As a parent of a child in the public school system, I believe the merit of a teacher could be measured fairly accurately, if the opinions of several different authorities were gathered. I think the input of parents could help determine this merit, as they have an outside view of how the teach helps the child throughout the school year. If that was paired with a student assesment and another assesment from the administration, a fairly accurate measure could be obtained.
Merit raises are the only fair raises. Giving everyone the same raise does not encourage anyone to do a good job. It encourages teachers to do the bare minimum as they are going to be the same financially regardless of the effort they put forward. Teachers can be evaluated on their attendance records, curriculum, as well as their students' test scores. It is as fair of an evaluation process as anyone else gets.
Fact is, the parents aren't in the classroom. They don't really know what happens, which could benefit or hurt the teacher. The parent doesn't know if the problem is the teacher or the student him/herself. It could just be the student choosing not to pay attention to the teacher, and not the teacher at all.