High teacher turnover and a pervasive teacher shortage has the education industry investigating new ways to attract and retain talent. Texas, specifically, has invested in compensating teachers for performance in hopes of retaining top teachers in the classroom through the Teacher Incentive Allotment (TIA), which was established and authorized by the 86th Texas Legislature (Texas Education Agency [TEA], 2022c). The intent behind TIA is to recognize and reward teachers for the work already being done and at the same time encourage them to work in schools that need them most (Lee et al., 2021; TEA, 2022c). The purpose of this qualitative phenomenological study was to understand the perceived influence of the TIA on teacher retention through the lived experiences of designated teachers and their principals. Semi-structured interviews were utilized as a hermeneutic phenomenological method that allowed participants to vividly describe their experiences (Peoples, 2021). The interviews were recorded and transcribed for analysis using NVivo 14. Data analysis revealed emergent themes and nodes about teacher and principal retention. The findings about the influence of incentive pay on teacher retention were mixed and inconclusive, but emergent themes revealed other influential factors in teacher retention, namely the following: connectedness, administrative support, competitive compensation, and school culture. Principals in the study also described from their leadership point of view their experiences regarding the implementation of the TIA and the influence it has on principal retention. The results of this study provide district and campus leaders with insight into the experience of designated teachers and their principals and into the perceived impact of the incentivization on retention. The results also reveal how incentive pay can be used in conjunction with the emergent themes for improved retention. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://bibliotheek.ehb.be:2222/en-US/products/dissertations/individuals.shtml.]