Ensuring that all students in America's public schools are taught by good teachers is an educational and moral imperative. Teacher incentive proposals are rarely grounded on what high-quality research indicates are the kinds of teacher incentives that lead to school excellence and equity. Few of the current approaches to creating teacher incentives take into account how specific conditions influence whether or not effective teachers will work in high-need schools and will be able to teach effectively in them. Large-scale studies and teacher testimonies suggest that working conditions are far more important than bonuses in persuading teachers to stay or leave their classrooms. National teacher turnover survey data show that teachers who leave because of job dissatisfaction do so for a variety of reasons that can be addressed: low salaries, poor support from school administrators, a lack of student motivation, a lack of teacher influence over decision-making, and student discipline problems. However, current policies, including the one framed by the federally sponsored Teacher Incentive Fund, rarely recognize these realities. We must reward expertise in ways that move beyond recruitment bonuses or pay for improved student test scores. To develop incentive policies that spread teaching expertise and allow for effective teaching will require the careful development of interlocking policies across federal, state, and local agencies. To that end, it is recommended that education policymakers do the following, which are fleshed out in the report: (1) Use the Teacher Incentive Fund to Spread Teaching Expertise for High-Needs Schools; (2) Expand Incentives in Creating Strategic Compensation; (3) Create the Working Conditions that Allow Teachers to Teach Effectively; and (4) Elevate Best Practices and Policies that Spur School Excellence and Equity. (Contains 60 combined notes and references.) [For related report, "Proposed Legislation for Teacher Incentives for School Excellence and Equity," see ED528717.]