Talk on Nevada: It's time to grade the teachers
Check out Patrick's recent commentary for more on Value Added Assessment and how it's used to grade teachers fairly.
Merit pay based on Value Added Assessment would be superior to the system we have now, which rewards longevity and advanced degrees, not teaching ability.
Eric Hanushek, of Stanford University, and Steven Rivkin, writing in the 2006 edition of the Handbook on the Economics of Education, cite the "most ... remarkable ... finding" from numerous studies "that a master's degree has no systematic relationship to teacher quality as measured by student outcomes" (page 11 of the article, "Teacher Quality"). Advanced degrees are not likely to increase the quality of the teaching and, more importantly, there is no evidence that they increase student achievement.
Teachers in Clark County also received an additional $1,465 for each additional year worked. But teacher quality does not improve after the first few years.