It will give teachers an incentive to improve their teaching.  For decades now, teachers have been remunerated based on 'seniority'. This means that they don't have an incentive anymore to improve themselves, no matter how motivated they were at the beginning. Why try to improve yourself if you have nothing to gain from it? Adding a financial reward for exceptional performance will motivate teachers to do their utmost to develop the knowledge and talents of their pupils. [1]  [1] Muralidharan and Sundararaman, “Teacher Incentives in Developing Countries: Experimental Evidence from India”. Podgursky and Springer, “Teacher Performance and Pay” 2007