Pay for Performance Where Output is Hard to Measure: the Case of Performance Pay for School Teachers
AbstractThe 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.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0747.
Date of creation: Aug 2006
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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP
Education; teachers; performance related pay; public sector; compensation; industrial relations;
Find related papers by JEL classification:
- I2 - Health, Education, and Welfare - - Education
- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
- J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
- M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-12-22 (All new papers)
- NEP-BEC-2006-12-22 (Business Economics)
- NEP-CSE-2006-12-22 (Economics of Strategic Management)
- NEP-EDU-2006-12-22 (Education)
- NEP-LAB-2006-12-22 (Labour Economics)
- NEP-LTV-2006-12-22 (Unemployment, Inequality & Poverty)
- NEP-URE-2006-12-22 (Urban & Real Estate Economics)
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