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In the era of the knowledge and learning economy, education has become a major issue and the teacher now plays a central role as a key variable in educational production. We will examine the methods used for boosting teachers’ performance in order to improve school results. Incentives such as performance-related pay for teachers are frequently recommended as a means of improving teachers’ performance and educational outcomes in schools, but the empirical evidence to date on its effectiveness is mixed. This paper offers a review of both the theoretical and empirical literature on how incentives affect teachers’ behaviors. We will examine the arguments for and against teacher incentives. In particular, we will look at i) the difficulties in monitoring and evaluating teachers’ performance, ii) the issue of teamwork in the context of rewarding individual teacher performance, and iii) the problem of multi-tasking when only some duties are quantified and incentivized. JEL Classification: I21, I28, J33, J45, M52.