The purpose of this study was to determine what factors affect the perceptions of Arkansas teachers concerning implementation of performance pay systems in P-12 education. This study addressed the following research questions: (1) to what extent do P12 Arkansas teachers differ in their ranking of four performance pay systems: pay for individual performance, pay for knowledge and skills, pay for team performance, and pay not based on performance? (2) do Arkansas teachers' rankings of four performance pay systems differ by grade level taught, when divided into early elementary/elementary and middle/secondary? (3) to what extent are Arkansas teachers' rankings of four performance pay systems related to their years of experience, and their perceptions of their own professional efficacy as well as the professional efficacy of other faculty members and their principal? and, (4) to what extent are Arkansas teachers' rankings of four performance pay systems related to factors that make up five sets of criteria commonly used in designing such systems which are (a) 360° evaluations, (b) teacher leadership, (c) student achievement, (d) exceptional circumstances, and (e) professional development/growth?

A total of 502 certified teachers who had taught in Arkansas public schools for at least one year participated in this study. The Teacher Evaluation Profile (TEP). The Performance Pay Survey (PPS), and The Teacher Survey on Performance Pay (TSPP) were used to gather quantitative data from participants. Because the dependent variables in this study involve rank-order data, Friedman repeated measures ANOVAs, followed up with list-wise comparisons of the ranks using Wilcoxon signed-ranks tests, were employed to answer questions one and two. To answer questions three and four, Spearman rank-order correlations along with factor analyses were computed to determine whether statistically significant relationships exist between the variables of interest and teacher rankings of the four performance pay systems.

Four distinct themes evolved from the data: (1) preference toward pay for knowledge and skills; (2) indifference toward pay for team performance; (3) the importance of a positive school climate and culture in relation to performance pay systems; and, (4) alignment of performance pay system and factors used to determine pay for performance.