Classroom observation of teachers will be limited to three hours each year under new appraisal rules which give heads of departments and other line managers a key role in determining pay rises.

The regulations are intended to strengthen performance management in schools and to ensure teachers and heads are set clear objectives which they must meet in order to move up pay scales.

But critics said schools would struggle to introduce the changes in time for next term and that it would lead to an increase in the number of teachers who believed they have been treated unfairly.

The three-hour limit on observations will apply only to observation for performance management and not to Ofsted inspections, local authority monitoring or to schools’ own self-evaluation.

It was hailed as a “great victory for teachers” by the unions which negotiated the changes as part of their social partnership with the Government.

The unions, the NASUWT, Association of Teachers and Lecturers, Association of School and College Leaders and Professional Association of Teachers have also agreed schools should be able to increase the number of objectives teachers must meet in order to gain pay increases.

Currently, most teachers are set two or three objectives, including those related to pupil performance and professional development but heads argued greater flexibility was needed for senior staff.

These objectives will be set by line managers, typically heads of department in secondary schools, who, from September 2007, will, for the first time, use them to make recommendations about pay progression to the headteacher.

Decisions will be based on data and evidence collected from people with “a direct professional knowledge of a teacher’s work”. Schools will no longer be able to use the views of parents or pupils as part of the appraisal process.

The National Union of Teachers, which with the National Association of Head Teachers was excluded from negotiations, warned that the new arrangements would increase the workload of line managers and headteachers expected to implement the new system.

Steve Sinnott, NUT general secretary, said: “Until now, teachers have had a one-hour meeting a year for performance management. They will now have three hours of classroom observation.”

Mick Brookes, NAHT general secretary, said he was “immensely worried”

schools would not have sufficient time to introduce proper procedures to ensure teachers were treated equally by different line managers.

Nigel Middleton, director of the Head Support pay and conditions consultancy, said the Government risked creating another “TLR-style” fiasco with an increase in the number of disputes.

But he said teachers could also benefit if the system was not implemented properly. “If heads manage to establish proper procedures then it will lead to fewer teachers getting pay awards. If that doesn’t happen, the majority of teachers will continue to be put through automatically.”

But Chris Keates, NASUWT general secretary, said it was “bizarre” to suggest the system would not be implemented properly. “Any school that complains they can’t get a system in place will have to explain to the DfES what they have been doing for the past few years,” she said.

She said the changes made the system fairer.“At the moment you could be in a school where the head decided to take evidence from parents and pupils while in another school the head will choose not to,” she said.

* jon.slater@tes.co.uk