With major American cities such as New York and Chicago toying with the idea of installing (and in some cases reinstalling) merit based payment for teachers, the many “failures” of merit pay experiemnts will no doubt be brought to the forefront of the debate once again.
Proponents of merit pay trumpet the importance of incentives, rewarding success, and reinforcing the role of the individual teacher. As a common response, opponents generally contend that a merit system puts a teacher’s salary at the whim of forces beyond the teacher’s control, namely the laziness or unwillingness to learn on the part of the student. Pointing to past experiences, opponents of merit pay have flatly declared that “it doesn’t raise test scores.” 
In an endlessly cited report by Harvard economist Roland Fryer, New York City’s $75 million teacher pay initiative did not increase student test scores and in some schools had the opposite effect. Highlighting similar results in Nashville and Atlanta, opponents of merit pay have “pretty damning evidence…that merit pay…fails to raise student performance.”
Unfortunately, both sides of the argument are missing a crucial point. While merit pay systems may not provide enough incentive for good teachers in the short run, the system provides an avenue for the discovery and removal of incompetent teachers in the long run. While many declare that paying teachers based on performance doesn’t reflect the true value of a teacher, we should consider the relevant factors upon which teacher pay now hinges, namely seniority or how many credits one took in a specific subject area in college.
The Fryer report and similar studies have only created considerable confusion on the topic by not examining more closely the merit pay regimes instituted in New York and elsewhere. In many cases, the merit pay systems were instituted in extremely small samples for a relatively short period of time, with schools and teachers not fully understanding the dynamics of the system. Additionally, problems arose with the distribution of incentives: in New York, individual teachers were never rewarded for improvements. Instead, all bonuses were divided equally among all educators at a given school, essentially quashing any incentive in the first place. 
Like any other idea, results are only as good as the system that implements the idea. Merit pay “failed” in New York because at the end of the day poor performances by incompetent teachers were averaged out by good performance. The system was officially ended in 2009, just as Mayor Bloomberg was courting the support of teachers unions before his bid for a third term. Although a merit pay system may or may not increase the performance of good teachers, merit pay should not be viewed as an academic panacea to our nation’s education woes. Instead, merit pay should be presented as step forward from the current system because it addresses teacher quality in the long run.