Performance-based compensation systems have been under discussion for years and are now a required component of any state plan for Race to the Top funds. This article describes a system of performance-based compensation that has been in place at a K-12 school for the past four years. The system was developed by a team of teachers, union members, and administrators based on clear, schoolwide goals. Performance levels are set for teams of teachers who work collaboratively to meet goals. Effects on the professional culture of the school are explored, and suggestions are given for other schools interested in performance-based compensation. (Contains 8 tables and 2 notes.)