Implementation of the performance‐related pay in the general educational schools of Estonia : Perspectives and possibilities

Purpose – The article aims to provide an insight into the perspectives and possibilities of implementing the performance‐related pay in the Estonian general educational schools. It also aims to test two propositions regarding factors that influence school performance and teachers' and school managers' opinions about performance management. Design/methodology/approach – A total of 298 school managers and 2,165 teachers from general educational schools in Estonia participated in the study. The factor, regression and correlation analysis, independent samples t ‐test and one‐way ANOVA analysis were used to study claims related to school management and performance and educational processes. Findings – The results of the analysis show that besides teachers' activities and effectiveness factors, various school management factors play an important role in the shaping of the school performance and the opinions towards the implementation of performance appraisal and performance‐related pay. Research limitations and implications – The main limitation to the research is that it is difficult to measure the schools' outcome. Second, the study was mainly quantitative, with only a few open questions and thus, the respondents were neither able to give full answers nor provide explanations. Therefore, further case studies are needed to obtain a more precise overview. Originality/value – Although performance‐related pay is seen as an important management tool for increasing schools' outcome, there is no clear overview as to how the school managers and teachers in Estonia look at the issue and which factors should be considered in implementing performance‐related pay.