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Glossary of Terms

Alternative Compensation
The term “Alternative Compensation” encompasses a multitude of systems that pay education employees in a way that differs from the traditional single salary schedule.  Single salary schedules determine pay based on college credits and years of experience or only years of experience.

Merit Pay
“Merit Pay” provides economic rewards, typically as a product of a specific outcome.  Merit pay is often given as a one time bonus.  For teachers, such bonuses are often a product of student achievement test scores or teacher evaluation scores.

Pay for Performance
The phrase “pay for performance” probably has as many definitions as users.  To some, “pay for performance” describes compensation systems that provide incentives for increased student performance.  Others use the term to describe systems that reward teacher performance.  Still others use “pay for performance” to broadly describe skill and knowledge compensation systems.

Single Salary Schedule
Typically, the single salary schedule is a salary grid with lanes that reward advanced education and training and steps that reward additional experience.

Skills and Knowledge Pay (a.k.a. Knowledge and Skills)
While skill and knowledge pay encompasses a diverse range of compensation systems, such pay plans typically reward the acquisition and utilization of new skills and knowledge that enhance an employee’s delivery of services.  These systems are also sometimes referred to as knowledge-based pay, competency-based pay or skill-based pay.

Group Incentives
Group incentives, often given as a bonus, are rewards given to individual employees who are a member of a larger group that achieves a specifically identified objective or goal.  The group may consist of a specific department or grade level, but such rewards are most often applied on a building-wide basis.

Building-Wide Performance Awards
See Group Incentives

School-Based Performance Awards
See Group Incentives
Responsibility Pay
Responsibility pay is given as a bonus or sustainable salary to those employees who accept additional responsibilities such as mentoring or service on district committees.

Career Ladder
In career ladder systems, employees often move up the “rungs” of the ladder as they grow in experience, expertise, and/or responsibilities.  One example of a career ladder identifies “novice” and “advanced” as the rungs.  Another identifies “initial”, “professional”, and “master” as the rungs.

Market-Based Pay
Market-based pay plans are based on an economic theory of supply and demand and often exist as bonuses given to employees who serve in hard to serve positions and to those with specific “high demand” qualifications like math and science.  The theory of market-based pay plans also applies to increases in a single salary schedule as a way to attract high quality candidates.

National Board Certification
Through the National Board of Professional Teaching Standards, teachers may earn National Board Certification, a voluntary and advanced teaching credential that goes beyond state licensure.  The certification is based on standards for what accomplished teachers should know and be able to do.  Many states and school districts have economic rewards for those who earn National Board Certification.

Differentiated Pay 
While traditional, single salary schedules implement differentiated pay based on years of experience and college credits, the term is typically used to describe a departure from such schedules.  Differentiated pay is most often used to describe higher levels of compensation given to teachers serving in hard to serve or hard to fill positions.  Market-based pay and differentiated pay often carry the same intent.

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