Many writers have commented on the failure of performance-related pay in industry. But profit-related pay - an annual bonus dependent on the firm's profits and based on achievement of targets has been used for many years in industry.
The principle is "if you don't perform, you don't get paid" - in other words, your appointment ends.
Poor teaching has generally been tackled (if at all) by recommending that the incumbent applies to another school, thus prolonging the problem.
Stephen Ginns, Colchester, Essex.