Pay for Performance Where Output is Hard to Measure: The Case of Performance Pay for School Teachers

Abstract

The introduction of performance-related pay with Performance Management in the state school sector of England and Wales represents a considerable change in the school management system. After 2000, all teachers were subject to annual goal setting performance reviews. Experienced teachers were offered an extended pay scale based on performance instead of seniority, and to gain access to the new upper pay scale, teachers had to go through a 'threshold assessment' based on their professional skills and performance. This paper reports the results of a panel survey of classroom and head teachers which started in 2000 just before implementation of the new system, and then after one and after four years of operation. We find that both classroom and head teacher views have changed considerably over time, from initial general skepticism and opposition towards a more positive view, especially among head teachers by 2004. We argue that the adoption of an integrative bargaining approach to performance reviews explains why a growing minority of schools have achieved improved goal setting, and improved pupil attainments as they have implemented performance management. Pay for performance has been one of the measures of organizational support that head teachers could bring to induce changes in teachers' classroom priorities. We argue that the teachers' case shows that a wider range of performance incentives than previously thought can be offered to employees in such occupations, provided that goal setting and performance measurement are approached as a form of negotiation instead of top-down.

Organizational Control Systems and Pay-for-Performance in the Public Service

“…This explains evidence suggesting that in spite of more sophisticated tools for output measurement performance has not improved (e.g. Marsden & Belfield, 2006).…”

Individual employee voice: renegotiation and performance management in public services

“…In contrast, approaching the process from the point of view of integrative bargaining, one would look for evidence of steps to reconcile differences in priorities between classroom and head teachers and signs of a process of compromise. This appears to have happened in a significant number of schools, between a quarter and a third, which have successfully implemented the new system of performance management for schools (see Marsden and Belfield, 2006). The negotiation of change in the teachers' zone of acceptance in these schools is explained below using a simple diagrammatic presentation of some of the options and how the compromise could be reached.…”

“…Similarly, if the school could provide extra support and professional development, then teachers may be able to teach both elements more effectively. Marsden and Belfield (2006) found that many schools used performance management in order to identify organisational support that could be given to teachers, such as easing difficult workloads, providing professional development, and addressing morale problems. For simplicity, the right hand panel focuses simply on the release of teaching time from other activities in order to respect classroom teachers' views on balance, and the head teacher's need for improved attainments.…”

“…Part no doubt also comes from peer pressures from other teachers engaged in the same process, and who feel that the objectives of their own agreements would be jeopardised by colleagues who backslide. One piece of evidence that these agreements did stick where integrative bargaining underpinned performance management is that the schools which appeared to practice it most systematically tended to see their pupil attainments rising faster than the average (Marsden and Belfield 2006).…”

“…These concern the design and establishment of a framework within which such negotiation may take place, and its degree of procedural justice. In the case of many schools, this has been provided by the new system of performance management established in 2000, although it should be stressed that not all schools have taken this opportunity (Marsden and Belfield, 2006). They also concern institutional resources, legal and collective, that build people's confidence that the negotiation will be in good faith.…”