It's not who you know, it's what you do

Five years ago $32,000 was the salary earned by a new manager. Today, she earns nearly $47,000. Five years ago another manager with the same firm and 15 years' experience earned almost $40,000. Today, he earns only $42,000.

One employee clearly outperformed the other and reaped the financial benefits. That wouldn't be unusual if this were a business firm, but it is astonishing in a public school system. The two managers are school principals in the Glen Cove City School District.

The increase in the first salary, and the lack of one in the second, are due to one special factor -- merit pay.

Over the years merit pay has been almost as testy a topic as teacher tenure. It is a simple idea but one that is tough to put into practice -- pay more to educators who perform better. Most schools use the traditional practice of granting raises based on longevity and the number of advanced degrees each employee has.

The failure of school districts to employ merit pay is viewed by many taxpayers as the financial equivalent of promoting a student because of attendance and not for earning a passing grade by learning the subject matter.

Yet, proponents of merit pay in this picturesque community on Long Island Sound believe their program has a more important dividend than just rewarding outstanding staff. Pay raises are slanted toward obtaining maximum improvement in curriculum rather than management of buildings and facilities.

Merit pay enables Glen Cove to focus squarely on one of the most critical needs in public education today -- improving the academic content of what is taught in the schools. The salary structure gives administrators a direct incentive to get involved in what it is that is taught in the classroom and keeps this as their primary mission.

According to Paul Hersey of the National Association of Secondary School Principals, less than 30 school systems today employ merit pay. Glen Cove has also tackled directly the greatest stumbling block to any widespread acceptance of merit pay by adopting standardized, objective evaluation procedures that guard against personal preference in salary advancement for school administrators.

The Glen Cove school superintendent, Dr. Robert Finley, proposed merit pay for administrators to change what he says occurs too often in education - ''Mediocre performance rewarded the same as outstanding performance.''

''I don't have any faith in the salary schedule for guaranteeing improved education for kids,'' Dr. Finley says. ''The educator who leaves at 3 o'clock every day, doing only what the master contract specifically spells out, or who does the same thing year after year with no innovation, will receive the same raise as the teacher or principal who leaves at 6 o'clock and does far more than what is called for in the contract.''

''A merit system tries to give as much reward to individuals as possible and is not afraid to use some competition for motivation. I have faith that if ideas come from the individual professional, education will be better.'' He continues, ''Schools exist for kids and when you lose sight of that you're in trouble. Our merit system keeps the focus of administrators on kids, and rewards or penalizes them if they lose that focus.''

Three key components go into the Glen Cove administrative incentive plan: setting performance goals for each of the 24 administrators; evaluating whether or not the goals are reached; and deciding who gets what pay raise. Setting performance goals

The first step is for the administrator involved (principal, assistant principal, department head, or district coordinator) to have an integral role in deciding the criteria on which he will be judged.

Two other administrators, who are supervisors to the individual being evaluated, help choose ''performance goals.'' (In the case of a principal it is always the superintendent and assistant superintendent who do the supervising.) The administrator states what it is he hopes to accomplish above and beyond what is required in the job description for his position.

All three must reach unanimous agreement on the goals. This mitigates against anyone selecting a goal that is too easy. The built-in factor of competition has each administrator wanting the goals to be substantive and demanding. The goals are put in writing and all three sign the document.

In most instances administrators select three goals. Some examples of the performance goals chosen: One elementary principal took her extremely bright students out of class two days a week to work individually with them; another elementary principal began tracing very clearly what skills his elementary school students brought with them from his school into the middle school and what skills were actually needed there. Evaluation

The three administrators who established the performance goals compose the evaluation committee for that administrator. (This necessarily means one-third of the evaluation is self-evaluation.)

At the end of the year all three sit down and score on a basis of 0 to 100 the performance of the administrator under consideration in light of accomplishing what they all agreed to at the beginning of the year. Seventy-five percent of an individual's pay raise is contingent on this score. All three will have met during the year to review, modify, or even change the goals if necessary.

The remaining 25 percent of any pay raise is determined by whether or not the administrator is satisfactorily performing the duties of his job description. Superintendent Finley would like to see all 100 percent of the raise determined by the rating on performance goals. Determining the pay raise

The school board determines, from tax revenues, just what amount of the following year's budget can be allocated to administrators' raises. Just how much each administrator receives is determined by individual performance.

The 24 scores received by the district's administrators are ranked from highest to lowest. (At this point the scores without names are listed on a blackboard.) A normal break or pattern develops and the scores are put in four groups. The highest group will get the largest raise and so forth down to the lowest group. Only after this process are the individual names filled in. Reactions from some of the administrators

Emerson Ashby, assistant principal at Glen Cove High School, is in favor of the merit-pay program and cites the experience of a new business department chairman as one reason.

''When he took over the department,'' Mr. Ashby says, ''he decided on goals to move the department forward. The new chairperson put these goals in writing and made the agreement that this is what he would try to do. With merit pay, people go on the line like he did because they see real monetary gain from it. Other department heads will choose tough goals so he must also.''

Mr. Ashby adds, ''If you choose a soft goal it'll be found out. Upwardly mobile administrators will shoot you down if your goals are soft because they will not want you to get a high quality rating if you don't have a tough goal.''

The English Department head, George Maurer, concurs. ''Merit pay stimulates us to be more effective because remuneration is there. It had a positive effect on the morale of department chairmen because under the previous pay system the scale gave a degree of disparity to building principals.''

But not everyone agrees. Elementary school principal George Priest has strong reservations about the merit pay system and would prefer to be on the former graduated system.

''I like the former way better,'' he says. ''Before merit pay, I felt we shared more things in common with the other principals; I felt more personally comfortable with the superintendent. Now if you have a personality clash it can hurt you in the pocketbook.

''I also feel the evaluation process favors department chairmen at the expense of building principals, who have wider responsibilities than just curriculum. I know I worked just as hard before merit pay.''

Mr. Priest acknowledges that he now gets into the classroom more than he did. It was one of the performance goals he chose for himself and merit pay caused him to do so.

Louis Scuteri, principal of the middle school, has an ''uneasy acceptance of merit pay. Too much is in the eyes of the evaluator,'' he says. ''At times the decision on performance goals can appear to be political, but you must assume it is appropriate.'' ''What is the philosophy behind merit pay?'' he asks. ''The taxpayers have strong feelings about the mediocre or incompetent teacher, so they like it. But then why just have this for administrators and not have it for teachers?''

Dr. Mary Bear, an elementary school principal, likes merit pay, with reservations. ''Good administrators will get what they deserve regardless,'' she says, ''and the human element in it is pretty darned hard to rule out.''

''Personally, I think (merit pay) is a pretty good thing and goal setting is reason enough for making the extra effort,'' she says. ''It takes a good strong man to run it all and if a new superintendent came in, it would probably go. There is a built-in tension for principals to other administrators. Principals feel they have greater responsibilities.''

Every person interviewed agreed that merit pay forced him or her to pay more attention to curriculum and that the results would probably not have occurred under the old pay system. Superintendent Finley, smiling, agrees also.