Since the 1996/97 school year, the state of North Carolina has awarded bonuses of up to $1,500 to teachers in schools that exhibit test score gains above certain thresholds. This article reviews the details of the bonus program, describes patterns of differences between schools that qualify for bonuses of differing amounts, and presents basic data to address the question of whether the bonus program has improved student achievement, or has led to a narrowing of racial or socioeconomic achievement gaps. There is some evidence to suggest an improvement in overall test scores, particularly in math, but less evidence to suggest that achievement gaps have narrowed. The bonus program has been associated with higher rates of turnover in low-performing schools; differential pay programs may be one way to avoid this unintended consequence.

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