The study found that in only one in 270 cases - 71 out of the 19,183 applications - did the scrutineers disagree with the heads' judgments on whether staff should pass the threshold. Ministers paid Cambridge Education Associates around pound;12 million to act as external assessors to check the procedure.
The Exeter University team's research, funded by the Leverhulme Trust, also reveals that the external assessors - paid more than pound;300 a day - spent hundreds of thousands of hours scrutinising paperwork and interviewing staff, but virtually no time observing anyone teach.
The four-strong team could only find one school where assessors had watched lessons out of 1,000 primary and secondaries it surveyed.
The study shows that 97 per cent of teachers who applied to cross the performance threshold on to a higher pay scale, and win an immediate pound;2,000 salary rise, got the cash.
Heads spent on average around two hours on each application - which suggests that, in total, they took 400,000 hours to process 200,000 applications nationwide.
Teachers who failed to cross the threshold were left shocked, upset and bitter. Heads, meanwhile, found telling them they had failed stressful and demoralising.
Ted Wragg, professor of education at Exeter University, said: "The balance is wrong - mountains of paperwork, relatively little concentration on the teaching process and virtually everyone goes through."
The study reveals three-quarters of heads felt the threshold had made little or no difference to what teachers did in the classroom. Only one in five believed it had had any impact. Early indications from a further, unpublished, Exeter study also suggest staff have not changed how they teach.
The main impact of performance pay, the team claims, has been to persuade staff to keep more detailed records of children's work so they have evidence to show assessors.
Threshold applicants are judged in five areas: knowledge and understanding; teaching and assessment; pupil progress; wider professional effectiveness and professional characteristics. The study found it was rare for a teacher to fail overall if they failed in just one area. Heads, who condemned the training they received to assess staff, found it hardest to judge pupil progress.
Some 60 per cent of heads opposed performance pay; 39 per cent backed it in principle but even they were unhappy about it in practice.
This week the National Association of Head Teachers warned that the threshold scheme could collapse because of lack of funding. It claimed the pound;250m allocated for the next two years would pay for only half of those applying.
The TES has learned there will be a White Paper in the autumn giving heads more hiring and firing powers and deregulating teachers' pay and conditions.
It will also give the Education Secretary more control over pay following the Government's humiliating court defeat after the National Union of Teachers challenged its setting of threshold performance criteria.
Have your say on the threshold at www.tes.co.uk