Findings from a study that designed a theoretical compensation system for school administrators incorporating concepts of career/work development and adult life stages are presented in this paper. Methodology involved: a literature review of compensation practices in education; a discussion of new forces in the field affecting considerations in compensation design; a description of theoretical models and their rationale, the development of a simulation to project comparisons between existing and alternative approaches, and some discussion of the potential of alternative compensation plans to influence recruitment and retention of existing labor force. Findings indicate that: (1) substantial research and theory support a reward system based on adult life stages and/or work and career phases; (2) an adult life stage compensation plan developed and paid annually over an individual's lifetime can benefit both the individual and the employing organization; and (3) an adult life stage system provides remuneration to employees during their most productive periods at salary levels that recognize their contributions to the school. Three tables and six figures are included. (20 references) (Author/LMI)