The size of the school roll may no longer be the best guide to salary, argues Yojana Sharma

Talk of private-sector managers being brought in to run schools has caused uproar. But there is another side to the coin. Many headteachers with their experience of running schools believe they have the management skills to run a small company. So should heads be paid on a par with chief executive officers?

“A lot of heads have many skills that could be used outside schools,” says Marcia Twelftree, head of Charters School in Ascot, Berkshire. “I have 260 staff in the school and a pound;7.5 million budget, similar to a small company. We have similar recruitment, personnel and legal issues. Tasks such as strategic planning, allocation of resources are similar, and we do have to deliver measurable outcomes. Our shareholders are parents and pupils. We are responsible to our governors, almost as a chief executive officer might be responsible to a board.

“Young people pursuing a teaching career and hoping to become heads need to know that they need business acumen. It has become very important.”

There is a growing view that the number of pupils on the school’s roll, which is what broadly determines pay, may no longer be the best measure of a head’s worth.

With greater school autonomy than even a decade ago, there are extra responsibilities. Schools have become day care centres, sports centres and adult education centres. Some provide community services and advice for immigrant parents.

One in 10 heads believes the level of reward has not risen in line with their managerial responsibilities, according to the management consultancy PricewaterhouseCoopers (PWC). They monitored focus groups who indicated that heads would like their pay structure to include factors such as challenging circumstances, innovation displayed, involvement with the wider community, and engagement with other agencies. Others said they were effectively “education sector chief executives”.

Many so-called superheads on high salaries are social entrepreneurs finding ways to turn around failing schools, says Trevor Averre Beeson, executive head of the private company Edison Schools in the UK. But, he says, if you break down headteacher roles to compare them with other management jobs, it is not easy to tick the boxes.

“Many roles are qualitative rather than quantitative. In many ways the role of a head is leadership rather than management,” Mr Averre Beeson says. He wonders how the “market worth” of heads’ sense of public purpose can be measured?

Lynn Gee, head of New Deer Primary at Turriff, Aberdeenshire, took an MBA degree in 2002. Her thesis compared headteacher roles with those of five oil company chief executives. She saw many similarities: “Many top management jobs are about managing people to get the best out of them,” she says.

But there are also differences. “Chief executives’ skills are different,” she says. “Heads are not required to do that much strategic thinking. They are jacks of all trades.” Heads, she says, are valued particularly for their people skills and flexibility.

By contrast PWC found chief executives to be more aloof from other employees in their organisation. They are valued more for their skills in keeping their companies ahead in a competitive market.

It may no longer be true that heads’ pay is based only on the size of the school and that their real worth in adding value to a school is being recognised.

“Some people say there is no relationship, but our work has found that headteachers’ pay differs depending on how well or badly a school is doing,” says Stephen Machin, director of the Centre for the Economics of Education at the London School of Economics. When he was researching leadership wages and performance in schools, he found that heads are paid more if GCSE grades are good.

Not everyone is convinced that heads are worth more than a super-teacher. While there is plenty of evidence that leadership makes a huge difference in the private sector, less is known about leadership performance in the public sector that might justify comparable pay.

“The “headteacher effect” has never been quantified,” says Dylan Wiliam, deputy director of London University’s Institute of Education.

He cautions against too great an emphasis on headteachers’ skills. “The differences between schools are much smaller than people think,” he says. “Research has shown that about 93 per cent of GCSE scores are outside the school’s control. This suggests that heads may not be as valuable to schools as say charismatic chief executives might be in business.”

The administrative task of determining heads’ comparable skills and their monetary worth would be hugely expensive and, as PWC noted in a 2006 study: “For most leadership roles it would be unlikely to result in significantly different outcomes to those which result from using pupil numbers.”

Market supply and demand is thought to be a far bigger factor in determining heads’ worth. “What will determine the way heads may be paid in the future may not be to reward headteachers’ skills set but the scarcity value of heads,” says Stephen Szemenrenyi, an expert on pay and conditions for the Association of School and College Leaders.

Many headships are already hard to fill. Unlike teachers of maths and science, there is little evidence of private-sector demand for heads’ management skills, which would push up their market value, and few instances of heads running private-sector companies.

Some heads may have been tempted to jump ship, but whether they would stay afloat in business is another matter. PWC noted that the average private- sector firm can expect major reorganisation every three years.

Private companies have now begun to spot potential senior managers much younger, making it even less likely that they would take on a former head. Younger teachers, having picked up highly transferable people and communication skills, who switch to the private sector are more likely to end up in the boardroom.

“No one has put a value on headteacher skills,” says Jody Goldsworthy, head of the education sector team at the Hay Group consultancy. She agrees that calculating payment by skill would be a huge administrative task. “But it is not beyond the realms of possibility,” she said. “It is something the sector will be looking at very closely in the next few years.”

BONUSES AND SHARE OPTIONS V FINAL SALARY PENSIONS

HOW A CHIEF EXECUTIVE OFFICER AND A HEAD COMPARE

Jonathan Golightly

CEO, SmartHome Estate Agencies

Age: 45

Responsible for: Nine offices in the Midlands with 40 professional and support staff

Annual turnover: pound;12 million

Salary: pound;100k

Performance-related: Sales bonuses in excess of pound;150k

Other benefits: Company BMW and free golf membership (The Belfry)

Job security: Waiting for the next property crash

Pension plan: Share options and overseas property investments should do the trick

Apt to say: “We’ve had a really good run the last few years, which should tide us over the current slowdown in the market. We don’t envisage any lay-offs at this stage.”

Vanessa Gradely

Headteacher, St Ermine’s Technology College

Age: 51

Responsible for: 1,500 pupils and 280 staff at a West Midlands comprehensive

Annual budget: pound;10 million

Salary: pound;82k

Performance-related: Zero, but salary increase on cards because of rising pupil numbers

Other benefits: Car allowance, plus personal parking spot

Job security: Only as good as your last contextual value-added score

Pension plan: Final salary scheme makes it all worthwhile

Apt to say: “You don’t go into teaching for the money, so you don’t expect huge rewards as a head.”