Debate rages in education over whether to provide teachers with financial incentives in order to improve recruitment and retention in “hard-to-staff” schools and subject areas. In other public sectors—the civil service, military, and medicine—organizations take for granted that compensation is a powerful tool; they have moved from this debate about “whether” to a discussion of “how.” Experience from these domains suggests that a “portfolio” of incentives (including performance bonuses, loan repayment or scholarship programs, and other forms) may be most effective. As a component of this portfolio, performance-based incentives can boost both the recruitment and retention power of hard-to-staff pay—particularly for the high-potential candidates that we need most in hard-to-staff schools. But no matter the form, other sectors are offering more substantial premiums than we have seen in education: up to 30 percent of a staff member’s total pay in some high-demand positions. At the same time, many organizations in these other sectors are pursuing non-financial solutions, too, such as targeting a “ready pool” of candidates (who don’t mind or are already attracted to a position) to help reduce the additional incentives required—or reorganizing operations (often using technology) to reduce the need for the position. The report, including implications for public education, was presented in November 2008 at the Center for American Progress.

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