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Differentiated Pay

In June 2013, the State Board of Education passed a revised set of guidelines pursuant to Tenn. Code Ann. §49-3-306(h), which requires districts to create and implement differentiated pay plans.  The intent of the differentiated pay plans is to give local control to districts in regard to salary schedule, and to create another lever for districts to attract and retain teachers based on a flexible set of potential criteria.  A complete copy of the policy can be found here.

Technical Assistance

Technical assistance is available for districts in creating their differentiated pay plan.

The department provides support to districts through two main opportunities: an accelerated planning cohort and statewide planning sessions. The accelerated planning cohort will consist of a continuum of deep-dive, intensive sessions focused on aligning compensation with human capital strategies and needs. The statewide planning sessions will be available via webinar and regional sessions throughout the fall and early spring.

Here is an overview of the technical assistance timeline:

Timeline Action

August-December 2013

Phase 1 Cohort: Accelerated planning cohort sessions

August-September 2013

Regional Sessions: Communications and awareness/engagement session

October 22, 2013

Release via Director’s Update and post on CORE webpages the following:

  • Release Differentiated Pay Submission document
  • Release Part 1 of Resource Guide—Stakeholder Engagement

October 31, 2013

10:00 a.m. (CDT)

District Webinar 1 covering the following:

  • Overview of Differentiated Pay Submission document
  • Stakeholder Communications
  • General FAQs

November 5, 2013

Release via Director’s Update and post on CORE webpages (insert link here) the following:

  • Part 2 of Resource Guide—Design Options

November 15, 2013

9:00 a.m. (CST)

District Webinar 2 covering the following:

  • Design considerations
  • Draft ideas from accelerated cohort

December 3, 2013

Release via Director’s Update and post on CORE webpages (insert link here) the following:

  • Part 3 Resource Guide—Financial Modeling and Sustainability

December 16, 2013

10:00 a.m. (CST)

District Webinar 3 covering the following:

  • Financial Modeling and Sustainability

January 2014

Differentiated pay plans can be submitted

Ongoing after submission

Differentiated pay plan approval notification (within 3 weeks of submission)


Implementation support

Webinar information:

Please send any additional questions to Laura Encalade at

Compensation Accelerated Planning Cohort Sessions

Session #1: Compensation Design as Part of an Overall Human Capital Strategy

Whole Group Session: September 5, 2013

Session #2: Human Capital System Costs, Impacts, and Trade-offs

Regional Sessions: October 16-18, 2013

*East Tennessee sessions will begin at 9 a.m. EDT.

Session #3: Overcoming Fiscal considerations Problems of Practice

Regional Sessions: November 20-22, 2013

*East Tennessee sessions will begin at 9 a.m. EDT.

Session #4: Strategy Wrap-up: Building Support & Communication

Whole Group Session: Decmber 11, 2013


All sessions will take place from 9 a.m. to 4 p.m. East Tennessee sessions will begin at 9 a.m. EDT.

Please notify Laura Encalade at with any questions or changes in district teams.


NEW TN Teacher Compensation Web Tool User Guide - The department is pleased to announce the Tennessee Online Compensation Design Tool as a optional new resource to assist districts in designing their differentiated pay plans. The tool can be accessed via the following website: Each district has a unique access code which can be requested by emailing The accompanying User Guide offers insights on using this optional tool. User Guidedownload pdf file

Tennessee Consolidated Retirement System (TCRS) letter regarding differentiated pay and earnable compensationdownload pdf file

2014-2015 Differentiated Pay Plan Submission Templatedownload Word file
In accordance with the revised State Board of Education policy that requires all districts to implement differentiated pay plans beginning in the 2014-15 school year, here is the submission document for all differentiated pay plans. The timeline for the submission of these plans can be found on the first two pages of the document.

Differentiated Pay Resource Guidedownload pdf file

To further support districts in the planning process for their differentiated pay plans, department staff will be releasing a multi-part Differentiated Pay Resource Guide. This document is the first part of the series and contains information on stakeholder engagement and communications.


Webinar Recordings

To watch a webinar, follow the link below to install the free AT&T Connect software and play the recording.

Frequently Asked Questions

Is the differentiated pay plan policy a new policy?

State law [T.C.A § 49-3-306(h)], adopted by the General Assembly in 2007, already requires school districts to adopt and implement differentiated pay plans to aid in staffing hard to staff subject areas and schools and attracting and retaining highly qualified teachers. However, this law has never been enforced. Beginning in the 2014-15 school year, the department will begin to enforce this law, and the increased flexibility provided by the new salary schedule will assist districts in meeting this requirement.

Does the differentiated pay plan policy mandate pay for performance?

The differentiated pay plan policy does not mandate pay for performance. However, the revised differentiated pay plan policy prevents districts from basing across-the-board pay increases solely on years of experience or advanced degrees. Districts must differentiate teacher compensation based on at least one additional criterion. Differentiated pay criteria can include any of the following: additional roles or responsibilities, hard-to-staff schools or subject areas, and performance based on State Board approved teacher evaluation criteria.

Will base pay changes and bonuses awarded through a district’s differentiated compensation plan count toward retirement benefits through TCRS?

The department reached out to the Tennessee Consolidated Retirement System (TCRS) to get further guidance on this issue. TCRS stated that TCA § 8-34-101(14)(B)(i)(b) dealing with “Earnable Compensation” governs this issue. If the bonus is available to all teachers (even though it may be up to the teacher to qualify for the actual funds) or if the bonus is offered to a broad class of employees (such as math teachers), then the bonus should be reported to TCRS and employee/employer contributions withheld. The bonus will be included in the calculation of retirement benefits if within the average final compensation (AFC).

Who will approve differentiated pay plans?

According to T.C.A § 49-3-306(h), the Tennessee Department of Education has approval authority of the differentiated pay plans.

Are there any guidelines around how differentiated pay plans will be approved?

The department will approve differentiated pay plans based on the criteria listed in the State Board policy. Complete information regarding required documents for submission will be shared with districts on October 22, 2013.


Additional questions? Contact Laura Encalade at