Will it divide or motivate?
"TREAD carefully" is the advice from employment analysts as the Government introduces performance-related pay. The experience elsewhere in the public sector is not heartening.
Dr David Marsden, reader in industrial relations at the London School of Economics, found civil servants, nurses and head teachers considered PRP divisive and demoralising in a study published earlier this year.
Heads, who have had merit pay for four years, felt particularly strongly that it weakened team spirit and credited a few for the achievements of the whole school.
"In hospitals and the civil service, a lot of line managers felt it had raised productivity, but staff felt it had demotivated them," he said this week. "I don't think teachers would be very different."
Appraisal systems were undermined when pay became linked. Staff were less likely to be honest about problems and more likely to exaggerate successes.
"Many staff believed their line managers engaged in favouritism and that higher management would manipulate the scheme if there was a chance of saving money," Dr Marsden said.
The Confederation of British Industry is sensitive to those dangers but views PRP as a way of improving communication between staff and managers and of reinforcing goals. Two-thirds of companies now have some form of variable pay.
Senior policy advisor Nick Page said: "It has to be achievable - there's no point setting unrealistic targets and raising people's expectations. In some companies the money hasn't always been forthcoming and that's demotivating.
"The aims have to be clear. It may have to come with a lot of training - it's unfair to expect people to deliver the goods without it."
The need for realistic and achievably targets was underlined by Alan Smithers, of the Centre for Education and Employment Research at Liverpool University.
"What worries me is that the Green Paper seems to be full of short packages. They're trying to make a small amount of money go a long way and it amounts to tinkering," he said.
HOW PREVIOUS BIDS HAVE COME UNSTUCK
This Government is not the first to flirt with performance-related pay for teachers.
In the early 1990s the Conservative government asked the review body to introduce PRP for teachers. The review body was not keen. Instead it put forward a school-based model, where the whole school would be rewarded for meeting targets. The Government said it wanted PRP for individual teachers.
The review body then restructured the classroom teachers' payscale and included excellence points for high-performing staff, to be awarded by the governing body. In practice very few have been used to boost pay-because governing bodies have been opposed to them, or because they say there is not enough in the school budget to award them.
In the mid-1990s a number of schools took part in a pilot scheme, and a handful of others pushed to have their own schemes. A provision was made in the teachers' pay document.
The review body continued to resist Government pressure to introduce PRP by limiting its introduction to heads and deputies. Now management staff have to measure up to agreed performance criteria, for example exam results and financial management, before progressing up the scale. In practice, many governing bodies have not used the procedure.