Exploring Performance Related Pay

The education sector stands at a potential inflection point, facing legislative shifts and evolving expectations around teachers’ remuneration and benefits. Teacher recruitment and retention challenges are at their peak. Following the Department for Education’s (DfE) removal of the statutory requirement for performance-related pay (PRP) within the School Teachers Pay and Conditions Document (STPCD), reverting to automatic progression, a critical question arises: will academies and trusts, which have historically had the freedom to move away from this, continue to adhere to it?  

Performance related pay (PRP) came into force in 2013 with the hope that it would improve performance and retention issues. The principle was straightforward: motivating staff to meet or exceed targets while rewarding high performers. However, the effectiveness of PRP in the education sector remains debatable.  

Research by B George & Z van der Wal suggests that while the impact of PRP is statistically significant and positive, the effects sizes suggest it is not a ‘magic bullet.’ PRP has been notably effective within the private sector but its impact on the education sector has been mixed. 

A 2015 survey revealed that 99% of maintained schools and 62% of academies had implemented PRP, aligning their pay and appraisal policies accordingly (Sharp et al., 2017).   However, subsequent research by Anders et al. (2021) found that the 2013 pay reforms inadvertently led to a 1-2% overall decline in pay relative to what would have occurred otherwise, accompanied by decreased retention rates in schools adopting PRP. Similarly, a study by the Organisation for Economic Co-operation and Development (OECD) concluded that there is no discernible relationship between PRP schemes and improved student performance.  

Moreover, intrinsic motivation appears to play a more significant role in teaching effectiveness. Factors like teacher support and self-efficacy are key to academic performance, as highlighted in a study from the European Journal of Psychology of Education. This aligns with findings from the Education Endowment Foundation (EEF), which reported that resources are better spent on high-quality professional development rather than performance-linked pay.  

The removal of the requirement for performance-related pay for maintained schools presents HR and school leaders with a timely opportunity to re-evaluate remuneration strategies, aligning them more closely with the needs of teachers and educational outcomes. However, the question still remains will the majority of academy trusts follow suit? Such a shift would align with a broader sector trend prioritising supportive work cultures that emphasise collective success over individual performance metrics.  

Despite its challenges, PRP can offer some benefits. For trusts that have implemented transparent appraisal processes and used a range of performance indicators, rather than narrow metrics, PRP has informed pay decisions without being overly dependent on rigid performance measures. Such approaches may still motivate teachers while avoiding the negative impacts of traditional PRP systems.  

However, PRP’s drawbacks, such as amplifying workload pressures and fostering competitive rather than collaborative environments, remain significant. Trade unions, such as the NEU, argue that PRP weakens appraisal processes, discouraging open, constructive discussions about professional growth. Teachers are less likely to seek support when appraisal outcomes directly influence pay progression.  

Automatic pay progression offers a contrasting model, providing stability and predictability in teachers’ remuneration. This approach can reduce administrative burdens and stress associated with PRP. However, it also places additional financial pressure on schools and trusts, requiring robust financial planning to manage tight budgets effectively. While beneficial for teacher well-being and morale, automatic progression necessitates careful alignment with other resources to maintain sustainability.  

Schools and trusts will need to ensure they continue to improve educational standards through ensuring a robust appraisal system, which is supportive of professional development. Prioritising collaborative practices, such as peer reviews and shared best practices, offers accountability while adopting a supportive culture. Investing in tailored professional development aligned with school improvement goals helps maintain high standards and supports staff growth, ensuring educational excellence without relying on pay incentives.  

The removal of mandatory PRP offers an opportunity for HR and school leaders to re-evaluate remuneration strategies. They may face resistance from staff who are accustomed to the accountability PRP provides. However, schools and trusts can leverage this moment to align pay policies with a broader emphasis on supportive work cultures. Career pathways and competency-based models, rewarding teachers for skill development, specialisms, and contributions to the school/trust community, can replace PRP with a more holistic approach to remuneration.  

For Academies and Trusts retaining PRP, embedding effective change management strategies will be crucial.  Leaders and HR teams will need to communicate the benefits of the revised approach clearly, showing how it aligns with educational values and supports teacher well-being. Involving staff throughout, and particularly those that are resistant, will be key to helping all staff to understand the change process.  Supporting a culture of collaboration and transparency can help Academies and Trusts promote long-term teacher retention. 

As schools and trusts navigate these changes, now is the time for creative thinking in recognising and rewarding outstanding teachers. Clear career pathways, intrinsic motivation, and professional growth opportunities can drive sustainable improvements, benefiting teachers and students alike.