Introducing performance-related pay to schools will drive up the quality of teaching and force underperformers to "improve or exit the profession", a new report claims.
But linking teachers' pay more closely to performance will have little impact unless schools are prepared to make "difficult decisions" and deny pay rises to some staff, the report by right-leaning UK thinktank Policy Exchange argues.
Although performance pay systems have been introduced in many countries, the approach has generated significant controversy. Classroom unions across the world have vociferously opposed pay reforms, sparking large-scale strikes in England and several US cities in recent months.
But a Policy Exchange report, published today, argues that performance pay will attract more graduates into the classroom, create a "strong culture of professional development" among teachers, and incentivise those in the profession to improve the quality of their teaching.
Pay should not be linked too crudely to students' test scores, the report says; rather, it should be based on a number of measures and calculated over several years to lessen the impact of exam results' "volatility". Nor should performance pay be used as an excuse for "holding down pay" in schools: a well-designed system "should not drive perverse incentives nor cause division between teachers", the report adds, addressing two common criticisms from opponents of performance pay.
"We want to treat teachers like professionals," Jonathan Simons, head of education at the thinktank, told TES. "And we want schools to have the flexibility to reward and retain their best teachers and to use them to improve outcomes for young people... But we agree with the thoughtful teachers who support this in principle but are cautious about how this will be implemented. To see the benefits we need to have a carefully designed system that works properly and that is transparent and fair."
The onus must be on schools to embrace the new pay policy, the report insists: "If the schools do not want to differentiate between their staff members, make difficult decisions and have potentially difficult conversations, then performance-related pay will have little effect."
Evidence of the scheme's impact internationally is mixed, the report concedes. Two Indian studies demonstrated that performance pay led to "sustained improved test scores over multiple years and a large reduction in teacher absenteeism", it says. It also points to further research demonstrating positive impacts in Kenya, Israel and several US states. However, studies in Tennessee and New York recorded "either limited or no demonstrable increase in pupil performance", while a system put in place in Portugal actually led to a fall in attainment.
England's new pay structure, which takes effect this year, abolishes automatic pay rises for teachers, with school leaders given the freedom to make salary decisions. According to the report, this should aid the "recruitment and retention of desirable candidates into teaching, encourage the best teachers to stay in teaching and give clear messages to underperformers to improve or exit the profession".
Russell Hobby, general secretary of the NAHT headteachers' union, warned against "raising the stakes" for all teachers. "A competent performer may not progress along the pay spine but that doesn't mean they are a poor performer," he said. "We don't want to see a binary system where you're either up or out.
"Being a headteacher is a difficult job, which involves making difficult decisions. It can mean having to make painful decisions. We need to make sure schools have the skills they need."
A survey released this week, commissioned by the NUT teaching union, found that 81 per cent of respondents thought that performance pay would not improve outcomes for students.
Kevin Courtney, deputy general secretary of the NUT - which, along with the NASUWT teaching union, held regional strikes in England last term, partly in response to the new pay structure - disputed Policy Exchange's conclusions.
"Measuring teachers' individual contributions is next to impossible," he said. "Teaching is based on teamwork and every teacher contributes in some way to a student's development. Decisions will be unfair, subjective or even discriminatory. They will be based on headteachers' personal likes and dislikes, schools' funding positions and many other reasons not based on 'performance' at all."
Mary Bousted, general secretary of the Association of Teachers and Lecturers, warned that schools would struggle to afford pay rises "without cutting the pay or numbers of other teachers or support staff", adding: "It is a mystery how this will enable schools in deprived areas to attract the best teachers."