Chapter 12 of Diane Ravitch's brilliant new book, Reign of Error, lays out the old and new history related to merit pay in schools. In short, old schools and new schools of many types pushed by many different entities have failed to implement successful PfP plans.
Unfortunately, my kids' district keeps signaling a move from the current teacher salary schedule to a complicated, labor-intensive, stack-ranked pay system for teachers. I worry a PfP is being produced by local officials without a thorough look at the educational reasoning and research.