The Performance Related Pay Timebomb

Guest Post written by Bruce Grieg

performance related pay

Performance related pay policies are starting to unravel…

Performance related pay progression for school teachers has been around since 2014. Over the next year or so I think we are going to see this policy quietly unravel.

Why?

Lots of teachers who were starting off at the bottom of the main pay scale back in 2014 will likely have now received their final performance related pay increase. All the problems with performance related pay will now start bubbling up to the surface.

What problems? Surely performance related pay is a good thing? If people do a good job, they should be paid more, right?

That’s the superficial and trite justification for performance related pay rolled out by the DfE at the time of its introduction.

The DfE and the School Teachers Pay Review Board trotted out lots of “evidence” supporting the introduction of performance related pay. But the evidence they relied on fell broadly into two categories. Some of it demonstrated that performance related pay didn’t work at all; or wasn’t really evidence at all, but just anecdotes about how the private sector used performance related pay (STRB 2012, Chapter 2).

What was glaringly missing from this evidence, for anyone (like me) with a cursory knowledge of the field, was the academic research into performance related pay.

There is a large body of research looking at what happens when you pay people more if they do a good job. And that research tends to show that the more money at stake, the worse people perform.

For example, Professor Daniel Ariely at MIT has carried out many experiments which all fall into some variation on this theme: subjects are asked to perform a challenging intellectual task and are paid money if they perform that task well. A control group does the same task, but is just paid for their time regardless of how well they perform.

In many different variations of these experiments, people tend to do worse if their reward depends on how well they perform. Even in rural India, where the amount of money on offer for top performance was equivalent to six months of household expenditure, people did better if they were just paid a fixed amount for their time. You’d think that if you offered someone a small fortune for completing some demanding cognitive task to a certain standard, they would try really hard to earn that money. But no: if you just pay people a fixed amount to do the tasks, they do it better than those who are offered a huge reward for doing it well.

(Source: http://www.bos.frb.org/economic/wp/wp2005/wp0511.pdf)

So what’s the explanation for the performance-related pay results?

One explanation is that having a lot of money at stake creates too much stress on the participant and they just perform less well. If they can relax knowing the money is guaranteed, even if there is less on offer than the “performance pay” group is getting, they do a better job of the task.

Does this sound familiar? Teachers under stress? Linking pay to performance surely increases teacher stress, even for the best teachers. And that might well make them perform less well in the classroom.

A more nuanced explanation is that once you make money the prime incentive, you lose the other incentives which were there before. The greatest reward for completing challenging work is really the intrinsic satisfaction it creates. Whether that’s solving a scientific conundrum or getting all of your bottom set in maths to pass their GCSE. But once you start introducing a financial reward for doing a better job, you lose the intrinsic reward.

I think that’s what we are likely to see soon. There is a cohort of teachers out there who have had five years steadily working up the main pay scale. Each year they’ll have been told that they have earned extra money because they have been doing a great job. Next year they’ll be again told they’ve done a great job. But they won’t be paid any more for it.

This probably won’t lead to newspaper headlines and strikes and resignations. It is very hard to complain loudly about people supposedly being paid more for doing a better job. But I think school leaders will start to see quiet discontent seeping into staff rooms in schools around the country, as this performance related pay policy slowly unravels.

Author Bio:

Bruce Greig is an entrepreneur and school governor. He served as CoG through two Ofsted inspections and four headteachers. He set up SchoolStaffSurveys.com after discovering how enlightening an anonymous staff survey can be and decided to make it easy for every school to run them. He has previously built businesses in property maintenance and technology sectors.

Website: www.schoolstaffsurveys.com

Twitter: @schoolstaffsurv


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