Like so many aspects of education policy in England over the past 20 years, performance-related pay has been an area of high-profile, frequently changing development. But has it been effective in improving what goes on in classrooms? Unsurprisingly, opinions tend to diverge on this subject, which seems to be debated around the world. But one thing appears clear: The Labour government, elected for the first time 13 years ago, has expended considerable political energy on this topic. In one sense, performance pay has a very long history in England. In 1862, a system of payment-by-results was introduced so that the government would reward elementary schools according to their pupils' performance in reading, writing, and arithmetic tests. This was abandoned in 1897 amid concerns about the narrowness of the that resulted. The experience then appears to have cast a shadow over any possibility of performance pay for most of the 20th century. However, this began to change in the 1990s. Almost as soon as they came to power in 1997, Labour ministers were keen to put forward the idea of merit pay. Then-Education Secretary David Blunkett told the House of Commons that merit pay would be part of a set of radical, modernizing reforms that would create a professionalism among teachers. The aim was clear. The government was unhappy with a system in which most teachers, unless they gained management responsibility, were simply paid according to their years in service. English schools control their own budgets and have some flexibility to reward teachers for excellent performance, but they still must abide by central government stipulations on teachers' employment conditions. The paper that proposed the new system said that fewer than 1% of teachers had actually received awards for excellent teaching. So Labour sought to introduce an alternative. Instead of a single pay scale for all classroom teachers, there would be two. Teachers in their first five years in the profession would typically earn pay increases annually until they reached the top of this scale. They would then have the chance to cross a to a higher pay scale if they could provide evidence of good performance to the school principal. The first rung on this new ladder, known as the Upper Pay Scale, was worth an extra [pounds sterling]2,000 ($3,128, at today's rates) to the teacher. There were four more rungs, with progression in each case dependent on demonstrating continued strong performance. Teachers had to present their principals with portfolios of evidence of their capabilities in eight categories laid down by the government. One of these related to the teacher's students making good progress in their test or in-class assessment scores, while the others were grouped under four headings covering the teacher's knowledge and understanding, teaching and assessment, wider effectiveness, and professional characteristics. The first proved the most contentious, with the largest union, the National Union of Teachers (NUT), warning that linking pay to exam scores could lead to to the test. NUT then launched a legal challenge on the ground that the government had not consulted properly on its plans. NUT won, forcing the scheme's delay in 2000. However, months later, following consultation, the pay plan was implemented. And opposition dwindled, largely because, remarkably, almost all teachers who applied for merit pay got it: 80% of eligible teachers applied, and well over 90% of those applying were successful with their threshold applications in the first round. …