Category Archives: Performance Related pay

Performance Related Pay Back In Favour?

performance related pay

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Michael Gove recently announced the introduction of performance related pay in the teaching industry from September 2014 http://www.theguardian.com/education/2013/jan/15/teachers-pay-performance-michael-gove  Instead of automatic annual increments progressing through the grade, teachers will be expected to demonstrate good performance before receiving a pay increase.  Schools should be working on how they will put a procedure into place.  This is not a new phenomenon.  When I was working for the Probation Service over fifteen years ago, it was introduced for the senior management team.  So is performance related pay back in favour?

The idea is that performance related pay (or merit pay) will reward excellent teachers more money and hopefully incentivise poor performers to increase the quality of their teaching.  Teachers’ performance will have to be closely appraised so that the link between performance and pay is very clear.  Whilst there are good and bad teachers in the education system, there are advantages and disadvantages with this idea.

The plan is for performance related pay to increase flexibility in schools, to attract and retain quality teachers, to attract more graduates into the profession and create a culture of professional development.

A report produced by the Policy Exchange about performance related pay and teachers stated that a well designed system should include:

  • An evaluation based on several measures, not just test or exam scores.
  • A prolonged evaluation over more than one year to reduce volatility in results and to allow staff to adjust to the new assessments.
  • Financial rewards based on increases in base salary, rather than through bonuses.
  • The use of performance pay to recruit and retain effective teachers, including the use of Pupil Premium funds to pay for this.
  • The use of performance pay not as a way of holding down pay, but as a reward for real excellence. This may require the redesign of teacher pay bands within a school.

Teachers’ performance may be assessed on a range of areas according to government guidelines:

  • impact on pupil progress
  • impact on wider outcomes for pupils
  • contribution to improvements in other areas (eg pupils’ behaviour or lesson planning)
  • professional and career development
  • wider contribution to the work of the school, for instance their involvement in school business outside the classroom

In the past it has been difficult to introduce performance related pay into the public sector due to the difficulty of measuring performance in certain roles.

The rationale of linking high performance to pay attempts to develop a high performance culture and should provide equity and fairness. It is widely used in the private sector with many managers receiving it rather than low grade workers.

For performance related pay to be valued by employees there needs to be a clear link between good performance and pay.  One barrier to its effective use is subjectivity of the line manager.  They should receive thorough training in the operation of the appraisal system with lots of openness and transparency.  The variances between hard and soft managers needs to be managed and favouritism dispensed with.  The issue of possible discrimination needs to be addressed when training and educating the managerial workforce.

The element of performance related pay needs to be worthwhile, as with any employee reward. Too little and it will not be sufficiently motivating.  The pay budget will have its limits and must be distributed appropriately across those who are performing well.

 

 

 

 

Performance Related Pay – Carrot or Stick?

Teachers across the UK have begun to strike causing chaos in the many schools that have had to close placing extra burdens on working parents.  The teachers are striking about government plans to change pensions.  They are also concerned about increasing workloads and the introduction of performance related pay from September this year.

The government wants to introduce controversial performance related pay in an effort to raise standards in schools.  The long standing practice of linking pay to increasing length of service will end.  The teachers are not convinced – a poll done by YouGov on 1,000 teachers resulted in 16% who would like pay linked to results, 44% who didn’t and 44% who said it would not make a difference.  Many teachers fear the admniistrative burden of the introduction of performance related pay.

Performance related pay links pay progression to the assessment of individual performance according to set objectives.  It has been extensively used since the 1980s as employers sought to improve profits through employee reward. It works best where the employee’s contribution or input is measured alongside their output therefore being a more holistic approach. It does help to retain key talent.

An advantage of performance related pay (PRP) is that it can be motivational.  However it only works for those individuals who are motivated by financial reward, but many employees are not.  More often job satisfaction and doing a job well is more rewarding than an increase in the pay packet. PRP can nevertheless help to motivate unproductive employees.

PRP can embed a high performance culture but only if it is managed consistently and fairly. PRP promotes fairness and equity with the idea that employees who work harder than others should be rewarded for that effort.  However it can cause a rift between those employees who are rewarded and those who are not.

The process works much better in the private sector than the public sector.  In fact it is the norm in many private sector organisations particularly financial services.  Many public sectors workers are used to receiving their annual increase based on continued service.  It does not encourage motivation to improve job standards when workers know they will get an increase regardless.  Perhaps this is why so many teachers are up in arms.

Measuring performance is key to the effective operation of PRP as well as the consistent operation and objectivity of line managers.

The recession put employee reward on the back burner so that even pay increases were scrubbed.  Perhaps now the country’s economy shows signs of improving performance related pay along with other forms of employee reward will be put back firmly on the agenda.

As for the striking teachers only time will tell whether they will accept the government’s initiative or not and how quickly their differences can be settled.

http://www.bbc.co.uk/news/education-24347235