Teachers’ Remuneration SystemsThe educational policy context. Sofia, 2006.

1. Teachers’ Remuneration Systems
The educational policy context
Péter Radó
Director
Center for Educational Policy Analysis, Hungary
OPEK

2. Skeleton of the presentation
1. Teacher policy
• Underlying assumptions
• The key areas of Human Resource Management in education
2. Teacher salary systems and the managamenet and
allocation of financial resources in education
• Who pays the teachers?
• Salary scales: basic questions to be considered
3. Performance related pay systems
• Possible objectives and claimed benefits
• Types of performance related pay
• Possible disadvantages
• The basis for differentiation
Hungary: context, the past and future plans

3. Teacher policy: a few underlying assumptions
As goals are changing in education the required teacher
competences are changing, too – there are huge expectations
toward teachers
Only the self-development efforts of the schools can improve
the effectiveness of education – this requires
empowerment based policies. (School autonomy)
Key competences are emphasized (not subject knowledge) – the
whole schools are in the center of development and not
individual teachers – co-operation among teachers and
organisational competences are moreand more in the
center (school as a learning organisation)
Whole schools should be hold accountable, ensuring teachers’
accountability is a managerial task in schools.
Incentives, mandates (standards and other regulations) and
external support is more and more tailored in this way.

4. Teacher policy: human resource management
in education
Basic areas of HRM (Other components of the „package”):
• The rules and content of work
• The flow of human resources
• Performance management
• Compensation, incentives
• Capacity building, development
Major types of HRM systems in education (The context):
• Continental (career-based) systems (France, Germany) –
changes are more easily implemented, rigid system
• Anglo-Saxon (position-based) systems (Hungary, Scandinavian
countries) – implementation of any change is difficult,
flexible system

5. Management, allocation of financial resources
and teacher remuneration systems
Who is in charge? (The level of decentralisation):
• Employment
• Organisational goals, tasks to be performed
• The way and criteria of performance evaluation
• Compensation
• Professional development
Salary scales:
• The difference between minimum and maximum (high at the
beginning: fosters recruitment, high at the end: rewards
expertise)
• What is paid for: basic salary for contact ours plus
compensation for other tasks – basic salary on the basis of
broad definition of work (all working hours per week)

6. The allocation of financial resources: Germany

7. The allocation of financial resources: Bulgaria

8. The allocation of financial resources: England

9. The allocation of financial resources: Hungary

10. Performance related pay systems: objectives
General objectives: to recruit, retain and motivate teachers.
• Evidences for each objectives
Possible specific objectives (those are relevant in education):
• Making managers responsible
• Getting better value for money
• Changing the culture of the school
• Encouraging greater accountability
• Strengthening the relationship between individual and
organisational goals
• Enhancing job satisfaction

11. Types of performance related pay
1. Proceeding more quickly up an incremental scale (salary
scale is rigid = no space between minimum and real salaries)
2. Employers are paid between 80% and 120% of a midpoint
(salary scale determines the mass of resources for
remuneration and the individual midpoints)
3. A performance related increase to the whole teaching staff in
addition to the basic salary (salary scale is rigid and sets the
minimum individual payment)
4. 0-20% salary increase only for individual performance at the
discretion of the director (salary scale sets the minimum
payment)
5. Combinations

12. Disadvantages of performance related pay
• Neglect of unrewarded tasks (the complexity of teaching)
• Disagreement about goals
• Lack of opennes
• Costs
• Demotivation of the unrewarded
• Competition instead of co-operation

13. The basis for differentiation
Teachers’ performance: assessment or evaluation
• Are there measurable outcomes?
• The basis for differentiation – the performance of the school or
the individual teacher?
• Instruments of performance evaluation of teachers – best
practices
Alternatives to performance related pay:
• Salary supplements for additional organisational tasks
performed (mid-layer of school management: form masters,
heads of subject teacher groups, etc.)
• Salary supplements for additional pedagogical tasks performed
(integrated teaching, teaching disadvantaged teachers or
in priority area schools, etc.)
• Promotion on the basis of further qualifications or as a reward

14. Warning: the Hungarian context is different!
• The Hungarian allocation system finances tasks performed in
schools, the Bulgarian system finances the operation of
schools (It’s harder to connect performance and funding)
• The institutional autonomy in Hungary combines professional,
organisational and financial management.
• In Hungary there is no institutionalised inspection, external
evaluation and self-evaluation are separated, there is no
external inspection of the performance of teachers.
• Assessment and external evaluation are aiming to hold the
entire school accountable, not the individual teachers.
• The performance of the teacher is not considered measurable,
but performance evaluation instruments are more and
more widely used.
• The salary scale does not contain fixed salary figures
(multipliers), the compensation of teachers is a three layer
system: basic salary, task related supplements, space for
differentiation.

15. Hungary so far
• 1985: school autonomy and the abolishment of state inspection
• 1990: Schools are taken over by self-governments, emerging
private sector in education
• 1997: A failing attempt to create space for differentiation
• 2000: The new students’ performance assessment system and
the introduction of quality management in schools.
• 2002: 50% salary increase, as a consequence financial space for
differentiation disappears and the introduction of
promotion ladder for teachers drops out from the policy
agenda.
• Since 2002: increasing public financing crisis due to the
declining cost-effectiveness of education

16. Hungary: plans for the future
• Reduction of specific costs of education (i.e. reducing the labor
need of services + promoting the mobility of teachers)
• The development of performance management system in
Education: formative and summative assessment, harmonized
external evaluation and school evaluation, national indicators
and public feed back of information.
• Making the use of any performance evaluation instruments
mandatory in schools
• Introducing promotion ladder for teacher (induction period,
professional examination for full teacher status, „mentor”
(senior) teacher status.
• Differentiated school based specifications for the content of the
work of teachers („job descriptions” for the 40 working
hours)
• Long-term teacher compensation policy to create space for
differentiation.