State accountability systems and the federal No Child Left Behind Act have put additional demands on schools and teachers to improve teacher quality and improve student achievement. Many researchers (e.g., Cohen, 1996; Corcoran & Goertz, 1995; Floden, 1997; Newman, King, & Rigdon, 1997) have argued that such improvements will require a substantial increase in the instructional capacity of schools and teachers. One strategy for capacity building is to provide teachers with incentives to improve their performance, knowledge, or skills. The incentive strategy requires the design and implementation of alternative teacher compensation systems that depart from the single salary schedule (Odden, 2000; Odden & Kelley, 2002). Though slow to take hold, the incentive strategy is currently being pursued by several states (Peterson, 2006). Most of these new or proposed plans link pay to combinations of assessments of teacher performance, acquisition of new knowledge and skills, and student test score gains. Denver's widely followed Pro Comp plan also contains these components. The Teacher Compensation Group of the Consortium for Policy Research in Education (CPRE) has been studying the design and effectiveness of such systems for nearly a decade. We initially focused on school-based performance award programs, in which each teacher in a school receives a bonus for meeting or exceeding schoolwide student achievement goals (Heneman, 1998; Heneman & Milanowski, 1999; Kelley, Heneman, & Milanowski, 2002; Kelly, Odden, Milanowski, & Heneman, 2000). We then shifted our attention to knowledge- and skill-based pay (KSBP) plans, an approach that provides teachers with base pay increases for the acquisition and demonstration of specific knowledge and skills thought to be necessary for improving student achievement. Our initial research described a variety of experiments with KSBP plans (see Odden, Kelley, Heneman, & Milanowski, 2001). We found plans that were rewarding numerous knowledge and skills, including (a) additional licensure or certification, (b) participation in specific professional development activities, (c) National Board Certification, (d) mastery of specific skill blocks such as technology or authentic assessment, (e) leadership activities, and (f) teacher performance as measured by a standards-based teacher evaluation system. We also found districts experimenting with standards-based teacher evaluation without an intended pay link. As described below, in standards-based teacher evaluation systems, teachers' performance is evaluated against a set of standards that define a competency model of effective teaching. Such systems replace the traditional teacher evaluation system and seek to provide a more thorough description and accurate assessment of teacher performance. Findings from our research on some of these systems are the focus of this issue of CPRE Policy Briefs.