Edward Glaeser remains a fan of merit pay for teachers but it's easier to defend in theory than practice:
The problem is that any top-down push for incentives is easily subverted at the local level. A paper by Jay Greene and Stuart Buck provides a bevy of examples where schools said they had adopted merit pay, but in reality did anything but.
Professors Buck and Greene write of one instance in Arizona: “Algebra teachers were being rewarded merely for getting students to learn 10 percent more about algebra than they knew before studying that subject at all. This is not a high hurdle to clear.” As a result, they write, “even when a state creates a statewide merit pay program and legally bars spending the money on anything else, local school districts may still end up spending the funding on regular salaries unconnected to merit pay or on so-called merit pay programs with absurdly low standards for what constitutes merit.’ ”