Performance Incentives Can Spark Greater Productivity.

Without any way to reinforce the need for greater productivity, the governing board of the Page, Ariz., Unified Schools and I realized it would be difficult to generate the enthusiasm and commitment of staff to restructure the organization.

To address this need, we developed in 1994 a program of annual performance incentives, open to all school district employees who would meet or exceed important organizational goals. Under the Performance Incentive Program, certificated employees are eligible for annual incentive payments representing 3 percent of the district's average teacher's salary for that year, or about $800. Classified employees can receive incentives of up 3 percent of the district's average classified employee's salary, or about $400. The size of the bonus is based on the collective ability of employees to reach important organizational goals in a manner that improves their productivity and raises the performance of the students under their jurisdiction.

The Performance Incentive Program establishes rewards for attaining primary and secondary performance goals. Primary goals are academic in nature, established by the school board based on input from parents, patrons and staff. These goals are anchored on the school's current level of academic achievement, which is measured through standardized test scores and the district's authentic assessment program. During the last year, one primary goal read: "Each building will increase the students' average composite performance score on the ITBS by 20 percent." Another goal stated: "The district will reduce the ethnic performance gap by 10 percent."

Secondary goals represent those decentralized objectives unique to each work unit--a school, the district office, the transportation department, the food services department, the maintenance and grounds department and so forth.

Some examples of secondary goals:

* To attain "approved" status for all Page High School vocational programs, as defined by the Arizona Department of Education;

* To increase student satisfaction with their daily bus ride from 60 percent to 75 percent; and

* To reduce industrial claims 5 percent through the proper training of employees.

School Board Goals

Each year, the governing board identifies three primary goals and each work unit identifies five secondary goals. Sixty percent of the district's annual performance incentive money is targeted to work units that meet or exceed two of the district's three primary goals and the remaining funds reward those work units that have accomplished four out of their five secondary goals.

Work units can qualify for incentive payments by achieving their primary goals, their secondary goals or both. Should the school or department fail to reach either its primary or secondary goals in a single year, all is not lost. The unit is allowed to carry over its incentive money for one additional year. This feature prevents work units from working under the oppressive environment of high-stakes improvement where, if staff members fail to achieve all of their goals in one year, they lose all of their incentive payments.

However, if a school or department fails to achieve its goals two years running, the money is returned to the program for disbursement in future years.

Reluctant Participants

Initially, not every district employee was comfortable participating in our Performance Incentive Program as only 70 percent of the district's work units voted to participate. Yet, within two years, 100 percent of our units were participating.

Our performance incentive programs are unlike other now-defunct programs tried in the past that focused inappropriately on rewarding the performance of individuals. Instead, our incentive program continues to enjoy widespread employee and community support because it recognizes and rewards the collective and collaborative efforts of our district's work units as they strive to achieve important organizational goals.

The district's Performance Incentive Program succeeds because it was designed on three important characteristics. First, the program was created to motivate work units to move in an agreed-upon direction. Second, the program encourages and recognizes performance that raises the standing of the entire organization. Third, the program financially rewards work units for their escalating levels of performance.

Major Hurdles

Implementing an employee performance incentive program is not for the faint of heart. Many significant hurdles must be overcome if your program is to achieve its intended purpose: gains in organizational productivity.

I offer the following suggestions to those considering a performance incentive program:

* First, involve all participants in the program in a meaningful manner from the very beginning.

* Second, develop a comprehensive, objective evaluation system to monitor and reward your work units' progress.

* Third, avoid participation quotas that preclude any work unit from participating.

* Fourth, be sure the incentive program does not erode the value of the employees' present salary schedule.

* Fifth, provide staff members with as much control over their work environment as possible as they collectively strive to raise their current level of productivity.

Dan Dodds is superintendent of the Atascadero Unified School District, 5601 West Mall, Atascadero, Calif. 93422. E-mail: [e-mail]. He served as superintendent of the Page, Ariz., Unified Schools until July 1997.