Effective teachers are the single most important in-school factor affecting student success, yet most public school pay systems fail to recognize or reward instructional quality.
The majority of school districts compensate public school teachers through salary schedules negotiated during collective bargaining. These schedules are based almost entirely on years of service and academic credits earned, with little to no consideration of classroom effectiveness or student outcomes. While this approach is simple and inexpensive to administer, it does little to incentivize excellence or distinguish high-performing teachers from mediocre or even “ineffective” teachers.
Across our region, teacher compensation funding formulas, funding sources, and annual salaries vary widely.
Washington ranks among the highest nationally for adjusted teacher pay. Montana, on the other hand, has historically ranked near the bottom, although recent legislation has improved starting pay. Specifically, the STARS Act raised minimum salaries and implemented a statewide base pay benchmark above $41,000 for 2025. Wyoming has expressed support for performance-based pay, but implementation differs by district, and the state continues to struggle with teacher recruitment and retention.
Under the education and experience-based pay models that these states use, scheduled raises are virtually guaranteed regardless of competency or classroom management. This system rewards longevity rather than impact and discourages innovation, accountability, and continuous improvement.
Idaho is one of 10 states (11 if you count Washington, D.C.) that incorporate performance into teacher pay through its tiered career ladder. Pay increases are linked to performance, requiring educators to meet measurable student achievement targets, along with professional growth benchmarks, to advance between compensation levels.
Policymakers developed the system with good intentions, but it is administratively complex and lacking in statewide consistency. After multiple reviews of the manual, I still found it difficult to understand. Actual teacher salaries vary widely among districts, with some awarding individual bonuses and others distributing award funds equally across the career ladder.
However, research supports Idaho’s approach in using multiple metrics to gauge teacher performance. A 2021 study published in the American Educational Research Journal examined 37 student improvement initiatives and found that programs incorporating pay-for-performance significantly improved student outcomes, particularly standardized test scores.
The Teacher Advancement Program (TAP) model, which debuted in 1999, is a specific performance-based initiative widely used in at least twenty states throughout the U.S. A 2023 study from the National Bureau of Economic Statistics tracked South Carolina 8th grade students of TAP schools beyond age 21 using various government databases.
Researchers found benefits for students that extended beyond immediate gains in standardized test scores. Students from TAP schools were more likely than peers in similar non-performance-pay schools to complete high school, less likely to be arrested on felony charges, and less likely to rely on welfare programs.
This is not to say that paying teachers for performance will fix the education system, but there should be more legislative intent related to strategic compensation reform, including merit pay to address recruitment challenges. Low starting salaries compound the problem by shrinking the applicant pool and discouraging high-quality candidates from entering the profession.
Yes, performance pay triggers the union machine, especially in Washington. Union leaders frequently threaten lawsuits, claiming such models are unfair, undermine collective solidarity, and create hostility among teachers. And critics chime in to argue that merit pay systems are difficult to design, costly to administer, and potentially divisive. But these concerns underscore the importance of thoughtful design rather than abandonment of reform.
Policymakers can design these systems without excessive complexity. For example, Arkansas’ LEARNS Merit Teacher Incentive Fund, created in 2023, initially raised the state’s minimum starting salary to $50,000 and provided 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 varies based on whether a teacher demonstrates high student growth over several years, mentors other teachers, and/or teaches in subjects, regions, or student populations experiencing critical shortages. In the 2024–2025 school year, more than 4,200 educators earned the bonus.
Successful programs are easy to understand and share important characteristics like reliable funding and a commitment to continuous improvement. They receive broad support from teachers, administrators, and the community. Expectations and rewards are transparent, attainable, and clearly aligned with student achievement. Districts must provide teachers with the tools and support necessary for success, and districts follow through with rewards and consequences.
Pay-for-performance models reflect free-market principles and acknowledge excellence. Teachers matter, and paying a premium for effective teaching attracts stronger candidates, retains high performers, and motivates underperforming teachers to improve or exit the profession.
Teacher compensation should move beyond outdated salary schedules and begin rewarding what matters most: results for students.
Meg Goudy is Director of the Bill & Milly Kay Baldwin Center for Education at the Mountain States Policy Center, an independent research organization based in Idaho, Montana, Eastern Washington and Wyoming. Online at mountainstatespolicy.org.
