If a rational system of teacher compensation, aimed at recruiting and retaining high-quality teachers, were designed from scratch, it is unlikely it would bear any resemblance to the system that is currently in place. In this paper, the author takes a deep look into how the method of paying teachers evolved. He shows that compensation systems have unintentionally become dysfunctional. He shows how efficiencies can be gained through rethinking decisions such as how many teachers a district actually needs. [An extensive list of resources is included.]