector have a good sense of what their co-workers make, but that is a major difference from knowing what they make. “Wait, I’m better than Johnny, how come he makes more than I do?” The psychology is just too strong for we flawed humans.

Now, let us return to our public schools. Our staff has always had this scenario. Everyone knows what everyone else earns. But, unfortunately, it’s worse than that. The intimate relationship between schools and their “customers” (students, parents) adds another twist to the story. Parents often have a sense of who are the best (and maybe worst) teachers, but they don’t really know. Schools already often have to deal with the difficulty of aggressive parents requesting their child be placed in a certain class, or parents second-guessing their child’s teachers. Imagine if we broadcasted the information on which teachers are best?

If we pay on merit (which I would argue is a good thing to do), we now can easily tell that Ms. Smith is clearly the much better teacher than Mr. Jones, as Ms. Smith makes $80K per year while Mr. Jones only makes $50K per year. Can you picture the stampede of parents into the principal’s office when little Billy or Sally gets assigned to Mr. Jones’s class? This would pit parent against parent, employee against employee, and make it even harder to run an effective school.

For more articles by Seth Rosenblatt, see:

Why education is not like business

The education competition myth

And for more news and opinion on education reform, see:

Beyond ‘Superman’: Leading Responsible School Reform

So, one could say that our current system of paying someone based on his or her longevity—a metric that is both objective and meaningless—is one of the few alternatives that allows us to keep a functional organization while having complete transparency. It’s hard to argue with the metric of how many times the Earth goes around the sun.

Although it is true that some younger teachers resent some of the older ones who they might think are not performing as well as they are, at least they’ve accepted the fact that their lower salary doesn’t reflect on their ability or contribution per se. In an environment where we know how much we each make, any measure that suggests something about my ability versus yours carries that psychological baggage.

But as I said, I don’t like the current way we pay public school employees. So, how do we balance the need for transparency with the need to effectively manage our organizations? There are perhaps a few middle-ground alternatives that, although not perfect on either measure, could work well alone or in combination:

  • Add more emphasis on stipends for extra responsibilities. Many districts, like ours, pay teachers (and other employees) stipends for taking on extra work. It’s hard to get too mad at your colleague who gets paid more if he or she does more to earn that money, assuming the opportunity might be open to you as well.
  • Create multiple career paths for employees. Some districts have begun to experiment with more paths for “master teachers,” “mentors,” or other classes of employees. With these paths could come requirements and additional responsibilities, and with that more pay.
  • Decouple employee reviews from pay. A separate (but related) problem facing many school districts is the lack of meaningful employee evaluations. Some of this is owing to resources, and perhaps some of it to union resistance, but I would postulate that reform in this area is hampered by the fear of linking reviews to compensation (knowing the latter will be made public). Although I would prefer them to be linked, even if we had to pay all employees on objective and “meaningless” metrics, it would still make a huge difference to implement a strong and meaningful review system that acknowledged great performers, gave regular feedback to all, provided support to improve performance, and ultimately removed poor performing employees from the organization.
  • Sacrifice a little openness. This might be sacrilege for some, but my thesis is that making everyone’s salary public shackles our ability to “act like a business,” while at the same time it does little to promote transparency. We want to be strong stewards of taxpayer dollars and accountable to the public, but does the public really need that level of detail? What if school districts published a range of salaries based on class or career path, or even published the total compensation by school, grade, subject, or some other category? The taxpayer would still know how much money was going to a certain service or program, but not in a way that would disrupt the ability for a school district to implement a meaningful differential pay system. We could preserve disclosure of the salaries of top administrators in a school district (just as public companies disclose compensation of top officers), as they largely have no peers within the organization against which to compare themselves.

We must recognize that no system—even in the private sector—is perfect. People will be people, and even in well-designed review and compensation systems, there are a myriad of problems. Some teachers today get upset at others who receive stipends for extra work. There might always be accusations of unfairness. People might still have a good sense of who are the top and lagging performers and have ill feelings toward each other. At the dozen or so private-sector companies I have worked for in my career, I have never witnessed one devoid of these organizational issues. But there is no comparison between these normal issues of organizational dynamics and the wet blanket of full compensation disclosure that we have thrown on top of public enterprises.

For more articles by Seth Rosenblatt, see:

Why education is not like business

The education competition myth

And for more news and opinion on education reform, see:

Beyond ‘Superman’: Leading Responsible School Reform

Teacher pay (and how schools manage their employees in general) has perennially been a controversial issue. Much of the criticism of schools’ historical approach to this problem is well deserved. But we must peel back the onion and understand all of the implications of “reform” measures. And it’s not just about the fact that change is hard, and that there is inertia in the current system. Yes, those are true, but we can make changes. However, we must recognize that, as society, we have placed a unique burden on public institutions in the name of transparency.

It is perfectly reasonable to argue that this is just the price we pay, and that having items like salaries disclosed publicly is of a higher value to the taxpayer than giving the organization greater flexibility in compensation. Some even argue that disclosure requirements should be made stricter—after all, we need to prevent another situation like what happened in Bell, California, don’t we?

However, it would be intellectually dishonest to suggest that schools can imitate the flexibility that businesses have while retaining the burden we require of our public institutions. Let us have the discussion as to what tradeoffs we’re willing to make.

Seth Rosenblatt is the president of the San Carlos, Calif., school board, and he is also the president of the San Mateo County School Boards Association. For his day job, he is a strategy and marketing consultant for technology companies.