Contracts that base the compensation and job security of teachers on seniority may promote the goals of public education more effectively than performance-based contracts. Public school teaching is a very complex process requiring constant adaptation to changing students, situations, methods, and dynamics. Measurement of teacher performance under such conditions requires either constant, careful, and costly supervision or the use of student performance measures that cannot account for the full range of influences affecting teaching. Teachers are unlikely to be willing to stake their income and employment on proven effectiveness in such unpredictable situations. Adequately applied seniority rules, on the other hand, allow for the continuous development of good teaching practices over time without discouraging effort. The financial disadvantages and staffing problems accompanying application of seniority rules during recent periods of declining enrollment can be explained as the result of insufficient preparation on the part of both school district officials and teachers' union leaders conducting negotiations under unexpected pressures. (PGD)