The Teachers Incentive Fund (TIF) was created in 2006 by Congress and funded by the American Recovery and Reinvestment Act (ARRA). It was set up to give incentives to teachers and principals based on evidence that there is an improvement in student performance. Factors taken into consideration include: classroom evaluations, standardized tests, school-wide and classroom-level improvement in student achievement and the instructional behavior of the teacher. Presently most states only offer small or no performance-based incentives to their teachers.
There are a number of studies that support the idea that teacher incentives affect student performance. Usually teachers are paid according to their level of experience and education, whether their students are performing well or not. According to these studies' findings, teachers are motivated to improve their student's performance when they are paid on a merit and performance based system.
There are also many studies indicating that student performance should not be used to measure teacher incentives. They propose that teacher salaries should be generally increased across the board. The contention of those who support this argument is that the current schedule of paying teachers should be overhauled. This should be replaced with better pay system for all teachers. Studies on this side of the argument indicate that performance-based pay does not always increase student performance.
Other approaches suggest that bonuses should be given to teachers in full-time service working in high-poverty or low-performing schools. By giving incentives, administrators can attract highly qualified teachers to work in these schools. From this alternative student achievement is expected to rise because the needy schools have good teachers. Teachers also benefit because they are well compensated for taking up the job to better the results in these schools.