IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/126546.html
   My bibliography  Save this paper

Appraisal process, merit pay and performance: evidence from a longitudinal survey of school teachers in England and Wales

Author

Listed:
  • Marsden, David
  • Sezer, Lisa A.

Abstract

This study investigates how the quality of performance appraisals influences perceptions of merit pay − whether it is viewed as motivating or divisive − and its impact on achieving performance objectives. Using longitudinal survey data collected from classroom teachers in England and Wales between 2014 and 2018, and employing an instrumental variable approach, the analysis reveals that the effectiveness of merit pay in improving employee performance is closely tied to the quality of appraisal processes. Procedural fairness emerges as a key factor in fostering both motivational and divisiveness attitudes, whereas poorly designed or disengaging appraisals tend to amplify divisiveness rather than motivation, undermining the achievement of performance objectives. These findings highlight the need to carefully weigh both the potential benefits and drawbacks of merit pay systems.

Suggested Citation

  • Marsden, David & Sezer, Lisa A., 2024. "Appraisal process, merit pay and performance: evidence from a longitudinal survey of school teachers in England and Wales," LSE Research Online Documents on Economics 126546, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:126546
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/126546/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Della Torre, Edoardo, 2019. "Collective voice mechanisms, HRM practices and organizational performance in Italian manufacturing firms," European Management Journal, Elsevier, vol. 37(3), pages 398-410.
    2. Sue Fernie & David Metcalf, 1999. "It’s Not What You Pay it’s the Way that You Pay it and that’s What Gets Results: Jockeys’ Pay and Performance," LABOUR, CEIS, vol. 13(2), pages 385-411, June.
    3. Angelo S. DeNisi & Robert D. Pritchard, 2006. "Performance Appraisal, Performance Management and Improving Individual Performance: A Motivational Framework," Management and Organization Review, The International Association for Chinese Management Research, vol. 2(2), pages 253-277, July.
    4. Thomas Dohmen & Armin Falk, 2011. "Performance Pay and Multidimensional Sorting: Productivity, Preferences, and Gender," American Economic Review, American Economic Association, vol. 101(2), pages 556-590, April.
    5. George Baker & Robert Gibbons & Kevin J. Murphy, 1994. "Subjective Performance Measures in Optimal Incentive Contracts," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 1125-1156.
    6. DeNisi, Angelo S. & Pritchard, Robert D., 2006. "Performance Appraisal, Performance Management and Improving Individual Performance: A Motivational Framework," Management and Organization Review, Cambridge University Press, vol. 2(2), pages 253-277, July.
    7. Nick Adnett, 2003. "Commentary. Reforming teachers' pay: incentive payments, collegiate ethos and UK policy," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 27(1), pages 145-157, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bayo-Moriones, Alberto & Galdon-Sanchez, Jose Enrique & Martinez-de-Morentin, Sara, 2016. "Competitive Strategy, Performance Appraisal and Firm Results," IZA Discussion Papers 10041, Institute of Labor Economics (IZA).
    2. Decramer, Adelien & Audenaert, Mieke & Van Waeyenberg, Thomas & Claeys, Tine & Claes, Claudia & Vandevelde, Stijn & van Loon, Jos & Crucke, Saskia, 2015. "Does performance management affect nurses’ well-being?," Evaluation and Program Planning, Elsevier, vol. 49(C), pages 98-105.
    3. Houldsworth, Elizabeth & Marra, Marianna & Brewster, Chris & Brookes, Michael & Wood, Geoffrey, 2021. "Performance appraisal and MNEs: The impact of different capitalist archetypes," International Business Review, Elsevier, vol. 30(5).
    4. Hada Izabela Diana & Burja Vasile, 2018. "Interference Between Profit And Cash-Flow In Evaluating Economic Performance," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 96-101, June.
    5. Emanuele Gabriel Margherita & Ilenia Bua, 2021. "The Role of Human Resource Practices for the Development of Operator 4.0 in Industry 4.0 Organisations: A Literature Review and a Research Agenda," Businesses, MDPI, vol. 1(1), pages 1-16, April.
    6. Charness, Gary & Kuhn, Peter, 2011. "Lab Labor: What Can Labor Economists Learn from the Lab?," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 3, pages 229-330, Elsevier.
    7. Alberto Bayo-Moriones & Jose E. Galdon-Sanchez & Sara Martinez-de-Morentin, 2017. "Performance Measurement and Incentive Intensity," Journal of Labor Research, Springer, vol. 38(4), pages 496-546, December.
    8. Rajesh Kumar Upadhyay & Khaliqur Rehman Ansari & Pankaj Bijalwan, 2020. "Performance Appraisal and Team Effectiveness: A Moderated Mediation Model of Employee Retention and Employee Satisfaction," Vision, , vol. 24(4), pages 395-405, December.
    9. Rawan Alafeshat & Cem Tanova, 2019. "Servant Leadership Style and High-Performance Work System Practices: Pathway to a Sustainable Jordanian Airline Industry," Sustainability, MDPI, vol. 11(22), pages 1-21, November.
    10. Donghun Yoon, 2021. "How Can Personnel Performance Evaluation Systems Be Improved?," SAGE Open, , vol. 11(1), pages 21582440209, January.
    11. Christian Zehnder & Holger Herz & Jean-Philippe Bonardi, 2016. "A Productive Clash of Cultures: Injecting Economics into Leadership Research," CESifo Working Paper Series 6175, CESifo.
    12. Brice Corgnet & Roberto Hernán-González, 2019. "Revisiting the Trade-off Between Risk and Incentives: The Shocking Effect of Random Shocks?," Management Science, INFORMS, vol. 65(3), pages 1096-1114, March.
    13. Flora F. T. Chiang & Thomas A. Birtch, 2010. "Appraising Performance across Borders: An Empirical Examination of the Purposes and Practices of Performance Appraisal in a Multi‐Country Context," Journal of Management Studies, Wiley Blackwell, vol. 47(7), pages 1365-1393, November.
    14. Anupriya Singh & Tanuja Agarwala, 2011. "Software Services Industry Context and Performance Management," Vision, , vol. 15(1), pages 49-59, March.
    15. Edward P. Lazear & Paul Oyer, 2012. "Personnel Economics [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    16. Md Murad Miah & Dr Nor Intan Adha Hafit, 2019. "A Proposed Framework Model of the Relationship between Organizational Culture, Work Engagement, and Employee Performance at Airasia Berhad," Business and Economic Research, Macrothink Institute, vol. 9(4), pages 69-78, December.
    17. Rajib Narayan Sahu & Lalatendu Kesari Jena & Subhas Chandra Parida, 2014. "Performance Management System as a Predictor of Organizational Effectiveness: Insights from Indian Manufacturing Industries," Jindal Journal of Business Research, , vol. 3(1-2), pages 137-152, June.
    18. Selvarajan, T.T. & Singh, Barjinder & Solansky, Stephanie, 2018. "Performance appraisal fairness, leader member exchange and motivation to improve performance: A study of US and Mexican employees," Journal of Business Research, Elsevier, vol. 85(C), pages 142-154.
    19. Outila, Virpi & Fey, Carl F., 2022. "“We have performance appraisal every day and every hour”: Transferring performance management to Russia," Journal of International Management, Elsevier, vol. 28(2).
    20. HADA Izabela Diana & MIHALCEA Mihaela Maria, 2020. "The Importance Of Profitability Indicators In Assessing The Financial Performance Of Economic Entities," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 219-228, July.

    More about this item

    Keywords

    merit pay; public sector; teacher pay;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:126546. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.