‘Performance’ Without Pay? Managing School Budgets Under Performance Related Pay: Evidence from the First Year of PRP

Abstract

: This paper reports research in ten secondary schools in London and East Anglia on the first year of the performance related pay (PRP) scheme for teachers introduced by the (UK) Labour Government. It focuses on tensions between the resultant additional claims on school budgets created by PRP and the Government's refusal to guarantee that such additions to the pay bill will be centrally funded on a long‐term basis. The research involved semi‐structured interviews with heads and staff with specific responsibility for managing the school budget. It was designed to explore strategic responses to reconciling the operation of PRP in an uncertain funding environment with school performance management. Two types of strategy were contrasted: ‘forced distribution’ where PRP awards were effectively rationed to the available financial resources and ‘accommodation’ where a criterion based approach was taken to PRP and increases in the pay bill stemming from PRP would be absorbed by cutting non‐teaching pay components of the budget or increasing school income. It was found that the overwhelming majority of heads interviewed rejected forced distribution on the grounds that it undermined performance management in schools and created equity problems in the pay system. However, school managers were doubtful of scope for accommodation in the context of the limited scope for cutting expenditure without damaging standards and the difficulties of finding new income streams for schools.

The NPM Agenda: Back to the Future

“…Plans to introduce greater financial incentives to stimulate greater activity from doctors are seen as too limited (Maynard and Bloor, 2004), as misguided (Flint, 2004) and as unworkable (Skilton, 2004). 5 The difficulties of this approach in education have been discussed at length by Cutler and Waine (2004). Indeed, as the difficulties of managing public enterprises present a significantly more challenging order of difficulty for managers (Metcalfe, 1993) and there is evidence of the adverse consequences (short term focus, imprecise measures of human capital) of payment by results systems in the private sector (Widener, 2006), it should not be a surprise that difficulties are encountered with incentive systems in the more complex setting of the public sector.…”

The theatricality of accountability: The operation of governing bodies in schools

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Performanceforringende effekter af performancerelateret aflønning i den offentlige sektor?

“…I den offentlige sektor er der typisk begraensede midler til performance-relateret løn (Perry 2009;Marsden & Richardson 1994;Makinson 2000;Cutler & Waine 2004). Det kan derfor vaere vanskeligt at imødekomme selv berettigede forventninger til performance-relateret afl ønning, for selv om performance øges, følger midlerne til større løn ikke nødvendigvis med.…”