I'm a strong advocate of performance pay for teachers when done at the school level. Our school offers a very nice bonus to the "Teacher of the Year," and a lesser bonus to the runners up. The TOTY is voted on by the teachers themselves in a 2-level voting scheme. Yes, there's always going to be some favoritism, but that's true in industry too. At least in my memory, the TOTY bonus has never gone to someone other than a truly outstanding teacher.
While I'm on the subject, why is it that we pay large bonuses to sports coaches (admittedly who spend extra hours coaching), but nothing to outstanding teachers who spend extraordinary hours doing paperwork, grading papers, and preparing for classes? Do we value outstanding football teams and baseball players more than outstanding students? Which are going to contribute more to our society in the long run?
Re your post #21 - I agree with your entire post. Thanks for your thoughtful comments.