This paper presents an approach to merit pay that can spur achievement of three important goals: (1) rewarding outstanding teachers with both salary and prestige; (2) strengthening the teaching profession by cultivating leadership from within and encouraging collegial support; and (3)making it professionally and financially advantageous for the best teachers to remain in the classroom enhancing the quality of education. This kind of successful approach depends on viewing merit pay in the proper perspective: (1) teacher professionalism can be enhanced if the best teachers guide teacher candidates into the profession; (2) to attract highly qualified people, teaching must offer competitive salaries and promotional opportunities that do not take teachers out of the classroom; and (3) teacher evaluation must be made effective and should be research-based. Without such improvements in the profession, myths about the difficulties of differentiating appropriately among teachers will continue to dominate thinking about merit pay and will restrict possibilities for using merit pay fairly and effectively. (PGD)