While performance pay may be popular, all those messy details for making it work remain to be settled, as two new studies from India and Portugal show.

First, in India where some positive results were found: There, 300 schools offered their teachers a bonus of 3 percent over their monthly salaries for either producing above average test results from their own classrooms or as a result of school-wide improvements. Students taught in those schools scored significantly higher on tests than a control group of 100 schools. Students in group incentive schools and individual incentive schools performed equally well in the first year of the program, but students in the individual incentive schools did better in the second year.

Now to Portugal, where the results were negative: After a 2007 national pay reform in that country, teachers began competing to be put on a higher salary scale based on their students' test scores and classroom grades--along with a few other features of teachers' work, such as attending training sessions. Student achievement declined in comparison with schools where the pay reform was not yet available. While the test scores went down, classroom grades, however increased, suggesting grade inflation--or just plain cooking the books by teachers. The study theorizes that the drop occurred because teachers were so busy vying for a limited number of promotions that they were less inclined to work with other teachers even when it was in students' best interest to do so.