In several states and hundreds of local school districts, traditional teacher salary structures based on years of service are being replaced by merit and pay-for-performance models.

The success of the Dallas Independent School District’s ACE (Accelerating Campus Excellence) program, implemented in 2016 and credited with improvements in math and reading scores, prompted many districts and state education departments to revise teacher pay due to stagnant or declining academic achievement and high teacher turnover, according to state officials.

The Houston Independent School District, which the state took over due to poor student performance, will begin rating and paying teachers based on their effectiveness, not years of service, in the 2026-2027 academic year, district officials told The Epoch Times. It will be the largest school district in the nation to do this.

Houston teacher salaries will range from $64,000 to $101,000, and those with unsatisfactory ratings can be fired. The annual evaluation process also authorizes the district to reduce pay if a teacher’s performance diminishes from year to year, according to guidelines released last year.

The purpose of this change is aimed not only at improving student outcomes but also at recruiting and retaining good teachers, leveraging state grants, and driving equity across campuses, according to the guidelines.

“It’s a very strong strategy,” Heather Peske, president of the National Council on Teacher Quality, told The Epoch Times, adding that her research determined that bonuses above $5,000 are usually effective.

Texas-Sized Idea Catches On

The Dallas school district’s teacher and principal evaluation and compensation system is based on student achievement metrics, such as test scores, as well as student survey responses.

A 2025 analysis of the program by the Hoover Institution at Stanford University noted that, in addition to improved academic performance compared to other large urban school districts in Texas, teacher turnover decreased and was concentrated mainly among those who received low ratings.

“While such sweeping changes may appear blunt from a distance, a close look at the Dallas reforms shows they were carefully planned to guard against evaluation inflation, the arbitrary treatment of teachers, and strategic responses such as teaching to the test,” the report said.

The Lone Star State followed Dallas’s lead and created the Teacher Incentive Allotment program in 2019. So far, 809 school districts have participated in the program to pay high-performing teachers bonuses, and an additional 190 have submitted letters of intent to sign on in 2026, the Texas Education Agency said in an emailed response to The Epoch Times. Higher amounts are provided to those working in low-income and rural schools, and additional education reform measures passed by the legislature last year provide billions of dollars more for teacher salaries, with bonuses of up to $36,000 annually.

Arkansas launched its Merit Teacher Incentive program ahead of the 2024-2025 academic year. Teachers are eligible for up to $10,000 in annual bonuses, according to the state’s Division of Elementary and Secondary Education website.

Utah’s five-year pilot program, Excellence in Education and Leadership Supplement, launched last year. Participating districts provide $2,000 performance bonuses to teachers rated in the top 11 percent to 25 percent, $5,000 to those in the top 6 percent to 10 percent, and $10,000 to the top 5 percent, according to the legislation.

Tennessee lawmakers passed bipartisan legislation last year that allows school districts to differentiate annual teacher salaries by merit and value for certain specialties, such as chemistry or special education. Adam Lowe, the Republican state senator who sponsored the bill, said the goal is to reward and retain excellent teachers who would otherwise move to neighboring states.

“We crafted the plan intentionally to be flexible at the local level,” Lowe told The Epoch Times. “But it’ll require some bravery from school boards.”

Washington, D.C., public schools initiated a teacher evaluation process in 2009 and more recently introduced a bonus structure. Under that IMPACT program, evaluations are based on student achievement, observations of instruction, student survey responses, and teacher contributions to schools beyond their core duties.

Highly rated teachers in the nation’s capital can earn up to $25,000 in annual bonuses and $3.7 million over the course of their careers, according to the D.C. district website, which notes that through this initiative, the district has retained 93 percent of highly effective teachers and incentivizes the best to teach in high-poverty schools.

State legislators considered but declined to pass similar teacher pay-for-performance measures in Connecticut, Florida, Indiana, South Dakota, and Oregon, according to the National Council of State Legislatures.

Collective Bargaining Complications

In a typical school district that has a contract with a teachers’ union, a new teacher must perform well enough to pass a probationary period, but beyond that—if they adhere to their district’s minimum work expectations and behavior requirements—their job doesn’t hinge on student achievement, said Maxford Nelsen, research and government affairs director of the Freedom Foundation, a conservative policy center that also helps teachers and other workers opt out of union membership.

“A merit-based system where you can measure performance is the way most of the world operates,” Nelsen told The Epoch Times. “But it’s so unusual in public education that everyone views it as a crazy phenomenon.”

Texas and other states that don’t require collective bargaining agreements with public school teachers have an easier time implementing merit-based pay, Nelsen said. South Carolina prohibits collective bargaining in taxpayer-funded entities. Public sector collective bargaining requirements are more common in blue states, including California and New York, but Ohio is an exception.

Colorado, by contrast, doesn’t have a state law but allows school districts to decide on collective bargaining mandates, Nelsen said, adding that teachers’ unions still exist in states without the mandate, acting as advocacy groups instead of labor organizers.

He said union contract salary schedules are typically centered on preserving equity and rewarding seniority.

“The union interest is in the maximum number of employees and pay, and minimizing accountability on the job,” he said. “They consistently oppose any kind of pay-for-performance or merit systems. Ordinarily, a union is going to object to any unilateral change, even a positive one.”

Union Stance on Merit Pay

The American Federation of Teachers did not reply to a request for comment, but its website lists dozens of resolutions opposing merit-based pay dating back decades.

“Most public employees have insufficient control over their work and output to hold them responsible for less than superior performance when, in reality, they are working with systemic factors that are beyond their control,” a 2000 resolution reads.

The National Education Association’s (NEA) 2025 handbook states that “any system of compensation based on an evaluation of an education employee’s performance” is inappropriate.

The NEA’s most current nationwide salary listing notes that average teacher pay ranges from $55,086 a year in Mississippi to $103,379 in California.

Prioritizing Performance Over Credentials

The National Council on Teacher Quality found that 90 percent of large U.S. K–12 districts pay teachers more for having a master’s degree, and nearly one-third of the states mandate that credential for a permanent position even though there’s no proof of its effectiveness in classrooms.

American education would be better served by dropping master’s requirements or incentives and spending that money to retain good teachers, Peske said.

“Too many states and districts rely on a salary structure that rewards seniority and degrees instead of effectiveness and outcomes for kids,” she said.