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Can a 2% pay rise motivate top teachers?

Where’s the evidence on performance-related pay for teachers? Monkey Business Images/

The secretary of state for education, Nicky Morgan, has accepted recommendations from the latest School Teachers Review Body (STRB) and agreed to allow a 2% pay rise for top-performing teachers in the UK.

All other teachers will recieve a 1% across-the-board pay uplift. The 2% rise to the “maxima of the main pay range” for teachers was recommended by the STRB as a way of “providing meaningful opportunity for a performance-related pay uplift”. This has rekindled the debate about the efficacy and value of performance-related pay for teachers.

The general evidence on performance-related pay suggests that in limited, easily defined, and measured tasks there is a clear positive relationship between pay systems where workers are directly paid according to units of work completed, such as the number of windscreens installed, and labour productivity. Performance-related pay – particularly in some private sector jobs where individual output can be measured – can be an extremely powerful tool to motivate, create incentives and help to select and retain higher performing workers.

What is much more problematic is designing performance-related pay reward systems for public sector jobs where the output is not always easily measured – such as teaching. There may be more than one output, work is delivered in teams, the effort of individual workers is not easily observed and the objectives of workers are not clear.

How to measure performance in schools

With respect to teachers in a school situation, there are a number of “outputs” that could be measured: the exam scores of the pupils, how much progress the pupils make in a single year (a value-added gain score), or whether the school is turning out well-rounded future citizens. In most schools, pupils are taught by many different teachers, so it’s difficult to ascertain which teacher is responsible for a certain pupil’s success. In many schools the pupil-related objectives of the headteacher may not be exactly the same as those of the governing body or the parents. Any performance-related system should decide which of these count and how they would be measured.

Other factors which may play into this complex process are whether professional standards of behaviour, working practices and the role of trade unions may or may not influence pay scales. There are additional problems in the need to give higher remuneration to those teaching in subjects with teacher shortages and in specific inner city schools. Ultimately, it is very difficult to determine exactly what can be measured in terms of the effort and effectiveness of any specific teacher – so rewarding them for performance is problematic.

Pay rises across the board

So this raises the question of why a government or education authority would ever want to try and implement performance-related pay for teachers.

The answer is that there is very good evidence that raising teacher pay relative to other workers in an economy has a positive effect on the supply of teachers, and can induce better performance in pupils. Yet this does not help in designing an optimal pay package to guarantee a supply of high-quality teachers, nor explain how to link teacher pay to pupil outcomes in a pro-active way.

At the same time, other research has pointed out that across-the-board pay increases for teachers are inefficient. Raising the pay of the existing stock of teachers is unlikely to radically improve their performance. Instead, the best mechanism for improvement is to recruit higher-ability graduates into the profession in the future to induce better performance from pupils.

What happened in 2000

Over the years there have been various attempts at providing differential pay for teachers. In 2000, the idea was to give a “threshold payment” to those teachers who met acceptable standards. The performance management arrangement had two main elements. First, each teacher was to be appraised annually by his or her senior line manager, on the basis of previously agreed objectives. At the second performance review stage, the assessment was used by the headteacher as a basis for teacher pay decisions in the coming year.

The idea was that individuals who could prove themselves to be effective teachers, assessed against a set of nationally agreed criteria, would “cross the threshold”, receiving an immediate £2,000 pay rise and access to a new higher pay scale for classroom teachers. Around 80% of teachers who were eligible for the threshold payment when performance-related pay was introduced in 2000 applied for it, and around 97% actually received it. It was hardly a selective, functioning system.

Pay rises not the only answer

It is unclear how the present proposals of the 2% rise could be allocated to the best teachers – but one presumes that like in 2000, it can be done via an annual appraisal. Again this would be open to manipulation. The reality is that headteachers already have considerable scope for discretionary pay increments which they do not use much, and indeed the STRB has made reference to this in the past. It is also unclear how many people would “go the extra mile” for a 2% increase of gross pay – a little over 1% net.

It is by and large an empirical question as to whether any specific peformance-related pay scheme would actually improve teacher performance. The rigorous evaluation of any proposed scheme is not possible since the scheme – both in 2000 and now – was introduced nationally. Earlier evidence from elsewhere in the world does not tend not to support performance-related pay schemes in schools. Over time, most performance-related pay schemes for teachers have collapsed and there is evidence that the ability of such schemes to motivate staff is limited.

Media attention to the 2% pay rise is in danger of losing sight of the real issues. These include the need to have higher relative pay in teaching compared to other graduate professions to induce more of our high-flying graduates to take up the profession, and using the discretionary pay which is already possible more creatively. Schools should also be encouraged to provide pay premiums to teachers in shortage subjects and difficult inner city schools.

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