Offering merit pay to teachers does nothing to liberate principals from the shackles of union contracts and state licensing requirements that determine whom they can hire and fire. Neither does it give principals the incentives enjoyed by private sector managers to hire and retain the most effective employees they can find. Nor does it break the government funding monopoly of public schooling, which pressures parents to stick with public schools even when there are better and more efficient private alternatives. It also fails to provide the freedoms and incentives to would-be education entrepreneurs that are responsible for the scale-up of top providers and effective new innovations in every other field.
In the end, public school merit pay lashes a few feathers to a brick. Why be surprised when it doesn’t fly?