A chapter in the forthcoming Handbook of the Economics of Education, "The Design of Performance Pay in Education", by Derek Neal, includes this extract motivated in part by the Portuguese reforms:
In private firms, the person who evaluates a worker’s performance is either an owner of the firm or an agent of the owner. In public education, subjective performance evaluation is more problematic because many principals and administrators work under employment and salary rules that create only weak links between the quality of their personnel decisions and their own compensation. Thus, some may not be surprised that performance pay systems that involve one group of public employees making subjective determinations about the bonus payments given to another group of public employees did not generate noteworthy gains in student achievement.
More details here.