On Monday the government announced that it will abandon its guidance to schools on performance-related pay, ending a decade-long experiment.

In September 2014 the coalition government attempted to dramatically change the way schools in England decide on pay rises for their teachers.

No longer were they allowed to give all teachers a bump each year. Instead, they had to devise a policy that objectively assessed teachers’ performance and connect it to pay rises.

Teaching unions were strongly opposed, and the government forced the change through in the face of resistance. Now the experiment is ending, and the government has to figure out what will replace it.

Lessons from performance-related pay

So what can we learn from the past decade’s experience? And what are the options for replacing performance-related pay?

The goal of the policy was threefold: to motivate teachers, to retain great teachers in the profession by rewarding their efforts, and to attract people who think they might do well as a teacher.

It is commonly claimed that most schools simply stuck to their previous pay schemes, but that is not borne out by the data.

A large study conducted by UCL tested the impact of the change and found that 90 per cent of schools did deviate from their previous seniority pay arrangements and start to vary teachers’ pay rises. However, researchers were unable to find any evidence that the policy improved overall teacher retention.

Internationally, the effects of performance-related pay for teachers have been found to be mixed: some studies have identified large improvements in pupils’ performance as better teachers have been attracted to schools and motivated to achieve results.

Other studies, like UCL’s, have found no impact at all. These differences suggest that it is essential for pay policies to be designed with the specific circumstances of schools in mind.

What works for a thriving primary school in Newcastle might not be right for an overwhelmed special school in south London. In some schools strong pay incentives may help to retain brilliant teachers who are considering a career change; in others, they may cause damaging friction among staff.

The government taskforce that recommended the removal of performance-related pay was particularly concerned about the administrative burden on schools caused by the policy requirements.

The workload impact

When the government decides what to replace performance-related pay with, avoiding further bureaucracy will be uppermost in its mind, and rightly so.

For years teachers and leaders have complained that it is the tedious administrative tasks that they find so bothersome, not necessarily the long hours in the classroom.

However, the government should also heed the evergreen words of its advisory pay review body that pay must be “tailored to the needs of individual schools such that they are able to deploy pay provisions as flexibly as possible to address recruitment and retention problems”.

Removing the burdensome policy requirements is an opportunity to allow schools a broader freedom to design policies that truly work for their circumstances, unencumbered by central bureaucracy.

For example, EPI research has found that only one in five physics teachers outside London is a specialist in the subject, and the average physics graduate earns 20 per cent less in teaching than their non-teaching peers.

Schools outside London may want to pay more to attract qualified physics teachers. London schools that find it easy to recruit young teachers and hard to retain experienced teachers may wish to reward their most skilled and experienced professionals.

England has nearly 25,000 schools, all of which have their own strengths, challenges and culture. The diversity of the system makes any centrally decided pay policy an awkward fit for many schools, and so this is a chance to give each school the freedom to shape a pay policy that meets its needs.

The instinct to remove bureaucratic burdens from stressed school leaders is the right one, and they are the right people to decide how to reward their staff.

James Zuccollo is director for school workforce at the Education Policy Institute