We've all had one. That lazy teacher who just sits up front and hands out packets. If teachers are paid based on seniority, they can just sit at the front of the room handing out busywork and not doing any actual teaching. If the teacher is paid based on class scores, it gives her an incentive to teach the class to the best of her ability.
Merit-based pay for teachers would revolutionize the effectiveness of schools. If a teacher can earn more money from doing a better job that results in students having a better learning experience, they should be rewarded and encouraged to continue with their methods. Everyone wins with this type of environment, especially the students. Teachers that can't produce the desired results really shouldn't be teaching and this would help to rid the system of such dead weight.
The teachers have no control over their classroom performance. Teachers cannot make a student read or whatever. There is no point in doing merit-based pay because teachers have no more control over their classroom than the weatherman has on the weather. What are the teachers going to do, whip the kids?