Performance appraisal and the compensation of academic staff in the University of Tartu

Purpose – The present study aims to show the role of performance appraisal in the motivating and compensating of academic staff. The goal of the paper is achieved through comparing performance appraisal and compensation policies and systems in the University of Tartu. One of the aims is also to find out the level of satisfaction of the academic staff with the appraisal and compensation systems in two faculties of the University of Tartu. Design/methodology/approach – Research was carried out on the academic staff at the faculty of Economics and Business Administration (hereafter FEBA) and the Faculty of Education (hereafter FE) at Tartu University. It is based on the analysis of quantitative and qualitative research methods. The author carried out document analysis and two original and anonymous questionnaires. In order to achieve this aim, 125 lecturers were questioned, from whom 52 percent returned their filled in questionnaires. In addition to that, qualitative data from five semi‐structured interviews with senior management and lecturers, incorporating individual interviews were analyzed. Findings – Firstly, results showed that the performance appraisal and compensation system (pay‐for‐performance system) has guaranteed a highly motivated core of staff. Secondly, teaching loads and research activities of the academic staff have increased over the years. Faculties need to establish performance appraisal and compensation systems in order to show clearly defined causality between compensation and performance of academic staff. A good and well functioning performance appraisal system would help the educators to make their mark in the organizational setting of their faculty. Research limitations/implications – In addition to suggestions for improvement, limitations of the results will be addressed. The survey was carried out in two faculties at the University of Tartu. Unfortunately, the survey yielded only 65 usable responses, thus it could be claimed that the dataset is too small for making any conclusive generalizations. However, when taking into consideration that the survey was anonymous, the author believes that a 52 per cent response rate can be considered a very good result. Another limitation involves the dynamic nature of appraisal systems. Since, the appraisal procedures are still being developed, the systems described might now be out of date. Originality/value – The present paper is valuable as it is the first one to examine the role of performance appraisal and compensation (pay‐for‐performance) systems in Estonian and Baltic Universities.