AUGUSTA — Principals of the city’s schools have a unique provision in their new contract: If students at their schools do better academically, administrators will do better financially.

The one-year deal inked recently between the Board of Education and Augusta Administrators’ Association contains incentives for principals and directors to earn extra money based on standardized test scores.

For example, if third-graders at one of the city’s elementary schools increase their scores in math or reading on the New England Common Assessment Program test by one point, the principal of that school gets paid an additional $500.

Principals also receive an additional $1,000 if their schools make or meet “adequate yearly progress” as determined by the state Department of Education.

Incentives are capped at $4,000 per person.

Administrators agreed to give up some retirement bonus provisions in their previous contracts in exchange for the new incentives, school officials said.

“We want to pay people to perform while they’re here, not in retirement,” said Superintendent Cornelia Brown.

The deal — proposed by the Board of Education’s negotiating team and accepted by the Augusta Administrators’ Association — applies to principals and other school administrators, such as the special education, adult education and Capital Area Technical Center directors, all of whom are represented by the association.

“We agreed to it because we believe in increasing student achievement,” said Donna Madore, special education director and president of the association. “We thought it shows good faith in what we do. And we saw it as an opportunity to encourage student performance and support what our staff is doing, as well.”

Madore acknowledged student performance can be affected by variables beyond the control of school administrators, but said association members are committed to overcome those.

“There may be (factors impacting student achievement beyond the control of administrators), but we’re faced with barriers every day,” she said. “We can’t use those as excuses. We’re here to teach all kids. No excuses.”

Board of Education member Susan Campbell, a leader in the contract negotiations, said the incentives could be a way to tie performance to pay. Such incentives are sometimes offered by some private businesses, but they have sparked controversy whenever they’re mentioned in national education reform debates.

“We’ve been trying for years to increase student achievement,” Campbell said. “It is a way to compensate somebody for doing a good job. We proposed it and administrators were very receptive to the idea. Whatever we can do to help make sure, when these kids graduate, they’re ready for secondary school or the job market. There’s always room for improvement.”

Brown noted the move comes at a time when merit pay is being discussed nationally and statewide, including statements by state Education Commissioner Stephen Bowen in favor of merit pay for teachers.

Campbell said the board would be open to considering similar incentives for others in Augusta, even teachers.

“If it’s appropriate and they’re open to the idea, we’d certainly entertain the discussion,” she said.

Brown, whose contract expires in 2013, said her next one likely will include similar incentives.

“I’d expect some of these things, maybe all, will become part of the superintendent’s contract, as well,” Brown said. “It’s really about improving student performance and achievement.”

Gains in student performance will be measured by NECAP test results in grades 3-8, and SAT scores in grade 11.

Other methods will be used to determine student achievement to award incentive pay to other administrators — for instance, the adult-education director would get incentives for increases in the percentage of adult education students receiving a diploma or GED.

Brown said other terms of the new contracts are similar to those previously ratified for teachers and other school staff: Administrators will receive 1 percent salary increases, with no step increases. And they will pick up a larger share of their health insurance.

Brown said the budget approved for the coming school year included enough funds to cover the 1 percent salary increase. She said savings in health insurance, due to administrators picking up a larger share, would, in large measure, provide enough funds to cover the additional incentive-based bonuses.

Madore said administrators in Augusta have never had performance pay as part of the contracts, and she had not heard of such incentives in contracts at other Maine school systems, either.

Campbell, president-elect of the Maine School Boards Association, said colleagues she has talked to at the state level were not aware of many other school systems with similar incentives tied to student performance.

Keith Edwards — 621-5647

kedwards@centralmaine.com