Abstract: This paper, based on the investigation of teachers from four different levels of schooling in 13 provinces in eastern, central and western China, examines the status quo, dilemma and improvement of the implementation of performance-based pay policy in high schools by using research methods including questionnaire survey, interview and text analysis. The findings show that performance-based pay system in high schools is not functioning well for lack of incentives. In particular, such a system fails to effectively guarantee a satisfactory pay for high-quality teachers, resulting in the loss of those teachers. This paper further analyzes the causes of the above problems from the aspects of the total level of performance-based pay, the setting of evaluation indicators, and the single economic incentive of performance-based pay. Therefore, it is essential to improve the performance salary system in high schools, like increasing the total performance-based pay and establishing a mechanism of pay rise. Also, the effect of economic incentive should be enhanced, and it’s necessary to implement the reform of the performance-based pay system. Combined with the application of students’ comprehensive quality evaluation, efforts should be made to enhance the scientific and fair teacher performance appraisal.

Key words: performance-based pay system, high school teachers, incentive dilemma, performance bonus