North Carolina Principal Pay | A path forward for the General Assembly

1. Disclaimer: This student paper was prepared in 2018 in partial completion of the requirements for Public Policy 804, a course in the Masters of
Public Policy Program at the Sanford School of Public Policy at Duke University. The research, analysis, and policy alternatives contained in this
paper are the work of the student team that authored the document, and do not represent the official or unofficial views of the Sanford School
of Public Policy or of Duke University. Without the specific permission of its authors, this paper may not be used or cited for any purpose other
than to inform the client organization about the subject matter.
North Carolina Principal Pay | A Path
Forward for the General Assembly
Prepared For:
EdNC
Prepared By:
Amanda Ayers, Maurice Baynard, Sunny Glottman, Rory Smuhl
Duke Sanford School of Public Policy
April 2018

2. 2
ve Summary
Project Overview | Principal Pay in North Carolina
 In the 2017-18 legislative session, the North Carolina General Assembly changed the way
that public school principals are paid. Principals were paid historically based on years of
experience, number of teachers supervised, and degrees earned. Beginning with the
school year 2017-18, principals are paid based on student enrollment, with bonuses for
student academic growth.
 This new salary schedule is a step in the right direction because it provides a long-needed
increase to principal compensation. However, it has several shortcomings. North Carolina
is still below the national and regional average in principal pay; there are issues with how
EVAAS evaluates principal performance; and some salaries may actually decrease under
the new pay schedule.
 To address the problems in the new system, a team of researchers from the Duke Sanford
School of Policy spoke with North Carolina education experts, principals, taxpayers, and
legislators. The team also looked to other comparable U.S. states to identify best
practices in principal pay. This information came through three channels: interviews,
surveys, and case studies,
 The research team developed the following recommendations:
o Increase the budget for base principal salary.
o Include a provision to reward principals for experience.
o Level the playing field across NC districts by addressing the disparities among local
supplements.
o Design a more comprehensive measurement system to assess principal effectiveness.
o Extend the hold harmless clause indefinitely to prevent principals from receiving a
salary decrease.
o Add additional enrollment bands to account for especially large schools.

3. 1
Promising to increase the average principal’s salary in North Carolina, the General Assembly
appropriated an additional $35.4 million in 2017-18 to restructure how principals are paid.1
This was the
single largest investment in principal compensation ever in North Carolina.2
These changes were much needed. Prior to the 2017-18 budget, North Carolina ranked last in the
Southeast and 49th
in the country for how much school principals were paid.3
Advocates and educators
alike celebrated the legislature’s actions regarding this problem.
The North Carolina Association of School Administrators (NCASA) estimated that this new pay schedule
would increase the average North Carolina principal’s salary from $64,000 to roughly $70,000, with the
opportunity for principals to earn another $15,000 in bonuses.4
Many state representatives and education groups consider the new salary schedule a step in the right
direction.5
Yet despite these planned improvements to principal pay, the new pay schedule has left
many principals and stakeholders with a bitter feeling, while also leaving some potentially worse off.
North Carolina Principal Pay Shakeup

4. 2
Under the old pay schedule, principals were paid based on three criteria: (1) school size (based on the
number of teachers supervised), (2) experience (tenure), and (3) advanced degrees possessed.6
The base
salary was determined by school size and experience of the principal, with added bonuses based on
degrees earned by the principal. This pay schedule was several pages long with different salaries based
on different combinations of experience, school size, and bonuses.
There were also safeguards built in to prevent principals from receiving a pay decrease when becoming
a principal. Any principals who were receiving a higher salary while teaching would continue to receive
their teaching salary after becoming a principal. This safeguard no longer exists under the new pay
schedule.
The new pay schedule is much simpler.7
Instead of several pages, this new schedule is just a few lines.
Now the base salary is determined only by school size, determined by Average Daily Membership
(“ADM”).8
ADM measures the total number of days every student was on a current roll of a class,
regardless of whether they were present or absent, divided by the number of days school was in
session.
Bonuses are only available for schools that demonstrate student growth. The legislature also
implemented a “hold harmless” clause.9
This clause says that if a principal would make less under the
new pay schedule, then instead of receiving a salary decrease, their salary would remain the same. This
clause expires after one year, and when it lapses, principals would be required to be paid according to
the new pay schedule, even if that means making less money.
In North Carolina, the Education Value-Added Assessment System (EVAAS) is used to assess student
growth and performance.10
Although EVAAS was created to evaluate teacher effectiveness, the NC
Department of Public Instruction asserts that EVAAS data can accurately be used to evaluate principal
performance as well.11
EVAAS data assesses performance based on standardized student assessments,
specifically examining student test scores in math and reading, end-of-grade and end-of-course
assessments, and analysis of students’ graded assignments.
The new principal pay schedule, effective July 2017, is shown in Figure 1.
Comparing the Old and New Pay Schedules

5. 3
Figure 1 | 2017-18 Principal Annual Salary Schedule, by Average Daily Membership
Source: North Carolina General Assembly
North Carolina is unique in that it pays principals largely from the state budget, thus there is a single
statewide salary schedule. But, it is important to note that under both the old and new pay schedules,
principals also may receive a local supplement provided by the individual districts. These supplements
range from $0-$24,000, depending on the policy choices made in each locality.12

6. 4
Despite the added funding provided in the 2017-18 budget, many principals are dissatisfied with this
new pay schedule. Shortcomings of the new pay schedule include: average pay in North Carolina that is
still below both national and regional averages, issues with how EVAAS evaluates principal performance,
and the possibility of salaries actually decreasing under the new pay schedule.
Issues with Performance-Based Pay
Any performance pay system that is based entirely on test scores does not take into account individual
circumstances for a student outside of school. Principals are the lead administrator within a school, and
as such, they do not have direct influence over all of the factors inside classrooms that may influence a
student’s performance. EVAAS is limited in its ability to accurately measure the factors that affect and
determine principal effectiveness.
“There are too many factors that play into student achievement that is out of our control.”13
—Elementary School Principal from Iredell County North Carolina
“It is very difficult to see fairness and equity in basing a salary on student performance when
we have so little control over outside factors that influence students daily and so little support
in progressing in these areas.”
—Elementary School Principal from Lenoir County North Carolina
North Carolina is Still Below the National Average
The national average for a principal’s salary is $92,510.14
Even principals of the largest North Carolina
schools that exceed growth standards will earn less than this under the new pay schedule, barring the
inclusion of local supplements. The North Carolina average salary is also below the average among
Southeastern states. The average salary in the Southeastern states is $80,657.15
This is shown in Figure
2 below.
Shortfalls of the New Pay Schedule

7. 5
Figure 2 | 2017-18 Principal Annual Salary Schedule, by Average Daily Membership
Source: North Carolina General Assembly, U.S. Bureau of Labor Statistics
“NC Principals should be in line with the National Average and currently it is below.”
—High School Principal from Richmond County North Carolina
“More money should be included in the base pay to for the state average to be competitive
with other states in the Southeast.”
—High School Principal from Cumberland County North Carolina
It Incentivizes Principals to Stay at Wealthier, High-Performing Schools
Low-wealth schools are typically underperforming and provide less opportunity for principals to meet or
exceed growth and receive the designated salary bonus. This means that principals have less incentive
to work at low-performing schools because they have less salary potential there.
“There should be incentives to attract Principals to low performing schools. It is a big risk for
a Principal to leave a high achieving school for a turn around opportunity.”
—Elementary School Principal from Anson County North Carolina
“The emphasis on achievement makes it less attractive to work in low performing schools.
There has to be an incentive. Why would one choose to work in schools where they would
make less and potentially lose their job because of performance?”
—Middle School Principal from Catawba County North Carolina

8. 6
Many Principals Don’t Experience a Salary Change, and Some See a Decrease
Some principals may see as much as an $8,000 decrease in their salary.16
This could be due to no longer
receiving bonuses for advanced degrees and/or experience. The hold harmless clause prevents this from
occurring this year, but this is a possibility once the clause expires after the 2017-18 school year.
“I am a 5th year principal with 24 years educational experience, National Boards, and an Ed.
S. I am getting paid on my teacher's monthly salary due to being held harmless. The new
salary scale would decrease my monthly pay significantly.”
—Elementary School Principal from Catawba County North Carolina
In Some Cases, Assistant Principals and Teachers Make More than Principals
As the highest administrator at the school, principals were historically the highest paid employee at that
school. This is not always the case under the new schedule as assistant principals and teachers still
receive pay based on experience and degrees obtained. Again, the hold harmless clause prevents this
from occurring for one year only.
“With the pay scale the way it is currently, I would be getting paid less to be a Principal than I
did as an Assistant Principal.”
—Elementary School Principal from Randolph County North Carolina
There are Not Enough Bands for School Size
The new pay schedule determines base pay by the ADM at the principal’s school. It breaks down ADM
using the following ranges: 1-400, 401, 700, 701-1,000, 1,001-1,300, and 1,300 and over.
However, there are many schools with more than 1,300 students that face different challenges that are
not accounted for in the new pay schedule. South Mecklenburg High, the largest school in North
Carolina, has 2,913 students.17
Because the ranges end at 1,300, the principal of South Mecklenburg
High (and other principals of large schools) receives the same base pay as principals of schools with
under half as many students and teachers.
“The compensation for a school with 401 students is the same as a school with 700 students.
299 students is a big difference and offers a lot more challenges for administrators with
increased class size, increase number of teachers and less resources. It also takes away the
hard work and time that was put into obtaining advanced and doctoral degrees.”
—Elementary School Principal from Iredell County North Carolina

9. 7
Principals
To better understand how North Carolina principals view the new salary schedule, the research team
sent a survey to 2,697 public and charter school principals around North Carolina in March 2018. 752
principals responded to the survey (i.e., a 28 percent response rate). They spanned 149 public and
charter school districts around the state and represent all school levels and experience levels.
Among all respondents, 72 percent stated that they do not support the NC General Assembly’s new
annual compensation model (Figure 3). Teachers with more years of experience were more likely to
indicate that they do not support the new salary schedule.
For example, 75 percent of principals with 10-14 years of experience indicated that they do not support
the new salary schedule as compared with 63 percent of first-year principals. These results are not
surprising, as the new salary schedule no longer places a large emphasis on tenure or education, and
some experienced principals have seen pay decreases.
What Do North Carolinians Think?

10. 8
Figure 3 | In the 2017-18 budget, the NC General Assembly changed the principal schedule so
that annual compensation is based on student enrollment and achievement, rather than
tenure and principal education. Do you support this?
Source: EdNC 2018 Principal Survey
Responses: n=752
The survey followed up by asking responding principals how their salary would change under the new
pay schedule. A combined 40 percent indicated that their pay would increase, 27 percent indicated
their pay would decrease, and 33 percent indicated no change (Figure 4).
Figure 4 | Under this new salary schedule, how has your annual salary changed?
Source: EdNC 2018 Principal Survey
Responses: n=738

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Not surprisingly, experienced principals were significantly more likely to report a salary decrease under
the new policy because it deemphasizes tenure. As shown in Figure 5 below, 34 percent of principals
with 15-20 years of experience reported a significant decrease in pay, compared with 11 percent and 16
percent for principals with 1 year and 5-9 years of experience, respectively.
Figure 5 (Cross-Tab) | Under this new salary schedule, how has your annual salary changed?
Source: EdNC 2018 Principal Survey
Responses: n=738
In the principal survey, the research team also asked respondents to indicate the criteria that they
believe should be most important in determining principal success. Figure 6 below shows that principals
most frequently cited forms of student achievement (19 percent) in their top three criteria, followed by
school culture (15 percent) and tenure (13 percent).

12. 10
Figure 6 | Which of the following criteria do you believe are the most important in
determining principal success? Select your top 3 responses.
Source: EdNC 2018 Principal Survey
Responses: n=725
Interestingly, a majority of principals indicated that they disagreed with the new pay schedule based on
student achievement, yet they cited student achievement most frequently as being an important
criterion for determining their success.
This could indicate two things. First, “forms of student achievement” on our survey includes not only
test scores, but also other factors like college acceptance — which principals may view as equally
important in measuring growth.
Second, they may see student achievement as the most important criteria, but also want their salaries
to reflect other important factors — including but not limited to school culture, tenure, leadership
development, and the other criteria listed.
Finally, we asked principals whether they believed the North Carolina General Assembly took their
opinions into consideration when devising the new pay schedule. Six in 10 principals indicated that this
was not the case. Only 9 percent indicated that their views were taken moderately or significantly into
account (Figure 7).
We ran a similar cross-tab on this question to gauge how responses differed across experience levels.
Again, more experienced school administrators were 10 percentage points more likely to indicate that
their feedback was not given due consideration, compared with their less experienced counterparts.

13. 11
Figure 7 | Do you believe that North Carolina principals’ opinions and feedback were
considered during the drafting of the updated salary schedule?
Source: EdNC 2018 Principal Survey
Responses: n=718
Throughout the survey, principals were given opportunities to comment in greater depth about their
responses or general views towards the change in pay. As with the public survey, the comments were
substantive. We received over 1,000 comments from school administrators. Several key themes
emerged, which are presented below (Table 1).
Table 1 | Summary of Principal Survey Comments
Key Theme Representative Comments
Principals appreciate the
chance to speak out on this
important issue
“Thank you for your interest and for gaining some
insight. It would have been nice if this was
considered before legislation changed it.”
Principals remain passionate
about their work, but feel
underappreciated
“This is very upsetting to the principals I work
with. We feel undervalued and as a state that is
already in the bottom ten for pay…."
North Carolina principal pay
is neither competitive, nor
commensurate with the
work required to lead
“If I were in the business world and was a direct
supervisor of 700 people…I know I would be
making a whole lot more than I am.”
“The General Assembly has to come up with
comparable compensation to other states in the
region.”

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It is unfair that assistant
principals (APs) and
experienced teachers can
earn as much as principals
“If I went back today to be a 12-month AP, I
would earn as much as a Principal if I were not
being ‘held harmless’ for this one year.”
The General Assembly
should extend the “hold
harmless” clause so veteran
principals do not retire
“It is disheartening to hear stories of colleagues
that are forced into retirement because their ‘held
harmless’ status will expire effectively lowering
their salary and ultimately their retirement
payments.”
It should also increase
principals’ base pay.
“More money should be included in the base pay
for the state average to be competitive with other
states in the Southeast.”
Enrollment and growth are
important criteria in theory,
but poorly executed
“I do not agree with the way the change was
implemented, but I do believe that enrollment
and achievement could be viable factors in pay
decisions – under the right system.”
Salaries should also depend
on other factors like tenure
and advanced degrees
“There is no reward for experience…I am a better
principal today than when I started.”
Policymakers can improve
how they measure growth
and enrollment
“There needs to be additional steps at the top for
principals at very large schools. There is a
difference between a school of 1300 and a school
of over 2000.”
“We can’t judge children based on one score.”
Salaries should reflect
responsibility beyond
enrollment (e.g., school
level, district qualities)
“I do believe it is more challenging to lead high
poverty schools and there should be differences in
pay for teachers and administrators when they
work in more challenging settings.”
The new pay schedule makes
salaries highly variable from
year to year
“I worry my salary will now drop if we have a year
that our school does not meet or exceed growth.”
“A shift of a few students could result in dropping
or raising one’s base pay.”
“I cannot plan my family’s future because I am
not sure what my salary will be year to year.”

15. 13
The new schedule does not
incentivize the best
principals to stay or work at
struggling schools
“If you’re extremely early-career, or you’re
approaching retirement eligibility, or you’re
facing assignment in the toughest schools, there’s
simply no reason to stay in the field, even if
you’ve been doing top-notch work.”
In response to the new pay
schedule, some districts have
stopped allocating local
supplements for principals
“Some districts, including mine, used the raise in
state salary to decrease local stipends or get rid
of the local stipends altogether. I went from
receiving a 7% local stipend to receiving a 0%
stipend.”
Source: EdNC 2018 Principal Survey
Responses: n=630
“We are charged with one of the most important jobs, outside of doctors and health
professionals who save lives. We save lives as well in the most significant ways. While we did
not go into this field for money, by any means, it is important to know that our work is
valued. Never mind just the logistics of supporting my own family's needs - cars, college, etc.”
—Elementary School Principal from Cabarrus County North Carolina
The Public
To determine how North Carolina residents view the new salary schedule influencing their principals and
schools, we relied on data collected by EdNC through its online Reach NC Voices survey. Reach NC
Voices is a statewide project designed by EdNC to survey North Carolinians in real time using innovative
methods like text and online surveys. Respondents live statewide and mostly consist of concerned
parents and education professionals.
EdNC asked these public stakeholders how they thought principal pay in North Carolina compared with
other states, and which factors they believed should be calculated into principal pay (Figure 8). 64
percent (568 respondents) were correctly aware that that North Carolina pays its principals less than do
other states in the country.
26 percent (232 respondents) were not aware of this ranking, while the remaining 12 percent (101
respondents) did not know how North Carolina fared nationally.
Figure 8 | True or False: 49 states rank higher than NC in principal pay.
Source: Reach NC Voices
Responses: n=900

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EdNC also asked respondents to rank which factors they believed should be most important in
determining principal pay. Table 2 below shows the four criteria offered, and the average rank each
received among respondents.
Table 2 | Rank the following in order of importance when it comes to what factors should go
into principal pay.
Criteria Average Rank
Number of teachers overseen 2.53
Student population 2.49
Years of service 2.48
Academic growth 2.21
Source: Reach NC Voices
Responses: n=325
Importantly, no one of these criteria clearly stood out above the rest. In addition, it is interesting to
note that “academic growth” — the criteria most important to the new 2017-18 principal salary
schedule — received the lowest average ranking among the four presented criteria.
EdNC then asked these public stakeholders why they chose the criteria that they did. Five key themes
emerged from the comments, as shown in Table 3 below.
Table 3 | Why did you choose those priorities?
Key Theme Representative Comments
Academic growth is
definitely important.
“Academic growth is paramount to school
success.” “There is nothing more important to an
educator than the growth and success of
students.”
Test scores may not be the
best metric for that growth.
“Judging principals on how well students take
tests is unfair. While academic growth is
important, there are so many more factors that
go into a kid’s ability to take a test other than the
teacher and the principal.”
Other criteria, such as years
of experience and school
size, are important as well.
“Academic growth should be factored in but
should not count as much because principals have
no control over who attends their school. They
are called ‘public’ schools for a reason.”

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Principals need management
experience.
“Management skills and a level of business
acumen might fix some of the problems I hear
about from teacher friends.”
North Carolina must pay its
principals fairly.
“Pay should be fair for all educators. It is
ridiculous that pay scales do not consider the
liability, responsibility, years of experience, and
growth. All are important.”
Source: Reach NC Voices
Responses: n=36
Expert Perspectives
To better understand how the recent legislation was formulated and what improvements are feasible in
the near future, we sought out the expertise of several stakeholders who could offer insight into the
following questions:
1. Why wasn't the previous principal pay schedule providing North Carolina principals with an
equitable and competitive salary?
2. How did the 2017 principal salary schedule improve upon the previous compensation
system?
3. What further changes must be made to make North Carolina's principals receive equitable
and competitive wages?
In addition to gathering survey data, we interviewed legislators, education advocates, educators, and
professional association representatives. For this report we include the perspectives of the following
civic leaders:
• Rep. Craig Horn-- member of the North Carolina General Assembly, Chairman of the House
Committee on Appropriations for Education and the House Education Policy Committee for K-12
Education
• Board Appointee A.L. “Buddy” Collins—appointed by Gov. Pat McCrory to the North Carolina
State Board of Education
• Julie Kowal—education advocate, BEST NC
• Dr. Shirley Prince—Executive Director of the North Carolina Principals & Assistant Principals
Association (NCPAPA), and a former North Carolina school superintendent & principal
Among the experts mentioned in the report, all agreed that the current legislation is a step in the right
direction. Still, principal compensation remains inequitable. Although the performance –pay bonus
structure brings principal compensation closer to the national and regional averages, it falls short.
Principals seeking the highest wages have little incentive to seek out more challenging principal
assignments. As such, the schools needing North Carolina’s most talented principals often lack the
resources to attract and retain top principals.
Our experts are also very concerned with how principal compensation can be utilized to attain the best
possible educational outcomes. Despite having divergent views on how to make principal compensation

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more competitive and fair, legislators and educators alike agree that more can and should be done. To
best understand how North Carolina legislators are addressing principal compensation, we spoke with
Rep. Craig Horn.
Rep. Horn believes that the primary goal of the legislation recently passed is to make principals' salaries
more sufficient while increasing incentives for increased effectiveness and publicly acknowledging
talented principals in the state.
"What are we trying to accomplish? Attract, Retain, and Improve. We want to attract high
quality people, we want to retain high quality people, and we want high quality people to get
more high quality. We are attracting proficiency and growth."
—Rep. Craig Horn, North Carolina General Assembly
As we spoke, it became evident that for Rep. Horn principals are most likely to be effective when they
are financially incentivized. As such, Rep. Horn regards the new legislations performance-based pay
bonus as a move in the right direction. For Rep. Horn performance-pay accomplishes two vital
objectives: increasing principal compensation and improving student outcomes in the state of North
Carolina.
Rep. Horn believes that principals are tasked with the responsibility of school leadership. In order to lead
effectively, they must have an incentive to succeed. Drawing from his experience as a successful
business owner, he believes that performance pay provides the necessary motivation for principals to
effectively manage teachers and establish the necessary onsite expectations for schools to succeed.
When asked how he defines success, Rep. Horn emphasized the necessary balance that must be struck
between proficiency and growth.
A.L. "Buddy" Collins, a member of the North Carolina State Board of Education, also emphasized the
connection between principal pay and incentives. When asked what he considered the most
problematic component of the previous principal pay schedule, he worried that principals at schools
with large at-risk populations were not compensated for the added challenges they faced in their daily
responsibilities.
"Principal pay is a function of time in the job versus the type of work that you do; it always
creates inequities. For example, a principal in the business for twenty years may be working
at a small school without at-risk students. Old principal pay focused on the time you worked
and the size of the school. As such there were inequities among young and aspiring
principals."
—Board Member A.L. Collins, NC Board of Education
Board Member Collins also acknowledged that the new pay schedule is a step in the right direction
towards making North Carolina principal pay fair and competitive. Still, he feels more can be done to
make principals' base salary sufficient—on par with the national and regional averages.
It is important to note that Board Member Collins, like most of our other expert testimonials,
acknowledged that the recent legislation increased the budget for principal compensation by $35.4
million. This increase is the greatest salary increase in North Carolina history to date. Although base pay

19. 17
remains low, Board Member Collins has expressed faith that as more funds become available, principals'
base salaries will increase.
In addition to increasing base pay for principals, Board Member Collins also feels that a financial
incentive to attract and retain talented principals at challenging school assignments ought to be built
into the performance pay structure.
"Where do you want your best principals? The answer would be in your most challenging
schools. The current situation encourages principals to go to schools that are easier to
manage, with less at-risk factors and less time with faculty. What will the market do to
incentivize faculty [principals] to go where you need them most?"
—Board Member A.L. Collins, NC Board of Education
He then went on to cite numerous principals at schools with higher at-risk populations that will be
receiving a decrease in pay under the new legislation. To address this problem, Board Member Collins
suggests giving districts a separate grant that the district can use at its discretion to provide additional
pay bonuses to principals who accept assignments at challenging schools.
Finally, Board Member Collins feels that within the new performance pay structure there should be a
financial incentive for principals to seek out training that will make them more effective school leaders.
Julie Kowal, who works with BEST NC, a nonprofit thinktank comprised of local business leaders
committed to improving North Carolina's education system, reiterated Mr. Collins and Rep. Horn's
opinion that one of the greatest achievements of the 2017 legislation was its sizable investment in
principals' base salaries. When speaking to General Assembly, prior to the passage of the current
legislation, her advocacy group suggested a $50 to $60 million investment over two years to make North
Carolina regionally competitive.
"They really came through with the largest one-year increase in history."
—Julie Kowal, BEST NC
Ms. Kowal also expressed concern over the variety of pay given to principals by local supplements.
Because low-wealth districts have lower supplements, she feels that the local supplement enhancement
system incentivizes principals to seek out assignments in high- wealth districts.
To address the inequity in pay between school districts, BEST NC advocated that performance pay not
be measured by growth, but rather by the number of students in a school that received free or reduced
lunch. By enhancing the pay of principals in low-wealth districts, low-wealth districts could attract and
retain high-quality principals.
In light of the inter-district inequities and insufficient base pay, Ms.Kowal went on to further suggest
that until principal pay becomes more competitive, it will be harder for North Carolina to attract and
retain young principals.
In addition to discussing the need to increase base pay, Ms. Kowal also feels that future legislation must
find a more comprehensive manner to measure growth.
Ms. Kowal related to us her experiences reaching out to discuss principal compensation with educators
and principals throughout the state. She found that while most principals support performance pay

20. 18
bonuses, they believe that these bonuses should not be regarded as a sufficient replacement for a
competitive base pay, nor should growth be based solely upon student test scores. Rather than
measuring performance, Ms. Kowal suggests performance pay bonuses ought to compensate principals
for the value they add to their schools. She feels that gauging value is too subjective and heterogeneous
to do at the state-level. Value ought to be defined by each district's superintendent. Schools have
unique needs and it is the responsibility of the district to assess whether a principal is meeting or
exceeding those needs.
Lastly, we spoke with Dr. Shirley Prince, Executive Director of the North Carolina Principals and Assistant
Principals Association (NCPAPA). In addition to having over thirty years of experience in the North
Carolina school system, she served as a district superintendent for two years. In her current position, Dr.
Prince has had the opportunity to speak with a variety of stakeholders affected by the changes in
principal compensation. Speaking on behalf of NCPAPA she maintains that performance can be used as
a "criteria for rewards," however, it should not replace a commensurate base salary.
"Too much of a principal's salary is dependent on the growth of the school."
—Dr. Shirley Prince, Executive Director NCPAPA
Moreover, Dr. Prince also is hesitant to regard the true principal evaluation system as an accurate
measure of principal effectiveness. The EVAAS system only measures student achievement. Dr. Prince,
like Ms. Kowal and the principals we've surveyed regard a principal's responsibilities being unique to the
school he or she serves. Dr. Prince emphasized the need for future legislation to increase principals' base
salaries. She maintains that performance pay should not be the means for principals to achieve a salary
that is on par with the regional and national averages.

21. 19
North Carolina is unique in that it pays principals largely from the state budget, thus there is a single
statewide salary schedule. These four case studies below are notable examples of how other states
have approached performance-based pay salary schedules.
Florida | Pay-for-Performance
Florida law requires each school district to design its own principal base pay schedule. Superintendents
are responsible for placing new principals on the schedule as well as advancing current principals along
it.18
Salary adjustments must be provided for effective and highly
effective principals based on:
• At least 1/3 on the growth or achievement of students going
back 3 years.
• At least 1/3 on an evaluation based on the 10 standards in
the Florida Principal Leadership Standards.19
• And a maximum of 1/3 being based on professional and job
responsibilities recommended by the State Board of
Education or identified by the district school board.
In addition, bonus salary supplements, paid by school districts, must be provided to principals that are
assigned to schools that have historically made less than satisfactory progress based on the statewide
standardized assessment issued to students each year, as well as for the assignment of additional
academic responsibilities.
North Carolina could learn from the Florida model by allowing for a portion of principal salary to be
based off professional and job responsibilities. This provides a path for Principals who go above and
beyond their job responsibilities to earn additional pay.
What Have Other States Done?

22. 20
Louisiana | 50/50 Model
In Louisiana20
, principal pay is based on21
effectiveness, demand, and experience, none of which may
account for more than 50 percent of how a district's salary schedule is designed.
A principal's effectiveness is calculated by equally considering measures of student growth, defined by
their school district board, and a leadership evaluation22
that includes school vision, school culture, and
instructor support.
Salaries cannot be decreased, but a rating of “ineffective”
precludes a raise.
Demand includes a principal's certifications, including any
advanced degrees, and their particular schools need as well
as geographic area.
What differentiates this model is that experience is required to be considered as well as factors that may
make a school undesirable to principals.
The removal of experience from the North Carolina salary schedule was not well received by many
veteran principals. The Louisiana model shows how the General Assembly could balance principal
effectiveness and leadership, while accounting for the issues that may make some schools undesirable
for principals.
Providence, Rhode Island | Value Added
When Providence, Rhode Island23
created a pilot study24
to change the way all 37 of their principals
were paid, they looked for a base salary that would reward principals working at challenging schools.
They also included more freedom for school districts and principals to come to individual agreements
over bonus pay. The terms of these agreements are up to the
superintendent’s discretion.
Providence used the Vanderbilt Assessment for Leadership in
Education25
to separate principals into 3 tiers: basic, proficient,
and distinguished.
Base salary for proficient principals is equal to the previous year's average salary at a minimum. The
minimum base salary for a basic principal is 5 percent lower than the proficient minimum while a
distinguished principal’s base salary starts 5 percent higher than the proficient minimum.
Based on a school's size, academic challenges such as previous student performance, and student
demographics like poverty levels, a principal can further earn up to 10 percent more pay.
Additionally, basic principals are offered 1-year contracts, proficient principals 2-year contracts, and
distinguished principals 3-year contracts.
The most distinguished principals can also receive additional autonomy over how their school is
managed.

23. 21
School districts and principals can agree on bonus financial rewards based on achievable and
measurable goals each year.
Principals can also receive bonus pay stipends if they are recognized at the district, state, or national
level for their leadership.
An interesting part of the Providence model that North Carolina could look to emulate is the non-
financial incentives distinguished principals earn in the form of additional autonomy in how they
manage their school. The short contract lengths, only 3 years for even the best principals, is probably
not something North Carolina should be looking at.
Tennessee | Shared Leadership
Tennessee26
updated its principal pay system to include shared leadership evaluations27
. Principals are
judged by how effective their teachers are by measures of student achievement and growth, and how
effective they are at providing instructional support to their teachers is also considered.
Principal pay is based28
50 percent off raw student
achievement, 35 percent off student growth, judged by
the Tennessee Value-Added Assessment System, and 15
percent off the Tennessee Instructional Leadership
Standards29
evaluation (TILS).
Tennessee updated the TILS over the course of 2 years to better reflect the changing role of principals.
Input was received by principals and those who evaluate them on what the TILS should include and
measure.
A principal evaluation advisory council has been created to allow for continued updates to the TILS.
The Tennessee model still largely favors raw student achievement, which does little to make poor
performing schools more attractive for principals. What Tennessee gets right is the continuing process
of tweaking the standards principals are evaluated by based on evaluator and principal feedback. This
allows for evaluations to keep up with the continually changing role of a principal.

24. 22
After considering the opinions of North Carolina stakeholders and examining national best practices for
principal compensation, we recommend that the General Assembly consider the following steps to
make principal compensation more competitive and equitable:
Increase Budget for Base Salaries
Following a $35.4 million increase in funding for principal compensation, it is politically unfeasible that
the General Assembly will further increase the budget for principal pay in the near future. Still, the new
base salary schedule remains below the national and regional averages. To offer a competitive salary
that attracts and retains the most talented principals, we recommend that EdNC and other advocacy
groups lobby the legislature to seek budgetary means to appropriate additional funds for principal
salaries.
Additionally, principals should also receive raises to their base salary linked to their experience. Without
a way to increase their pay throughout their career, principals are not incentivized to stay in the
profession. We recommend raising the base pay for principals after their 5th
, 10th
, 15th
, 20th
, and 25th
year on the job. Steady increases throughout their career incentivizes high achieving principals to stay in
the profession.
Level the Playing Field Across NC Districts
As it currently stands principal pay is largely supplemented by local revenue to make principal pay more
comparable to other states. Wealthier districts can pay higher wages than their poorer counterparts,
incentivizing principals to seek employment in districts with high local supplements. To make principal
pay more uniform through the state, we propose that the state set aside funds to supplement principals'
salaries in low-wealth districts. The Louisiana principal compensation model has dealt with a similar
challenge by taking demand into account when determining base salary amounts. Lower-performing
schools are often located in low-wealth districts. These schools have a higher demand for talented
principals, and these principals' base salary should reflect the higher demand.
Further consideration should go into assessing how to establish what qualifies a school to be
determined as high-demand. Principals assigned to schools with vulnerable student populations—e.g.
Recommendations

25. 23
high special needs population, low-income student population—must be compensated for the
additional challenges they face in the day-to-day operations of their school.
Design a More Comprehensive Measurement System to Assess Principal
Effectiveness
EVAAS and the performance aspect of principals’ salaries is also an issue. EVAAS relies only on test
scores to show student growth. Student growth is important and should be rewarded, but there are
other characteristics of a successful principal that may vary according to the needs of individual schools.
For this we return to the Louisiana example again. Student performance on standardized tests as well as
other indicators of achievement are used to calculate 50 percent of the principal’s effectiveness. The
other 50 percent comes from evaluations by their superintendent. These evaluations may include
professional development training for newer principals. Superintendents would then be able to evaluate
principals’ performance in relation to the needs of that specific school. The combination of student
achievement, and superintendent evaluations would then determine whether or not that school met or
exceeded growth. Bonuses would then be distributed accordingly.
Extend the Hold Harmless Clause
The hold harmless clause should be extended indefinitely so that no principal will receive a decrease in
salary due to the new schedule. Rep. Craig Horn mentioned that this is a change that will most likely be
discussed and implemented in the next session of the legislature.
Add Additional Enrollment Bands
The pay schedule determines the base salary by ADM (the number of students in the school), but the
largest school size on the schedule is 1,300. This means that principals with 2,500 students receive the
same base pay as principals responsible for 1,300 students. To correct for this, the pay schedule should
contain additional bands of students up to 3,000, as the largest school in the state is around 3,000
students.

26. 24
Endnotes
1
Pridemore, Adam, “State Budget Creates New Principal Pay Plan And Bonus Program,” North Carolina Association
of School Administrators, http://files.constantcontact.com/2cfe515e301/f70de8c2-f306-45e8-9b45-
fa4a2ce7086c.pdf
2
Berg, Brenda, “Statement from BEST NC on Principal Pay,” BEST NC, October 11, 2017, http://best-
nc.org/statement-from-best-nc-on-principal-pay/
3
Ball, Billy, “Ranked 49th
in principal pay, lawmakers who haven’t funded raises consider tossing out salary
schedule,” NC Policy Watch, October 26, 2016, http://www.ncpolicywatch.com/2016/10/26/ranked-49th-
principal-pay-lawmakers-havent-funded-raises-consider-tossing-salary-schedule/
4
Pridemore, Adam
5
Granados, Alex, “Principals in the policy spotlight.” EducationNC. September 8, 2017,
https://www.ednc.org/2017/09/08/principals-policy-spotlight/
6
“North Carolina Public School Personnel: Employee Salary and Benefits Manual 2016-2017,” Public Schools of
North Carolina, Department of Public Instruction, Division of School Business, March 2017,
http://www.ncpublicschools.org/docs/fbs/finance/salary/salarymanual.pdf
7
North Carolina General Assembly. Senate Bill 257. Session Law 2017-57. Section 8.3-8.4.
https://www.ncleg.net/Sessions/2017/Bills/Senate/PDF/S257v9.pdf
8
“Data & Reports – Student Accounting,” Public Schools of North Carolina, State Board of Education, Accessed
April 23, 2018, http://www.ncpublicschools.org/fbs/accounting/data/
9
Granados, September 8, 2017
10
Educator Effectiveness Model: EVAAS, Public Schools of North Carolina, State Board of Education, Accessed April
10, 2018, http://www.ncpublicschools.org/effectiveness-model/evaas/
11
Granados, Alex, “The principal pay situation in North Carolina,” EducationNC, September 21, 2017,
https://www.ednc.org/2017/09/21/principal-pay-situation/
12
“Selected Statistics of Local Salary Supplements,” North Carolina Association of County Commissioners, February
2, 2018, https://www.ncacc.org/DocumentCenter/View/2948
13
All unattributed quotes throughout this paper came from comments received in the EdNC 2018 Principal Survey.
14
Occupational Employment Statistics: Education Administrators, United States Department of Labor, Bureau of
Labor Statistics, March 24, 2018, https://beta.bls.gov/dataViewer/view/349dc901fc924c60b5657b5e284fd9dd
15
Occupational Employment Statistics: Education Administrators, United States Department of Labor, Bureau of
Labor and Statistics
16
Hinchcliffe, Kelly, and Granados, Alex, "General Assembly, State Board of Education tackle principal pay." WRAL.
October 5, 2017. http://www.wral.com/general-assembly-state-board-of-education-tackle-principal-
pay/16996990/
17
South Mecklenburg High, U.S. News and World Report, Accessed April 15, 2018,
https://www.usnews.com/education/best-high-schools/north-carolina/districts/charlotte-mecklenburg-
schools/south-mecklenburg-high-14573
18
Florida Statue § 1012.22 (2017)
http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=1000-
1099/1012/Sections/1012.22.html
19
“The Florida Principal Leadership Standards”, Florida Department of Education,
http://www.fldoe.org/teaching/professional-dev/the-fl-principal-leadership-stards/
20
“Louisiana Believes”, Louisiana Department of Education, https://www.louisianabelieves.com/
21
Act 1, Louisiana House Bill No. 974, Regular Session, 2010, Effective July 1, 2012,
http://www.legis.la.gov/legis/ViewDocument.aspx?d=793654
22
“Louisiana Leader Performance Evaluation Rubric,” Louisiana Believes: Department of Education,
https://www.louisianabelieves.com/docs/default-source/key-compass-resources/2014-2015-compass-leader-
rubric.pdf?sfvrsn=12
23
“Providence Schools”, Providence Public Schools, https://www.providenceschools.org/

27. 25
24
“Providence Schools Principal Compensation”, Providence Public School Department,
www.ride.ri.gov/Portals/0/Uploads/Documents/Teachers-and-Administrators-Excellent-Educators/Performance-
Based-Compensation/Providence_Schools_Principal_Compensation_Model_Final.pdf
25
“Vanderbilt Assessment of Leadership in Education”, IO Education, https://valed.ioeducation.com/
26
“Department of Education”, Tennessee Department of Education, https://www.tn.gov/education.html
27
“Teacher and Administrator Evaluation in Tennessee”, Tennessee Department of Education, http://team-
tn.org/wp-content/uploads/2013/08/rpt_teacher_evaluation_year_32.pdf
28
Tennessee Code Title 49. Education § 49-1-302, https://codes.findlaw.com/tn/title-49-education/tn-code-sect-
49-1-302.html
29
“Tennessee Instructional Leadership Standards and Administrator Evaluation, Tennessee Department of
Education, https://www.tn.gov/content/dam/tn/education/licensure/lic_bal_conversion.pdf

28. A-1
Appendix | Methodology
To identify best practices for paying principals competitive and equitable salaries in North Carolina, we
relied on a combination of surveys, interviews, and case studies.
Figure A-1 | Strategy to Identify Best Practices
The surveys and interviews allowed us to gauge how North Carolina’s stakeholders — including voters,
principals, legislators, and education experts — feel about their principal pay structure in light of the
2017-18 budget changes. The case studies then allowed us to see what types of pay structures other
states and school districts around the United States have implemented, and which may be relevant for
North Carolina. From these inputs, we were able to develop a set of politically feasible
recommendations for the North Carolina General Assembly moving forward.
Surveys
We relied on two surveys to conduct this analysis. The first is a public survey provided to us by EdNC
that it delivered through its Reach NC Voices platform. The Reach NC Voices platform is a statewide
project designed by EdNC to survey North Carolinians in real time to understand how they feel about a
broad array of education issues. They use methods such as text, online surveys, and a Facebook chatbot
to collect results.
The second is a survey we designed and administered to North Carolina principals through the Qualtrics
survey platform. We sent the survey to every principal in North Carolina (2,697 total) on March 7, 2018
and received 752 responses, representing a 28 percent response rate. Given the large sample size, we
are confident that it is representative of state educators across North Carolina in terms of gender,
school size, and district location. Importantly, we assured respondents before they completed the
survey that their answers not be attributed to them in the final report.
To analyze the survey results, we built an Excel workbook that tallied the total number of responses for
each question and answer choice. In addition to the survey questions presented earlier in the report, we

29. A-2
asked various demographic questions. These allowed us to run cross-tabulations and view the survey
data by principal experience (years served) and school size.
We received over 1,000 open-ended comments to the survey, which were more difficult to process. To
make sense of these results we implemented a coding system, a popular method of analyzing qualitative
data. This consisted of reading through each individual comment, identifying several key themes,
systematically tagging the comments to make them searchable and countable, and then seeing which
themes emerged most frequently. This was an attempt to organize and “quantify” the bulk of
qualitative data we received. Below is a segment of that workbook to illustrate this process.
Figure A-2 | Qualitative Analysis for Open-Ended Survey Responses (Coding)
One important limitation of both surveys is that they are voluntary, meaning the samples are likely to be
comprised of strongly opinionated people. Respondents who are particularly passionate about
education issues or were more affected by the change in salary schedule might be more likely to
respond, which could bias the results. For this reason, we corroborated the survey results with case
study analysis and interviews.
Interviews
Our team conducted in-person and phone interviews with North Carolina education stakeholders,
including experts, advocates, and legislators.
 Dr. Shirley Prince, Executive Director, North Carolina Principals and Assistant Principals Association
 Julie Kowal, Vice President of Policy Research, Business for Educational Success and Transformation
in North Carolina (BEST NC)
 Craig Horn, State Representative (District 68), Chairman of the House Committee on Appropriations
for Education and the House Education Policy Committee for K-12 Education
 A.L. “Buddy” Collins, Appointee, State Board of Education

30. A-3
Below is a list of questions we prepared for these interviewees. We recorded all conversations with the
permission of interviewees using an iPhone and prepared full transcripts for EdNC staff.
Below is a list of questions we prepared to guide the interviews. We relied on these loosely,
understanding that conversations often took unpredictable turns and that individual interviewees could
only answer a subset of our questions.
1. In what ways did the previous principal pay schedule in North Carolina fail?
2. What were the General Assembly’s primary motivations in changing the principal pay structure
specifically to a pay-for-performance model?
3. Are there any faults in the legislation that the General Assembly passed? If so, what are they and
how would you fix them?
4. How many other states have relied on a pay-for-performance and what results have they seen?
5. What compensation structure do you personally believe would be most effective in North Carolina?
6. What changes would you like to see implemented in the new pay schedule (e.g., extending the hold-
harmless clause)? Are there additional best practices in principal pay that the General Assembly did
not incorporate but should moving forward?
Case Studies
To understand how other states have implemented their principal pay scales, we consulted four useful
case studies from Florida, Louisiana, Rhode Island, and Tennessee. These states were chosen for the
following reasons:
 They all implemented pay-for-performance models, like North Carolina.
 They took different approaches to pay-for-performance. We used Rhode Island, for example,
because it implemented a value-added model while the others (Florida, Louisiana, and Tennessee)
all implemented a 50/50 model.
 Most are in the Southeast, and thus have similar populations and political climates.
 They recently updated their principal pay scales in the last 10 years.
 The General Assembly examined many of these approaches while it was updating the principal
salary schedule during the 2017-18 legislative session.
After identifying which case studies to incorporate in our report, we analyzed each using the following
questions:
 Is the state’s salary schedule applied implementable in accordance with North Carolina’s practice of
using state appropriated funds to compensate educators?
 How does the model used to assess performance account for heterogeneous school populations
(e.g. disparate socioeconomic statuses, special needs populations, school size)?
 Have there been issues implementing the performance-based model across all schools?
 Does implementation of performance-based models matter more than the instrumentation of the
model in the case study being examined?
 How have principals, teachers, and other stakeholders responded to salary changes in their school?
Has it improved student outcomes?