Edu-news in DC this week is about the contract counter-proposal offered by Washington Teachers Union (WTU) leadership to DC Chancellor of Schools Michelle Rhee. The counter-proposal did not contain any major surprises in its substance, and still appears to be far apart from the contract DC schools offered last September.

If you haven't been following the negotiations, here's why they are so important: if implemented, DC's plan to pay teachers based on how much students are learning in class instead of by how old or how many degrees a teacher has is the most revolutionary attempt to reform teacher pay and, by extension teacher quality, in modern American history. The plan as originally suggested would give DC teachers a choice between a "red" plan that keeps teacher tenure around and pays teachers based on seniority up to a low ceiling, and a "green" plan that pays the best teachers--when it comes to improving student achievement the--up to $130,000 but would require a teacher to sacrifice tenure in order to qualify. The theory is that aligning teacher incentives with students' inherent desire to learn will accomplish a crucial educational purpose: ensuring that teachers go to work each day with the mission of getting the as much improvement out of their students as possible, while also sparking a change in the teacher labor market as more highly capable individuals consider teaching because excellent work will be met with due financial reward and accordant respect and prestige.

The DC Teachers Union, however, continues to react with anathema to that idea, since the plain implication for many of its dues-paying members (particularly those who are not doing a good job of educating their students) will either get fired under the new plan or lose in pay once it is recognized that their students simply aren't learning. This is particularly a problem for the union because new teachers who work for the district would be required to opt into the green plan, in which case the union wouldn't be able to protect them from firing.

The union did suggest a counter-proposal to Ms. Rhee's merit pay plan, however: a plan to institute "school-wide financial incentives." The idea is that instead of looking at, say, Mrs. Thompson as an individual to see how much her 7th graders have improved in reading thanks to her instruction--and then to pay her appropriately, the union would like DC to look at each school and give a chunk of money to each school that does really well, with some freedom to the staff at each school to divide up the dollars how they see fit.

What to make of this counter-offer? Well for starters, it's not a bad idea by any means. Anything that gets us as a society to start thinking about and paying teachers based on how good they are instead of how old they are is a plus. And the union is right to suggest that teachers will collaborate if they see their own salaries tied to the performance of their peers (although any good teacher would also recognize that if she's being judged individually that she'll stand to do better--that is, her students will learn more--if her peers are doing a good job as well, and thus have an individual reason to collaborate). So should Rhee take the counter-proposal and call it a day?

Not by a long-shot. At best, a highly effective teacher pay system would consider school-wide financial incentives as a supplement to, and not substitute for individual teacher merit. In other words, the primary factor in how much we pay a teacher should be how much her students learn, and if the whole school did well too then maybe we tack on a small (in proportion) bonus. But if you only do the latter, you run across the real risk that inert teachers (the unfortunately substantial number of teachers who already have tenure and who go to school perhaps with good intentions but who don't get much in the way of results) will not change their behavior at all, and instead free-ride on the hard work of any dedicated teachers in a school. Moreover, the school-wide system completely fails to recognize the outstanding efforts of thousands of incredible teachers who teach at chronically failing schools that might not otherwise quality for school-wide incentives because of poor leadership, a critical mass of ineffective teachers, or any other reason.

To make this point as real as possible, think about the last time that you worked in a group on something that the group as a whole was accountable for (i.e. a group project in school or at work where you turn in one final product). What grading system do you think would make you (and your peers) work harder on the project: a system where everyone in the group gets the same grade at the end regardless of how hard any one individual worked (or how much they slacked off)... or a grading system where each individual gets a grade based on how well the tasks that they were individually responsible for ended up, and where if the whole project was excellent the whole group got extra points?

Your answer should be the same for the way in which we pay our teachers.