No cure-all seen in bonus for principals

By Sara Neufeld and Stacey Hirsh

Sun reporters

Originally published August 31, 2006

The Baltimore Ravens agreed this summer to pay Steve McNair an $11 million bonus to become the team's new starting quarterback. Legg Mason Inc. Chief Executive Officer Raymond A. "Chip" Mason picked up a $14 million bonus last year as a reward for his work.

Bonuses - albeit much smaller - have been common for years in various fields, including law firms trying to snap up Harvard graduates and hospitals seeking to fill nursing vacancies.

Now, Baltimore Mayor Martin O'Malley is attracting national attention with his proposal to bring big bonuses into education, with $200,000 incentives for top-notch principals to work in struggling urban schools.

School systems around the country have dabbled in giving bonuses to principals, but it appears that none has ventured into six figures.

Experts and educators are divided on whether the money would result in better schools. Many say it would lure qualified applicants, but few think bonuses alone would do the job for children. And some say the money could make matters worse if it sparked professional jealousy and drained school budgets.

"It'll certainly get people's attention," said Vincent L. Ferrandino, executive director of the National Association of Elementary School Principals. "But without other things to support the principal, then I'm afraid long term it probably is not going to have the kind of impact that they would desire."

In business, bonuses and incentives have been around for decades, typically to solve a problem, said Don Lindner, manager of compensation at WorldatWork, an international human resources association. Sixty-nine percent of organizations use signing bonuses, and 35 percent use retention bonuses to attract and keep talented workers, according to a 2006 survey of nearly 2,800 WorldatWork members.

"Companies do this all the time. If they're having a difficult time finding the right talent for the kind of job that they need done, they do this all the time, and it's a very effective tool if done right," Lindner said.

Incentives such as bonuses are an effective motivation tool in the business world, said John M. Collard, who heads Strategic Management Partners Inc. of Annapolis and specializes in turning around troubled companies.

In addition to a bonus that rewards employees for signing on for the job, Collard said, a secondary incentive plan based on performance is key to getting results.

"I am a big advocate of giving incentives when performance is achieved and, as importantly, not giving it when performance is not achieved," Collard said. "You don't give somebody something just for showing up, in my view."

In the corporate world, Collard also recommends offering incentives to company heads and employees just below them, such as vice presidents and supervisors. Leaders need equally motivated teams behind them to ensure success, he said.

Hospitals also periodically use bonuses to attract workers. When the market is tight and a hospital wants a competitive edge in recruiting, bonuses are one tool it considers, said Catherine Crowley, vice president of the Maryland Hospital Association.

In education, principals' positions are becoming harder to fill, particularly in low-performing schools. As hundreds of principals in Maryland approach retirement, the federal No Child Left Behind Act is requiring states to impose penalties on schools that don't make adequate progress on standardized tests. That means principals could be putting their jobs at risk for taking on the toughest assignments.

Having a good principal is essential to running a good school. Under a dynamic leader, teachers will stick around, even in the most challenging environments. Under weak leadership, they will leave. The question is how to attract high-quality principals to the low-performing schools and keep them there.

James R. Sasiadek, principal of Thomas Johnson Elementary in Federal Hill, said that giving principals "ballplayer salaries" is a great place to start.

To be successful, a principal needs the support of the school system's central office and authority over such matters as hiring, instruction and a school's budget, said Sasiadek, whose school has low-income pupils and high test scores.

Statewide, the average principal salary is $94,000, state officials said. In Baltimore, it is $84,000.

Many details of O'Malley's proposal - where the money for the bonuses would come from, for instance - will be worked out if he wins in November, said campaign spokesman Rick Abbruzzese. Principals probably would have to demonstrate progress in their schools to get the money, and they would have to pay the money back if they left in less than four years, Abbruzzese said.

Eligible for bonuses would be principals going to schools in the most severe category of a state watch list for low test scores, almost all of which are located in Baltimore and Prince George's County. Those schools, which are forced to restructure, already have the option of offering successful principals from other jurisdictions a $20,000 raise.

The existing program grew out of a 2002 state initiative to bring successful principals, generally from the suburbs, to five low-performing city schools.

That initiative had mixed results. Test scores leaped at two elementary schools, but one had a principal already working in the city. At a third elementary, the principal dropped out of the program for personal reasons. At the two middle schools involved, growth - on test scores, at least - was modest.

State Superintendent Nancy S. Grasmick, an ally of O'Malley's opponent, Gov. Robert L. Ehrlich Jr., argued that the current program suffices. She said school systems need to focus on adequately training principals.

"I think there's an issue of a quick fix versus more depth," Grasmick said.

Michael Casserly, executive director of the Council of the Great City Schools, said principal bonuses elsewhere in the country are also generally about $20,000, a figure that he said might be too small to make a difference.

"At $200,000," he said, "you ought to get some pretty good people."

Gerald N. Tirozzi, executive director of the National Association of Secondary School Principals, was skeptical of a plan that would affect a small number of schools. "There's no systemic reform here that I see," he said.

In addition, Tirozzi said, he would be hard-pressed to believe that Baltimore doesn't already have some great principals.

"We're not saying thank you to them," he said, "but we're going to take in strangers from other districts and give them $200,000. You might get some of those best principals leaving, so it becomes a zero-sum game."

Jimmy Gittings, president of the Baltimore union that represents principals and other administrators, opposes O'Malley's proposal, particularly if bonuses are given to principals from the suburbs. He said the principals the city has could produce better results if they had the resources for basic reforms such as smaller classes and increased school security.

"Give us the things to work with," Gittings said, "and we'll do the job for you."

The Maryland State Teachers Association, which has endorsed O'Malley in the governor's race, also has qualms about the bonus proposal. Clara Floyd, the union's president, said the state will be able to recruit and retain teachers and principals by giving all schools the resources they need.

Robert C. Embry Jr., president of Baltimore's Abell Foundation, said it is worth trying the bonuses to see whether they improve struggling schools.

"If there are people who have demonstrated results in comparable schools and are willing to come, I think that's a small price to pay," he said.