The purpose of the study was to identify variables associated with the level of average principals' salaries in the school divisions of Virginia. Predictions were on the variables found to be associated with average principals' salaries--fiscal capacity, average daily membership, the education level of citizens, per pupil expenditure, and average household income. Data from 133 school divisions for the 1994-95 school year were used in the analysis.

Stepwise regression method was employed. Residuals were used to form three groups of school divisions: those divisions paying constantly more than their predicted average adjusted salary (12,600 to 2716); those paying about their predicted average salary (2715 to -2785); and those paying considerably less than predicted (-2786 to -14212). The groups were plotted on a map of Virginia to determine whether clusters of high positive, middle and, high negative residual divisions were evident. The clusters were reviewed to interpret whether contiguous divisions adjusted their salary levels to be competitive with their neighbors. Twenty-four school superintendents or personnel administrators were randomly selected from the clusters and interviewed to help identify the variables school divisions used to set salaries of principals, and how the data in this study might be used.

Fifty-nine percent of the variance in average principals' salaries was explained by average daily membership, average education level, per pupil expenditure, and average household income. Except for local fiscal capacity, all variables were found to have a significant relationship (p .01) to average division principals' salaries. Grouping of residuals by size and proximity revealed clusters of division salaries appeared to be adjusted to be competitive with neighboring divisions. The interviews from the superintendents or personnel directors revealed similar results of setting salaries by comparing to neighboring divisions. At all residual levels, salaries in comparing neighboring divisions appeared more often as a theme from the interviews when setting salary schedules for principals. Further results from the interviews revealed, the data might be used to compare average principals' salaries with divisions which are competitive and contiguous.

Based on the data, a large number of school divisions did not pay average principals' salaries according to their predicted levels; they appeared to base principals' salaries on other variables, including the desire to stay competitive with contiguous or neighboring divisions.