Performance-related pay is failing to make teachers feel more motivated but is improving schools' management and pupils' results.
These were the findings of academics at the London School of Economics who have regularly surveyed teachers and heads since PRP was introduced to schools in England and Wales five years ago.
David Marsden, professor of industrial relations, and Richard Belfield, a research associate, said PRP had been widely maligned but was growing in popularity among teachers and proving to be "more than a mere paper exercise".
They surveyed more than 300 heads and 1,000 teachers last year, following up surveys from 2001 and from 2000, before the system was introduced.
They found that teachers remained cynical about the effect the scheme had on their motivation. Only about a quarter said they felt the money was enough to make them work harder.
Professor Marsden said the lack of motivation was striking given the increases in performance pay over the past five years, yet was consistent with other research which showed that teachers "see pay as a source of dissatisfaction, but not as a primary source of their motivation, which lies in other aspects of their work".
Teachers who thought the principle of relating pay to performance was a good one were still a minority, but double the proportion in 2000, when only 22 per cent agreed. The number who suspected their managers would just reward their favourites had fallen from more than half to a fifth.
Heads were more likely to say that performance management had made teachers think more systematically about work priorities and made them more aware of their school's objectives. Teachers seemed to share this view as more said they were aware of their school's improvement plan and most felt targets were clearer.
The evidence suggested as many as a third of schools were using performance management as a tool for reform. Schools which had improved their target-setting had also seen better academic results.
The findings come as heads face a busy term re-arranging reponsibility payments for all their staff before a new system becomes compulsory in January.