After a brief period of inactivity, more states and districts appear open to the idea of giving teachers additional pay for taking on certain kinds of roles or accelerating student achievement—with experiments and full-fledged programs under way in Arkansas, Louisiana, Texas, and Utah, among others.
The idea of “performance” or “merit pay”—setting teachers’ compensation in part on their students’ achievement—has a long and contentious history. Advocates have long claimed it rewards the most effective teachers and encourages them to stay in the classroom, while critics argue models often use narrow, ill-fitting test measures for teacher quality and competitive bonuses discourage teachers from collaborating.
A wave of state and district experiments—driven in the 2010s by federal grants focused on “value added” measures of teachers’ effects on student growth on standardized test scores—showed mixed results. Performance-pay models fell somewhat out of fashion in the years since, as policymakers focused more attention on recruiting and retaining teachers amid nationwide shortages, and teacher strikes led to more emphasis on base pay.
But years of worsening academic malaise are now prompting policymakers to experiment with new ways to link teacher pay to student growth.
“In the last five years, [performance pay] has been somewhat overlooked as a strategy,” said Heather Peske, president of the National Council on Teacher Quality. “But I think we’ve seen in districts … and in Arkansas’s work and in Texas’ work, they’re really trying to combine these efforts to improve teacher effectiveness, to reward teachers, and to give them meaningful feedback using the educator-evaluation system. And when those things are all put in place together … we are seeing student outcomes increase.”
The most ambitious experiments go beyond test scores
The newest and most ambitious of these experiments go beyond gauging performance based primarily on test scores to consider a teacher’s classroom practice, peer collaboration, and willingness to tackle high-need subjects, students, and communities. Many of them are still too new and unstudied to have generated conclusive results.
Utah, for example, has launched a five-year pilot in which teachers are evaluated based on a combination of student achievement growth on test scores, professional evaluations, parent and student surveys, and in some districts measures of teacher-team collaboration.
Beginning in the 2026-27 school year, top-performing teachers will receive bonuses each year from 2026 to 2029. The top 5% of eligible teachers in participating districts will receive a $10,000 bonus per year; the top 6-10% of teachers receive $5,000 per year; and the top 11-25% of teachers receive $2,000 per year. Teachers in high-poverty schools have these bonuses doubled.
“We believe that teaching is not a performative act, but one that is to produce a result: student learning,” said David Forbush, associate director of Utah State University’s Center for the School of the Future, which helped develop the pay program in partnership with the state. “Our data that suggests that most teachers, if they’re in a high-poverty school and get tenure, tend to move out of their schools into low-poverty schools where the work is easier. Our idea is to try to incentivize teachers: ‘If you’re exceptional, stay in your schools.’”
Utah has attempted a statewide merit pay program before. Its career ladders program, which ran from 1983-2012, required districts to implement an extended school year to incorporate teacher professional development days, additional opportunities for teachers to work to earn more money, as well as merit awards. Most districts didn’t implement merit pay; teachers and principals had complained the bonuses set teachers in competition with each other and made them less likely to collaborate
Most states are encouraging districts to use performance pay
Half of states and the District of Columbia now encourage—if not explicitly require—districts to use teacher performance when structuring pay systems.
Arkansas’s LEARNS Merit Teacher Incentive Fund, created in 2023, initially bumped the state’s minimum starting salary up to $50,000, with a minimum $2,000 raise for all teachers. Going forward, it provides no automatic salary increases, but instead allocates bonuses of up to $10,000 per year for classroom teachers, library or media specialists and counselors.
The size of individual bonuses vary based on whether the teacher shows high student growth over several years, mentors other teachers, and/or teaches in subjects, areas, or student groups with critical teaching shortages. In the 2024-2025 school year, more than 4,200 educators earned non-performance bonuses, with an average award of more than $3,300. (The first performance-based bonuses haven’t rolled out yet.)
Gema Zamarro, an education reform and economics professor at the University of Arkansas, has been tracking the implementation of the Arkansas pay overhaul as part of an ongoing evaluation of the program. Early research from Zamarro and her colleagues has found the pay restructuring has helped rural districts be more competitive with larger nearby districts in recruiting and retaining new teachers, and has reduced the number of teachers leaving the classroom for other fields.
“It’s still very early results, but they seem pretty robust,” she said. “In Arkansas, salary increases have been relatively small year after year, so the only way teachers had to make a meaningful increase in their pay was leaving the classroom and taking one of these outside roles in education, like becoming a principal, assistant principal or … teacher coach. Now the difference [between teaching and other roles] is lower, so it does seem that it is reducing turnover from transitions out of the classroom.”
Texas’s statewide Teacher Incentive Allotment, launched in 2019 and expanded this year, provides funds to districts to provide merit pay to teachers based on three levels of designations. Master teachers, considered the top 5% based on student growth and class observations, can earn $12,000 to$32,000. Teachers in the next 20% of performance are considered “exemplary” and earn $6,000 to $18,000. Recognized teachers, who either earn National Board certification or perform in the top third of performance, can earn $3,000 to$9,000 per year.
The number of Texas teachers who have received performance-based bonuses has shot up from fewer than 3,000 five years ago across the three performance levels to roughly 25,000 teachers in 2025.
While there is no statewide evidence yet how the program has affected student performance or teacher turnover, some individual districts have credited it with progress in both. Late last month, the Senate Health, Education, Labor, and Pensions committee highlighted the Ector County school district, which has seen significant improvements in both teacher turnover and student achievement from restructuring its teacher pay using the state allotment.
“The single most important in-school factor that influences student achievement is the teacher,” Superintendent Scott Muri told the committee. “We often seek the ‘silver bullet’ and fail to invest deeply in the most important element in the education equation.”
However, the program as a whole has not helped in expanding the overall attractiveness of teaching in Texas, which has the highest share of uncertified teachers in the country, according to Toni Templeton, who tracks Texas teacher workforce issues for the University of Houston and is studying the allotment program both statewide and in the Houston school district.
“What we’re fighting is that you can go to school, get a bachelor’s degree, and of all the options of jobs you have available to you, teacher pay is quite low comparatively,” Templeton said. “This focuses on the top teachers, not a raise of teachers’ base pay, so we don’t have enough dollars in the public education system to provide a competitive wage to get interest back into the field and get people back into [teaching] routes.”
Incentivizing teachers to stay in classrooms
Teacher salaries nationwide have risen 27% from 2015-16 to 2024-25—but after adjusting for inflation, pay has declined by more than 5%, according to federal education data.
That’s spurred more states and districts to incorporate bonuses for hard-to-staff subjects, student groups, and geographic areas. In one recent study, NCTQ found the share of large urban districts paying more for teachers in hard-to-staff positions more than doubled, from 22% to 45%, from 2017 to 2024. Few of these shortage-based bonuses require teachers to demonstrate student academic growth, suggesting that most states are keeping performance-based and shortage-based bonuses separate.
“We’ve really encouraged this idea of teachers being incentivized to be in classrooms,” said Jenna Chiasson, Louisiana’s deputy superintendent of teaching and learning, who credited the state’s new teacher-pay system with improving morale and retention in the state. All teachers got a $2,000 stipend and support staff a $1,000 stipend for the 2025-26 school year. ((A proposed constitutional amendment to make the stipend permanent failed in a state referendum in March, though it is expected to be put on the ballot again next year.)
Louisiana provides funding for local districts to award bonuses for hard-to-staff teaching positions, but also allows some districts to include merit-pay measures.
“Differentiated compensation, when done well and when done right, can really make a large difference, especially when we think overall of our challenges in filling certain teaching positions,” Chiasson said.