Paying teachers based on student performance has been rejected by New Zealand's largest provider of quality independent education - ACG - because it is too difficult to measure and could lead to teacher disillusionment.
Instead they reward through a wide-ranging appraisal system. As a result, many teaching staff receive an annual bonus on top of their regular salary.
The debate was reignited recently in a report by the right-wing thinktank NZ Initiative which said teachers' pay rates should be based on how much progress students make in learning. It said performance-based systems of evaluating and paying teachers in Britain and the United States "provide lessons worth considering in New Zealand."
But Nathan Villars, principal of ACG Sunderland in Henderson, says not all students are the same which makes measuring a teacher's performance difficult.
"Being fair and equal to all teachers is the challenge," he says. "How do you assess say, a teacher who has a group of highly motivated students against one whose students are not as focused?"
Villars says a teacher's work can be affected by factors such as the level of the student's early childhood education, the impact of teachers they have had in the past, their health and home life.
"The number of variables makes judging teacher performance on this basis complex and inaccurate and has the potential for teachers to become disillusioned and ultimately lost to the profession."
Villars says there is also a danger teachers will "teach to the test" to gain good marks and be distracted by the money on offer. This could result in some taking their focus off what drew them into the profession in the first place - the love of teaching children and satisfaction from watching them learn and improve.
While the NZ Initiative report points to examples in the US where teachers have improved when standing to receive higher pay, many experts in the field share ACG's view.
Roland G. Fryer, a professor of economics at Harvard University in the US, said he could find no evidence that teacher incentives increased student performance in a 2011 study conducted among 200 New York city public schools.
"Nor do I find any evidence that the incentives change student or teacher behaviour. If anything teacher incentives may decrease student achievement, especially in larger schools."
Fryer suggests a number of reasons: "Incentives may not have been large enough, the incentive scheme was too complex, or teachers may not know how they can improve student performance."
In New Zealand, NZ Principals Federation president Whetu Cormick said in a New Zealand Herald report last month it was a "massive challenge" to develop a system to measure students' progress consistently.
He said he was against tying teachers' pay to any such measures: "You end up with competition (between teachers) and competition can sometimes breed people's unwillingness to collaborate."
ACG - who investigated paying teachers based on student performance but later dismissed the concept, believe their bonus system is more effective and objective - and appears to be working.
ACG students achieve more Cambridge International awards (University of Cambridge international examinations) than any other school in New Zealand.
Villars says ACG started looking at ways it could fairly reimburse high-performing staff in 2003. It has since introduced the present bonus system which works on an appraisal of 12 criteria, taking into account variables in the classroom.
It is consistent with ACG's expectation their staff exhibit three core qualities: competence in their subject, a chemistry that fits the school culture of improvement and core character.
The system also assesses subject knowledge, learning environment, relationship with students, respect for the differing cultures, heritage and languages of students, commitment to ongoing professional development, leadership and the ability to plan and implement learning programmes.
Villars says the assessment is carried out for all ACG staff. An appraiser meets each teacher and spends time observing them in the classroom. Student and school management feedback is also sought before the appraiser meets with the principal of each college to determine "an agreed outcome."
