Critics argue against differentiated staffing on the bases that (1) limited compensation ranges lower teacher morale, (2) the loss of the services of trained teachers and the impersonality of the large group organization lower student incentive to achieve, and (3) salary savings are at the expense of the quality of the instructional program. Since most of the literature on the subject deals only in simple, logical theoretical discussion, this study attempted to answer critics through a practical implementation of the concept to ascertain if differentiated staffing could achieve school district dollar cost saving without a significant negative change in teacher morale and/or without a significant reduction in student achievement. Fifteen differentiated staff teams collaborated in one school district, and a group of traditional teachers functioned as the control unit. The dollar difference was computed to be less than 1 percent of the total cost; none of the schools reported a lower teacher morale during the first year of the team operation; and, in terms of cognitive growth, those students team taught remained at least on a par with their control groups. (Author/EA)