Research Question, Topic and Objective:

How do school principals implement an individualised pay system for teachers? New Public Management approaches have been discussed extensively in several European Countries as a new way to lift school quality in decentralised school systems (Schedler & Proeller, 2009; Dubs, 1996). One prominent principle in this regard is linking the results of teachers’ work to consequences. Since 1995, Sweden has introduced an individualised pay system for teachers (Strath, 2004). The goal of this study was too gain empirical insight in emerging patterns of how school principals make use of this instrument. This is of particular relevance to urban education, as the competition among schools is accentuated in European metropolises like Stockholm. Therefore, the role of school leadership in the implementation of such an instrument becomes vital for the attraction and retention of qualified and motivated teachers who have various job alternatives in larger cities.

Conceptual and Theoretical Framework:

One theoretical orientation in this study refers to Agency Theory, which describes how a leader (principal) makes use of incentive and information systems with regard to his employees in order to achieve his/ her goals (Eisenhardt, 1989). However, as this theory falls short of grasping the nature of educational organizations, this theoretical framework must be modified and tentatively extended referring to the concept of loosely-coupled-systems in education (Weick, 1976). In addition, the implicit role of a transactional leader in Agency Theory must be extended with concepts such as transformational leadership (Leithwood & Jantzi, 2000) as well as the principal’s role as “primus inter pares”.

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