IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/4675.html
   My bibliography  Save this paper

Pay for performance where output is hard to measure: the case of performance pay for school teachers

Author

Listed:
  • Marsden, David
  • Belfield, Richard

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.

Suggested Citation

  • Marsden, David & Belfield, Richard, 2006. "Pay for performance where output is hard to measure: the case of performance pay for school teachers," LSE Research Online Documents on Economics 4675, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:4675
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/4675/
    File Function: Open access version.
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Richard Belfield & David Marsden, 2005. "Performance Pay for Teachers: Linking Individual and Organisational Level Targets," CEP Discussion Papers dp0703, Centre for Economic Performance, LSE.
    2. Teulings,Coen & Hartog,Joop, 2008. "Corporatism or Competition?," Cambridge Books, Cambridge University Press, number 9780521049399.
    3. Marsden, David, 2000. "Teachers before the 'threshold'," LSE Research Online Documents on Economics 3641, London School of Economics and Political Science, LSE Library.
    4. Nick Adnett, 2003. "Commentary. Reforming teachers' pay: incentive payments, collegiate ethos and UK policy," Cambridge Journal of Economics, Oxford University Press, vol. 27(1), pages 145-157, January.
    5. Robert Gibbons, 1998. "Incentives in Organizations," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 115-132, Fall.
    6. Atkinson, Adele & Burgess, Simon & Croxson, Bronwyn & Gregg, Paul & Propper, Carol & Slater, Helen & Wilson, Deborah, 2009. "Evaluating the impact of performance-related pay for teachers in England," Labour Economics, Elsevier, vol. 16(3), pages 251-261, June.
    7. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
    8. James M. Malcomson, 1997. "Contracts, Hold-Up, and Labor Markets," Journal of Economic Literature, American Economic Association, vol. 35(4), pages 1916-1957, December.
    9. Victor Lavy, 2002. "Evaluating the Effect of Teachers' Group Performance Incentives on Pupil Achievement," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1286-1317, December.
    10. Howard Glennerster, 2002. "United Kingdom Education 1997--2001," Oxford Review of Economic Policy, Oxford University Press, vol. 18(2), pages 120-136, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Marsden, 2006. "Individual Employee Voice: Renegotiation and Performance Management in Public Services," CEP Discussion Papers dp0752, Centre for Economic Performance, LSE.
    2. Marsden, David, 2009. "The paradox of performance related pay systems: ‘why do we keep adopting them in the face of evidence that they fail to motivate?’," LSE Research Online Documents on Economics 25357, London School of Economics and Political Science, LSE Library.
    3. Helen Simpson, 2009. "Productivity In Public Services," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 250-276, April.
    4. Marsden, David, 2015. "Teachers and performance pay in 2014: first results of a survey," LSE Research Online Documents on Economics 61030, London School of Economics and Political Science, LSE Library.
    5. Michael J. Podgursky & Matthew G. Springer, 2007. "Teacher performance pay: A review," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(4), pages 909-950.

    More about this item

    Keywords

    Education; teachers; performance related pay; public sector; compensation; industrial relations;

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:4675. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (LSERO Manager). General contact details of provider: http://edirc.repec.org/data/lsepsuk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.