Abstract: Quality compulsory education plays a crucial role in the development of rural areas in China. The key to quality education is to motivate teachers and guarantee their welfare and interests. The study is based on a survey of 216 schools in rural areas, involving 350 math teachers and 10,768 students, to examine the effect of performance incentive on education quality. In a randomized intervention trial, 237 mathematics teachers and 7,357 students in the sixth grade participated in the first investigation, and 113 mathematics teachers and 3,411 students of the fifth grade participated in the second investigation. The findings show that percentile incentives based on increased students' performance help to encourage teachers to improve their teaching performance. Their students' academic performance was increased by 0. 10 to 0. 15 standard devia-tion, and below-average students show remarkable improvement. The results suggest the percentile incentives based on students' academic performance effectively promote performance of all students. Finally, we put for-ward strategies to improve teacher performance by percentile incentives, which is expected to encourage teach-ers to address the learning needs of all students.

Key words: Northwest rural area, performance pay, experimental research