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

Richard Belfield and David Marsden

CEP Discussion Papers from Centre for Economic Performance, LSE

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.

Keywords: Education; teachers; performance related pay; public sector; compensation; industrial relations (search for similar items in EconPapers)
JEL-codes: I2 J33 J45 M52 (search for similar items in EconPapers)
Date: 2006-08
New Economics Papers: this item is included in nep-bec, nep-cse, nep-edu, nep-lab, nep-ltv and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Working Paper: Pay for performance where output is hard to measure: the case of performance pay for school teachers (2006) Downloads
Working Paper: Pay for performance where output is hard to measure: the case of performance pay for school teachers (2006) Downloads
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