Seniority-based wage scales should be abolished in favour of using test scores to determine what pay a teacher takes home, a cross-party panel of government, business and education leaders has recommended.
The Teaching Commission - headed by ex-IBM chairman Lou Gerstner, President Clinton's education secretary, Richard Riley, and former first lady Barbara Bush - called for a new pay formula that would raise the earnings of the top-performing half of teachers in the United States by 30 per cent on top of a 10 per cent base pay rise.
The commission is lobbying local school chiefs and hopes to announce plans to roll out performance-based pay in eight or nine states next month, according to its director Gaynor McCown.
Attempts to hitch pay to performance have had a chequered history so far, but experts are hailing it as an idea whose day may finally have come.
"There's a growing bandwagon of support," said Michael Allen of the Education Commission of the States, which keeps tabs on educational developments across America.
He said that an important driving force was the spread of standardised tests, which has made assessment of a teacher's effectiveness less subjective.
"It's the missing link," added Ms McCown. "The one thing teachers can't be evaluated on is student performance, and that's the one thing everyone assumes is their main job."
Mr Allen estimated that to date less than 5 per cent of schools have introduced merit pay - usually linked to overall academic achievement.
However, in a small but growing vanguard of Texas schools, among others, staff salaries ride on their own classes' results, Ms McCown said.
While pilot initiatives in Philadelphia and Iowa were scuttled recently after they proved too convoluted or expensive, the organisers of America's most closely watched performance-pay trial, spanning 640 teachers at 16 Denver schools, concluded last month that a focus on student achievement and a teacher's contribution to it can be a major catalyst for change.
Unions typically oppose performance pay on the grounds that it discounts unquantifiable achievements, and, said Mr Allen, because they stand to lose bargaining power if collective across-the-board pay settlements are abandoned.
But Brad Jupp of the Denver chapter of the National Education Association, co-organiser of the Denver scheme, is a convert. Performance pay may represent teachers' best bet for convincing education chiefs to increase salaries, he suggested.
"Lawmakers are receptive to raising teachers' pay, but are reluctant to do it unless there's accountability," said Mr Allen.