The proposal to set up a separate performance-related pay scheme for heads and deputies has been dropped by the School Teachers' Review Body.
Instead it has put forward a set of performance indicators for governors to help them during their annual review of heads and deputies' pay, rather than provide them with specific bonuses as had been proposed.
These indicators are: a year-on-year improvement in a school's examinations or test results; year-on-year improvement in pupil attendance; evidence of sound financial management; and - if there has been a recent Office for Standards in Education inspection - progress in meeting the requirements of the resulting action plan.
The review body is under pressure from the Department for Education to introduce performance-related pay for all teachers. So far it has resisted, saying that the Government must provide new money. It also notes the hostility towards such schemes from the profession on the grounds that they go against the culture and ethos of schools.
A call by the national employers to limit the number of points a head can be awarded per year - because in some cases heads have been awarded up to 10 - was not taken up by the review body.
The review body believes there is enough flexibility in the present pay arrangements for classroom teachers to be rewarded for good performance. But it notes that there is a reluctance in principle to award excellence points for classroom teachers. In some cases teachers were awarded extra points for new responsibilities when an excellence point might have been more appropriate.
The report discusses a proposal by the DFE that Grants for Educational Support and Training money could be used for excellence payments. However, the grants, which are decided on a year by year basis, are not thought to be the best mechanism by the review body.
In last year's report, the review body was highly critical of the standard of management in many schools. This year, it said: "Improving the effectiveness of school management remains one of our fundamental concerns. The scope for improvement is illustrated by the assessment made by the chief inspector that the proportion of teaching which is less than satisfactory ranges from about 30 per cent for pupils aged 7 to 11 to about 15 per cent for post-16 students. "
The report says that benchmarking - where organisations can compare their performance levels both internally and externally with those of others - is a useful tool in improving management practice.