Dozens of Juneau teachers, students and residents gather at the steps of the Alaska State Capitol on Jan. 23 in advocacy of an increase in the state’s per-student funding formula, which hasn’t increased sizeably since 2017 and has failed to keep pace with inflation during the past decade. (Clarise Larson / Juneau Empire)

Studies give teacher retention bonuses a mixed report card

Year-end bonuses sought by governor most effective for top-performing employees, specific subjects.

A proposal by Gov. Mike Dunleavy to give Alaska’s teachers up to a $15,000 “retention bonus” at the end of the school year might make them grateful, but also might not ensure they’re loyal, according to studies of states offering similar bonuses in recent years.

Dunleavy’s proposal offers bonuses of $5,000 to $15,000, with larger amounts for more remote districts, to all full-time teachers at the end of a full school year for each of the next three years. The studies of other states suggest such bonuses are most effective when offered to retain high-performing employees, target especially hard-to-hire specialized jobs and/or are structured to reward future rather than past behavior.

“Most economists would suggest that people are forward looking, which means that the effects of an incentive for future retention would have a bigger impact on that retention than a bonus paid out for past retention,” an analysis of nationwide teacher retention bonuses published last year by the Thomas Fordham Institute notes.

Also, the institute notes, “not all subject areas are created equal” in hiring and retention, with special education, science and math among the most challenging.

A map shows Alaska is faring better than a majority of states in its overall workforce situation, despite a shortage in many public and private occupations that have resulted in what officials deem crisis level. (U.S. Chamber of Commerce)

A map shows Alaska is faring better than a majority of states in its overall workforce situation, despite a shortage in many public and private occupations that have resulted in what officials deem crisis level. (U.S. Chamber of Commerce)

A struggle to lure and retain teachers in Alaska is a problem in many other states as well, due largely to the so-called Great Resignation occurring during the COVID-19 pandemic, and in the broader workforce as nearly 20% of Alaska’s state government jobs are vacant. Alaska’s overall workforce situation nonetheless ranks better than a majority of states, according to the U.S. Chamber of Commerce.

”However, due to the uniqueness of Alaska’s geography and the remoteness of some of our schools, we are experiencing a crisis in recruiting and retaining the best teachers for our children,” Dunleavy wrote in the sponsor statement for the legislation (House Bill 106 and Senate Bill 97).

Data supportive of retention bonuses in Alaska is found in a teacher survey published in 2021 (27% of whom responded in full) that, among other questions, asked them to rank 34 types of incentives and workplace improvements. Retention incentives — as a general concept without specifics — ranked fourth, behind restoring fixed-amount pensions and ahead of improved health care.

“In this survey salary ranked number one,” said Susan McKenzie, the state’s director of Innovation and Education Excellence, during a presentation Monday to the House Education Committee on Dunleavy’s proposal. “House Bill 106 proposes to address the highest ranked finding of the report.”

McKenzie, who is scheduled to become the new commissioner of the Department of Education and Early Development on April 1, also told the committee most teachers are recruited from the Lower 48 and the ratio of them has increased in recent years. There is a 22% annual turnover rate of teachers, which is higher in rural and remote areas.

But the concern of some lawmakers and state education officials is the temporary offering of bonuses are little assurance teachers won’t depart after receiving them, especially if the Legislature declines to fund them for additional years if Dunleavy’s proposal is enacted. Dunleavy, in a news conference announcing the proposal, acknowledged it is a pilot program he hopes will get legislative support beyond the initial years if results are positive.

The bonuses would be paid after the end of the school year, with teachers in “urban” districts, including Juneau, getting $5,000, more remote districts like Ketchikan and Yakutat $10,000, and most remote districts such as Hoonah and Pelican $15,000.

“The bill limits the payment to full-time teachers assigned to a classroom teaching assignment and specifically excludes temporary, substitute, or assistant teachers,” a legislative analysis of the bill states. “To be eligible for payment, a teacher must occupy a teaching position for the entire school year immediately preceding the date of payment.”

The bonuses proposed by Dunleavy would total about $58 million a year, compared to the $257 million cost next year of a $1,000 increase in the per-student funding formula sought by the state Senate majority (which would increase to $346 million the following year by adding another $348 to the funding formula). Dunleavy said his bill isn’t meant to be a replacement for a funding formula increase and he’s open to discussions about that possibility, although his proposed budget for next year does not increase the formula.

Retention bonuses with varying requirements are being offered to educators and at record-high levels in the general workforce nationwide. A survey of 148 school districts nationally showed about 40% offered retention bonuses ranging from $250 to more than $20,000 to teachers in 2021-22, many funded with federal COVID-19 relief money, according to The National Council on Teacher Quality.

The effectiveness of bonuses varies depending on numerous factors including amounts, subjects taught, performance incentives and broader workplace conditions.

In Florida annual bonuses of $2,500 were enough to lower attrition among special-education teachers. But in Colorado $2,500 bonuses were largely unsuccessful, according to a study by University of Colorado Boulder researchers.

“Yearly $2,500 bonuses intended to keep teachers at Denver’s highest priority schools had no clear impacts on whether those educators stayed on the job,” an article by Chalkbeat Colorado notes. “Nor did the bonuses attract teachers with higher effectiveness ratings to the schools, which serve a high proportion of students of color and English language learners.”

Also questioned by some experts is paying bonuses to all employees regardless of performance, such as a school district in North Carolina is paying up to $5,000 in “retention and recognition” bonuses to all full-time district employees.

“If you need math and science teachers, or you struggle to get teachers to work in rural areas or high-poverty neighborhoods, why spend money on elementary teachers, where there’s an oversupply?” Heather Peske, president of the nonprofit National Council on Teacher Quality, told The New York Times.

In the broader workforce use of retention bonuses is at an all-time high due to the so-called Great Resignation, but there are limited benefits, according to an analysis published last month by the Harvard Business Review. The article states “There’s no evidence they increase engagement or long-term loyalty.”

“It moves the employee/employer relationship away from the ideal partnership state and towards the transactional,” Tracy Winton, senior vice president of human resources at Iovance Biotherapeutics, told the magazine, stating she uses them sparingly as a result.

• Contact reporter Mark Sabbatini at

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