A description is given of a career ladder incentive program that is currently being implemented in nine school districts in Arizona. Advancement to higher career ladder levels is dependent on meeting various criteria established by the individual school district in this program, and salary compensation is based on performance competency. Competency is judged by "input criteria," which refers to the level of functioning of a teacher while engaged in the instructional process. This includes oral presentation and communication as well as teaching strategies and materials. "Output criteria," involves level of student response. Both teacher input and student output criteria are observed through various evaluation procedures, including the use of performance observation instruments, formal and informal tests, and other measurement procedures and scales. The teacher input evaluation criteria for maintenance and/or advancement requirements at the various levels of each career ladder plan are generalized into the following areas: (1) knowledge of subject matter, instructional techniques; (2) professional growth; (3) curriculum skills; (4) inservice/workshop participation; (5) evaluation abilities; (6) supporting experiences; and (7) community service. A description is provided of the implementation features of the program and of proposed program evaluation procedures. (JD)