Paying Teachers for Performance: Issues and Dilemmas for Rural Schools, Teacher Tenure

Last Updated: July 29, 2011

This article appeared in the July 2011 Rural Policy Matters.

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The Role of Teacher Tenure in Pay-for-Performance Initiatives

The idea behind Pay-for-Performance — also called performance, incentive, or merit pay — asserts that workers will be more productive if they receive extra pay for producing results: strong workers will be rewarded, while weaker workers will improve or leave the profession.

The first installment in the RPM occasional series on performance-pay introduced the topic and identified some of its key components. In this installment we explore the issue of teacher tenure and how it relates to performance-pay. The topic is especially current because a number of state legislatures changed their tenure laws in the 2011 sessions.

What is Teacher Tenure?

Tenure is a job status that provides due process rights to the worker. Traditionally, teachers only earn tenure after they have worked for a specified number of years and have been recommended for tenure by their administrators and approved by the local Board of Education. Tenure laws protect teachers from being fired (and in some cases demoted) for personal, political, or arbitrary reasons. Tenure does not, however, provide a perpetual job guarantee. Tenured teachers can be fired for many reasons, but the school district is usually required to document those reasons. In most cases, tenured teachers can appeal a dismissal to a designated third party.

In some states, tenure policies are negotiated at the state level and provisions apply in all school districts. In other states, tenure is negotiated as the district level and there may be significant variation in policies from district to district.

Tenure has come under fire in recent years from critics who often claim it prevents districts from getting rid of weak teachers, makes the process of firing teachers unnecessarily cumbersome and expensive, and removes incentives for tenured teachers to improve. Tenure defenders usually claim that weak teachers who fail to improve should and can be removed from the classroom if administrators do their jobs.

What Does Tenure Mean in Rural Districts?

The impact of tenure is often different in rural districts than in urban districts. For one thing, tenure can provide needed protections in communities with histories of discrimination or corruption where teachers are especially vulnerable to being fired for reasons that have nothing to do with their teaching abilities, things like reprimanding a politician’s child or standing up to a school board policy. The small size and interconnectedness of many smaller communities can have the reverse effect as well, making it difficult to get rid of weak but well-connected teachers.

Depending on the state’s tenure provisions and funding formula, tenure can help districts maintain stability in their teaching force in the face of reduced funding due to budget cuts and/or declining enrollment.

Rural districts often don’t have the options of larger district for transferring a teacher to a different school setting where she might be more successful, which can limit both the district's and the teacher's options. The small size of many rural districts can also mean that weak teachers have nowhere to “hide” and are less able to be placed in a school or classroom where parents have little ability to fight back.

Finally, tenure helps protect more experienced teachers with higher salaries from being fired as a cost-cutting move.

How Tenure Relates to Pay-For-Performance

In the past, tenure has been granted on the basis of administrator evaluations and, in some cases, the reviews of colleagues, mentors, or parents. Critics of tenure as well as many supporters of performance-pay claim these measures are too subjective and do not necessarily relate to how well students learn.

Changes in 2011

At least a dozen states recently changed their teacher tenure laws in some fashion, in all cases making it easier to fire teachers. Several states altered tenure through bills bearing names seemingly unrelated to tenure. Alabama reduced tenure protection for teachers in a bill entitled the “Students First Act.” Idaho made drastic changes to teacher employment law, including phasing out tenure altogether, through a set of bills dubbed “Students Come First.”

States altered tenure by expanding the list of reasons tenured teachers could be removed, limiting the appeals process, and/or tying tenure — both earning and keeping it — to measures of student performance on standardized tests. Several states, including Arizona in 2009, Colorado in 2010 and Florida, Idaho, and Ohio in 2011 made drastic changes to teacher employment law, in some cases eliminating tenure for incoming teachers.

The major types of changes are described below:

More reasons to end the employment of tenured teachers. Many states added to the number of reasons a tenured teacher could be dismissed. These reasons included reduction in force due to budget cuts, declining revenues, declining enrollment, consolidation, school closure/reconstitution, and ineffectiveness at improving student achievement on standardized tests. Many states also wrote legislation that prohibits districts from using teacher seniority or tenure as a basis for making reduction in force decisions, requiring instead that districts base decisions on measures of teacher “effectiveness” based on student test score growth.

New evaluations for all teachers and “effectiveness” ratings as determined by student test scores. A number of states will require districts to evaluate teachers and administrators more frequently than in the past and to use new evaluation criteria. Most states established a council or charged an existing agency with responsibility for developing the particulars of the new evaluations. However, almost all states required that the evaluations be based in significant part on value-added measures of student "growth" tied to student test scores. 

Several states, including Idaho, Florida, Colorado, and Ohio will require that at least 50% of a teacher’s evaluation be based on student test score growth. In Minnesota and Virginia, student test score growth must comprise at least 35% and 40% of the evaluation respectively. 

In most cases, states will also require that the evaluations rank teacher effectiveness in a four or five tier system ranging from "highly ineffective" to "highly effective." 

Making tenure harder to earn and keep. Several states eliminated tenure altogether for new teachers. Most other states that addressed tenure passed measures making it harder to earn, usually by extending the “probationary” period and requiring teachers to earn an effective or highly effective rating. Most states that toughened initial tenure requirements also made it easier to revoke tenure. For example, Colorado, Indiana, and Tennessee would return tenured teachers to “probationary” status after two consecutive years of “ineffective” evaluations. Wisconsin explicitly allows districts to dismiss teachers on the basis of student test scores. 

Require pay-for-performance. Most states that changed teacher evaluation policies authorized or mandated the use of evaluations in establishing individual teacher salary levels. Several will require districts to provide additional pay to individual teachers rated “highly effective.” Idaho will place teachers in four quartiles of teacher effectiveness and pay accordingly. Missouri also establishes a percentile system and caps the percentage of teachers in each building that can be ranked in the top tiers for pay purposes.

New laws in Indiana forbid districts from basing pay raises on anything but "performance," as does Ohio's 304-page law, which also eliminates minimum salaries and "step" raises for teachers and caps the percentage that public employers may pay toward employee health insurance. Florida, which abolished tenure for teachers hired for the 2011-12 school year, will offer incentives for currently tenured teachers to give up tenure in exchange for performance pay.  

Changes in due process. Many states changed the due process requirements for teachers. Most of these changes are related to the appeals process, arbitration, review boards, and which entity has a final say in a contract dispute. Many states put time limits on each phase of the process in order to speed it up; several limit the amount of pay a teacher can receive while the case is in process. Several states will require the party that loses the dispute to cover all the legal expenses of both parties — a serious disincentive for an individual teacher to pursue the dispute; and several states give final authority in employment disputes to the local school board.

End tenure altogether. Under Florida’s law, all newly hired teachers will be work on one-year contracts without tenure. Eligibility for annual renewal will depend on the teacher’s effectiveness rating based on student test scores. Idaho will phase out tenure for all current and future teachers who have not earned it. 

Restrict Collective Bargaining. Several states changed laws governing the collective bargaining rights of teachers, in some cases prohibiting the state or local districts from including things like evaluation, tenure, and other working conditions in collective bargaining discussions. Several states also placed restrictions on teachers' ability to participate in teacher associations or unions and limited access of those associations and unions to teachers.  

What the Laws Did Not Address

No states addressed known problems with value-added measures even as they made value-added measures a part of teacher evaluations or a provision of tenure. Several states did, however, indicate that evaluations should take into consideration certain student demographics such as transiency and English proficiency.

No state that changed teacher evaluation procedures addressed how evaluations would be used to affect the distribution of teachers among high and low poverty schools, although several states did allow that performance pay could be provided for teachers who accept positions in hard-to-fill subjects or schools. 

What Is Driving These Changes?

A number of factors are at play in legislative decisions to alter teacher tenure law. One is the recession, which is driving some lawmakers to look for ways to reduce state budgets. Dismissing teachers, whose salaries are a major portion of every state education budget, can look like a good way to cut spending.

Another influential factor is federal education policy, which has for several years promoted measures including performance pay and value-added assessments that are associated with the current tenure debate. In some states, lawmakers are moving to align state policy with federal grant requirements. For example, the Race To The Top program required states to have or develop a performance-pay program and rate teachers’ effectiveness based on growth in student test scores. Further, several of the “turnaround” models for low-performing schools require the dismissal of all or most of the school’s faculty, and charter schools, also promoted in federal policy, often require teachers to give up tenure as a condition of employment.

Another factor that appears to be influencing lawmakers is “model legislation” developed by the American Legislative Exchange Council (ALEC). This organization, made up primarily of corporate representatives and state lawmakers, purports to facilitate the exchange of ideas. It develops sample bills and works with state lawmakers to develop and promote similar legislation for their states.

Many examples of ALEC’s model legislation were obtained by the Center for Media and Democracy earlier this month. Taken together the legislation appears to promote an agenda of reducing taxes, regulation, and public spending and promoting the privatization of many activities that have historically been the function of the public sector.

ALEC’s model legislation entitled, “Great Teachers and Leaders Act,” addresses teacher evaluation and tenure. The bill’s summary states:

"The Great Teachers and Leaders Act reforms the practice of tenure, known as nonprobationary status in some states. Teachers can earn tenure after 3 years of sufficient student academic growth; tenure is revocable following 2 consecutive years of insufficient growth. The council for educator effectiveness will define teacher effectiveness and come up with parameters for an evaluation system that requires 50 percent of a teacher’s evaluation to be based on student achievement using multiple measures. …. The Act eliminates the practice of forced teacher placement… The Act allows school districts to make reduction in force decisions based on teacher performance rather than on seniority."

The model ALEC legislation lays out extensive processes for developing teacher evaluations, measuring teacher effectiveness, conditions of dismissal, appeals of tenure decisions, and other matters related to tenure and evaluation.

Other ALEC model education legislation promotes alternative certification, alternative pay structures, and a variety of limits on collective bargaining and teacher participation in teacher unions.


The last two years have seen a surge in state actions to alter the ways teachers are hired, evaluated, tenured, and paid. Many states have introduced some form of teacher evaluation based on student test score growth (value-added measures) and linked those evaluations to tenure decisions and compensation. Critics charge that much of this legislation is based on unproven theory with little evidence to suggest it can be effective at improving educational outcomes for students. The long-term impact of these changes on students, schools, and communities remains to be seen, but the short-term ramifications for teachers will likely be significant.

Read more:

Links to legislation and other materials pertinent to changes to states’ tenure and evaluation laws are provided below.


The state’s new tenure law:


House Bill 2011, altering tenure:


Digest of 2010 education bills:

Link to SB191, which altered teacher employment law:

Bill as re-engrossed:


SB 736, “Student Success Act:

Official Bill summary:


SB 1110, pay for performance:

SB 1108, phases out tenure, restricts union activities:


SB7, which alters a variety of aspects of teacher employment:


SB1: Teacher Evaluations and Performance:

Indiana State Teacher Association summary of bills:


HB 2191, altering teacher employment law:


HB 945 and SF636:

New Jersey

A 3947, binding arbitration for school employees


SB5, which altered most law affecting public employees, including teachers:


Teacher Due Process Act:


SB 1528, tenure changes:


SB 95, alters tenure and dismissal requirements for teachers:

Read more from the July 2011 Rural Policy Matters.

Related Categories: Rural Policy Matters, Teacher

Related Tags: Teacher Issues