A review of the literature indicates that public school districts, especially those in rural areas, are heavily dependent upon a traditional salary schedule. This may have prevented these districts from leveraging incentives to retain high-performing teachers. This study examines the effects of strategic teacher compensation on teacher quality as determined by the Tennessee Value-Added Assessment System (TVAAS). An independent-sample "t" test was used to evaluate the differences in TVAAS single-year individual teacher index results between teachers who voluntarily elected to participate in the district's new strategic compensation plan as compared to teachers who elected to remain compensated by the traditional salary schedule. The study found statistically significant higher TVAAS single-year individual teacher index results of strategic compensation plan participants as compared to nonparticipants who remained compensated by the traditional salary schedule.