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An Evaluation of Performance Related Pay and its Viability Within Public Sector Education

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An Evaluation of Performance Related Pay and its Viability Within Public Sector Education Matthew Osborne April 2001 Chapter index Abstract Chapter 1 1.1 Proposition Chapter 2 - Introduction 2.1 Status of PRP in 21st century 2.2 Why chosen subject? 2.3 What is it going to be studied? 2.4 In what way will performance related pay be studied? Chapter 3 3.1 Origins and direction of PRP 3.2 PRP theory 3.2.1 Definition 3.2.3 Benefits Flexibility Focus on objectives Motivation Encourages good performers/discourages poor ones 3.2.4 Disadvantages Ease of measurement (especially public sector) Measurement balance Subjective judgements Feedback Financial Constraints 3.3 Performance Related Pay Systems 3.3.1 Merit Rating 3.3.2 Performance against objectives 3.3.3 Profit related pay 3.3.4 Job Evaluation 3.3.5 Business objectives matrix (as used in services) Concept Importance of improving office productivity How to value outputs Development of performance measures Indexing performance measures Chapter 4 Evaluation of the Green Paper Proposals 4.1 Introduction 4.1.2 Scheme of PRP 4.1.3 Organisation of Evaluation 4.2 Government Proposals 4.2.1 The Current System 4.2.2 Origins of the System Outline 4.2.4 The threshold 4.2.5 Overview 4.2.5 Overview 4.3 Research Method 4.4 Reactions to the proposals 4.4.1 How will the reactions be studied? 4.4.2 Recruitment, Retention and Motivation Recruitment Retention Motivation Business Objectives Matrix Merit Rating Herzberg Porter and Lawler's Expectancy Theory Richardson Methods of assessment 4.5 Discussion 4.5.1 Individual Barriers 4.5.2 Organisational Barriers 4.5.3 And Finally... Abstract The purpose of this study is to investigate performance related pay (PRP) and its viability within public sector education. The main theme of this study will be centred on the new government initiative to introduce performance related pay in schools through the Threshold system. This has been recently introduced as part of a new performance management scheme as outlined in the government green paper 'Teachers: Facing the challenge of change'. ...read more.


This suggests that despite the first round of threshold being rewarded there is likely to be change in the system before the next. This on the whole means that the system will firstly be difficult to judge, due to its many elements and secondly difficult to compare and contrast due to the changing nature of the system. 4.1.3 Organisation of Evaluation The report on PRP in education will be split into two areas. Firstly, the actual system will be described, including any proposals for the future, and secondly the results of the research questionnaire 'Performance Related Pay in Teaching' will be analysed. The responses will be analysed in the context of social science theory which was discussed briefly in Chapters two and three of this study. 4.2 Government Proposals 4.2.1 The Current System The current system that governs pay in public sector teaching is based on a 9-point scale. A teacher stars the scale on points 0 to 2 depending qualification and negotiation. Future increments are applied annually for experience. Typicality a teacher would have one point applied per year for experience. The only teachers who are able to exceed this 9-point scale are teachers who take on extra responsibility such as heads of department and school management. Typical teachers would find themselves unable to progress any further once they have reached the top end of the 9-point scale. This system is simple and requires little administration. It requires little use of subjective judgements on behalf of school management and little effort on behalf of the teachers on the scale. However, this has not stopped the government's willingness to change the system. The aim of this is to offer reward for effective and willing teachers and differentiate them from the teachers who are under performing. The government holds the assumption that is possible to achieve higher standards in education and aims to do this through performance management linked to an element of PRP. ...read more.


This could lead to the organisational culture changing through the ranks. With respect to organisational performance on the whole it is also important to target those who will be most influential. For example, if pupil results are being targeted overall there may be little case for using PRP for educational managers as much for those in actual direct contact with the children. The government has to ensure that school culture is more concerned with total organisational performance rather than the performance of the individual if it wants its system to work. 4.5.3 And Finally... Despite this commentary pointing out the many perceived flaws in the new system it is important to note that the old system was not exactly ideal. Firstly, pay was not being reviewed on a performance basis at regular intervals. This is important in any organisation. Secondly an organisations financial outgoing should be related to its goals in at least some way. Lawler (1990) points out that pay needs to be 'strategic'. In both the above ways the government is seeking to improve the overall management of schools in England and Wales. What needs to be understood is that as the schools themselves are managing the system, no matter what their opposition they will seek to mould the system into the culture of their organisation. An example of this is the National Union of Teacher's (NUT) offer to support and aid any of its member's applications to pass the threshold. Considering their opposition to the system on the whole it can be seen how different organisations are learning to adapt to the system. Also in Overton Grange School, Sutton 14 teachers applied to pass the threshold, despite the majority of these teachers being against the system overall. Even the government is constantly adapting and changing the system, most recently talking of 'performance related promotion'. The government is right when it says that a 'leap of faith' is required for the system to work and this is obviously being taken by all parties. ...read more.

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