LSE study of the Green Paper pay system for teachers and its effects

David Marsden, Professor of Industrial Relations, Centre for Economic Performance, London School of Economics.

NEWS:

Newsflash: 25.3.2004

We are planning to carry out the third wave of our survey in about six to eight weeks time. We plan to publish a preliminary report on the results later in the summer, together with an overview of the changes since the first survey in 2000.

Newsflash: 10.12.2001
Teachers and performance management: one year on.
(Provisional results) Available for download in PDF format.

Newsflash: 25.05.2001 
Important message from David Marsden

Newsflash: 18.12.2000 
Important message from David Marsden

Teachers before the 'Threshold' - available in HTML and PDF formats.

19-06-2000: An analysis of results from the first wave of the survey of teachers' attitudes to performance pay is available in PDF format.

1. The project
   
   What will be the effects of the Green Paper pay system on teachers' motivation and school performance? How will it affect teachers and their schools this year and in the longer run? The LSE's Centre for Economic Performance (http://cep.lse.ac.uk/) is carrying out an independent, systematic, study of its effects. Our research has two main goals:
   
   a) to improve our understanding of the effects of pay and performance management systems on staff motivation and performance;
   
   b) to help the teachers' unions, management, and the government to identify the main strengths and weaknesses of the new system.
   
   We plan to study teachers' views on pay and their work before and after introduction of the new system. We wish to follow a panel of teachers over a number of years, starting in January 2000, and returning to them twice over the following three years, with a possible third survey after four years. We are using mainly a questionnaire surveys, and plan also a small number of follow-up telephone interviews.

2. Previous CEP research on performance pay in the public services.
   Earlier research by the CEP on performance pay in public services, listed at the end, was based on the civil service, trust hospitals and head teachers. It showed that a great many public servants agreed with the principle of linking pay to performance but were not happy about the operation of their schemes. Although many employees valued the opportunity their appraisals gave them to discuss their work with their line managers, they considered the link with pay harmful. Many reported that performance related pay (PRP) had reduced motivation and morale, yet we also found that a sizeable minority of line managers believed that staff were working harder as a result of PRP. In addition, our study of head teachers highlighted a number of special features of primary and secondary education that are relevant to the design of performance management systems. These include a strong sense of the value of public service, a powerful awareness that schools' success depends on all teachers, practical reservations about the implementation performance pay, and a view that judgemental performance targets were more appropriate for schools than simple statistical indicators.
   
   Before that study, there had been very little published empirical research on the effects of pay on motivation and work performance in real life organisations. We know too, from surveys of employer practice in both the US and Britain, that very few organisations systematically evaluate the effects of the financial incentives they offer their staff. Hence, very few of the claims made about the supposed merits of different types of performance pay system are based on carefully collected, scientific, evidence.
   
   Such evidence as we have shows that existing theories give only limited guidance as to likely outcomes, and that much depends on how performance schemes are designed and operated. It is also likely that the effects of pay and performance management systems evolve over their lifetime. Further research is essential. We hope that our project will help identify where changes are needed in order better to adapt the new system to teachers' needs and aspirations and to management's objectives.

3. The need for a panel study of teachers and schools
   Our previous work suffered two serious limitations: we measured staff attitudes and motivation only after the introduction of performance pay, and we could not directly relate staff perceptions to performance outcomes, for example, by linking line managers' views with those of the staff they supervised. We propose therefore:
   
   a) A 'before and after' study. To assess whether performance pay actually causes motivation and morale to fall, we need to know whether things were any worse under the previous system, and we need to ask the same individuals. It is therefore essential to have a 'before and after' panel study. Because all new pay systems take time to settle down, as the worst glitches are sorted out, we also need at least two further surveys after the introduction of the new system.
   
   b) An evaluation of the new pay system's effects on teachers and their schools. We seek to measure the impact of the new pay system on schools' performance by tracing its effect on individual teachers' motivation and work patterns, and then exploring whether these affect the school as a whole. Our questionnaire to teachers asks about effects on their motivation, morale and work patterns, which we shall compare over time. Our questionnaire to head teachers asks about effects on the school as a whole, from the point of view of its management, as well as about their own pay system.
   
   Our previous research indicates that line managers who carry out appraisals are well placed to evaluate the direct effects on staff performance. We shall not ask heads to comment on any individuals. We also plan to link these with some statistical indicators from other sources, such as the type of school and its local neighbourhood.

4. Confidentiality
   Confidentiality is essential for a good response and for honest replies. The identities of individual teachers replying and their schools will be kept strictly confidential. We need the names and addresses of respondents so that we may send a follow-up questionnaire next year and in two years time, and to carry out a number of statistical checks. No one outside our research team will see the individual replies. The CEP has considerable experience in handling confidential survey data.

5. Output from the study
   We shall write a first report about two months after we have received the January 2000 replies and analysed them. It will be posted on this web site so that all those involved in the study may see its results. We shall do the same after each successive wave, and once we have some panel data, we shall also analyse changes over time.
   
   We plan to hold a number of practitioner seminars for the teachers' organisations and management during the course of the project. We hope to invite also a number of practising teachers. These seminars will most likely be held at the London School of Economics.

6. The independence of our research
   This project is independent of both the teaching unions and the DfEE, and is funded by the Economic and Social Research Council through a grant to the LSE's Centre for Economic Performance. The ESRC is one of the key sources of independent academic research funding in the UK (http://www.esrc.ac.uk).
   
   Nevertheless, we believe that academic research of this kind has to be carried out in close consultation with practitioners, especially management and the teachers' unions. We value the advice and guidance they can give us to ensure that our research is relevant and well-informed. Nevertheless, we believe it is essential that the questions we ask, and the conclusions we draw be completely independent.

7. Further information?
   Please contact me by email on d.marsden@lse.ac.uk.

8. Some publications by the CEP on performance related pay:

   • Marsden D. W., and Richardson R. (1992) Motivation and performance related pay in the public sector: a case study of the Inland Revenue. Discussion Paper no. 75, Centre for Economic Performance, London School of Economics, London. (Available as an Adobe Acrobat document on the CEP's web site).

   • Marsden D. W., and Richardson R. (1994) Performing for pay? The effects of 'merit pay' on motivation in a public service. British Journal of Industrial Relations, 32:2, pp. 243-262, June.

   • Marsden D. W., and French S. (1997) Taxing performance: performance pay at the Inland Revenue. CentrePiece, 2: 2, Summer, pp. 16-21.

   • Marsden D. W., and French S. (1998) What a performance: performance related pay in the public services. Centre for Economic Performance Special Report, London School of Economics, London.

22.3.2000

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