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CEP discussion paper
Performance Pay for Teachers: Linking Individual and Organisational Level Targets
Richard Belfield and David Marsden
August 2005
Paper No' CEPDP0703:
Full Paper (pdf)

JEL Classification: I2; J33; J45; M52

Tags: education; teachers; performance related pay; public sector; compensation; industrial relations

The introduction of performance-related pay and performance management schemes in the maintained, state, school sector represents a considerable change in the school management system. This paper combines the results of opinion surveys of classroom and head teachers with Department for Education and Skills school performance data to consider the operation and impact of the new system in England since 2000. We find that teachers’ response to the new system closely resembles that of other groups of public service workers to similar schemes. In particular, teachers appear not to be greatly motivated by the financial-incentive element of the system. However, the goal-setting and appraisal aspect of the system is steadily establishing itself in schools, and seems to be giving rise to a better alignment of teacher and school objectives and with those of nationallevel policy objectives. We present tentative evidence that improvements in goal setting within schools are positively related to rising pupil academic performance.