The Effect of Alternative Compensation Programs on Teacher Retention and Student Achievement: The Case of Q Comp in Minnesota

The purpose of this study was to examine the effect of alternative teacher compensation programs (ACPs) on teacher retention rates and average student achievement in schools. ACPs base teacher pay mainly on some measure of their performance, such as student achievement, leadership, professional knowledge and skills, and instructional behavior. This study used the Minnesota Quality Compensation program (Q Comp) case to examine the effect of ACPs.;The relationships between ACPs and 3 types of school-level outcomes were explored: overall teacher retention rate, retention rate of teachers with three or more years of teaching experience, and rate of students who were at or above the proficiency level (student proficiency rate). In addition, it was also examined whether ACPs' effects on those three school-level outcomes differed by type of school, charter or traditional.;This study investigated teacher retention rates and student proficiency rates in Minnesota public schools over 8 years, 2003-2010. Because Q Comp began from the 2005-06 school year, the research period makes it possible to examine the effect of Q Comp implementation for up to 5 years, which was a long investigation relative to previous studies. Data on assignment of Minnesota public schools teachers developed by the Minnesota Department of Education and publicly posted on the Pioneer Press website were used to calculate teacher retention rate by school level. The school-level student proficiency rate for the third-grade mathematics and reading tests of the Minnesota Comprehensive Assessment (MCA) was used to measure school-level student achievement. To minimize selection bias problem, this study adopted a fixed effects model to control for unobserved time-invariant variables across schools as well as to consider time-variant observable variables.;This study found a positive effect of Q Comp on overall teacher retention rate only in schools with 5 years of implementation. In addition this positive effect, charter schools with 5 years of Q Comp implementation faced a negative effect of Q Comp on overall teacher retention rate. A positive effect of Q Comp on retention rate of teachers with 3 or more years of teaching experience was also found only in schools with 5 years of implementation. Regarding the effect of Q Comp on student achievement, this study did not find any significant overall effect on schools. Charter schools with 3 years of Q Comp, however, enjoyed a positive and significant effect on the third-grade math proficiency rate.;The findings of this study imply that it takes ACPs some time to realize their effect. It took about 5 years of implementation in the case of Minnesota Q Comp for there to be an effect on teacher retention rate, which is a contribution of this study. Another contribution of this study is the finding that the effect of ACPs could differ by school type. The findings could lead to further discussion on whether the effect of ACPs could be sustainable and whether the positive effect on teacher retention rate would lead to improvement in student achievement, which remain considerations for future studies.