Speaking to HR magazine, Kimberley Trewhitt, researcher at Reform, said: "In recent years a focus on the number of staff in schools has taken priority over a focus on quality.
"As part of the drive towards improving the quality of teaching, head teachers should have the freedom to set the right balance between the pay, number and quality of their staff. Discretion over pay is one of the necessary tools that should be at head teachers' disposal to help them deliver better performance."
Christine Blower, general secretary at the National Union of Teachers, said: "Proposals to apparently weaken national pay and conditions fly in the face of evidence.
"Performance-related pay has been a failure. There is no evidence that it improves standards. National pay scales for teachers are transparent and give a far greater guarantee of fairness and non-discrimination than pay levels determined at school level".
The calls come on the back of the publication of Reform’s report Every Teacher Matters, which called for ministers to "focus on improving the 447,000 teachers in England", bring new teachers into the profession and abolish several non-department government bodies.
On Tuesday, the Government announced that it would double the number of National Leaders of Education; a scheme which allocates "outstanding head teachers" to support "struggling schools."
