Theory suggests that strategic compensation can not only serve as a powerful motivational incentive to increase worker performance, but also improve the composition of the workforce through the attraction and retention of high performers and discouragement of lesser performers from entering or staying in the profession. This study tests the…

Pay-for-performance is a popular public education reform, but there is little evidence about the characteristics of a well-designed incentive pay plan for teachers. Some of the literature suggests that effective incentive plans must offer relatively large awards to induce behavioral changes. On the other hand, the experimental economics literature…