Responding to a state legislative mandate establishing the Iowa Educational Excellence Program, a coalition comprised of the Iowa State Education Association, the Iowa Association of School Boards, and the Iowa Department of Education was formed to examine and address the growing needs and concerns of teachers, including teacher compensation. The coalition discussed alternatives and provided direction to setting minimum salaries, increasing salaries, and providing guidance in setting up a performance based pay incentive. The program consisted of three phases which addressed: (1) the recruitment of quality teachers (Phase I); (2) the retention of quality teachers (Phase II); and (3) enhancing the effectiveness of teachers through performance based and supplemental pay (Phase III). Research conduted on the career orientations of high school students, teacher attrition, teacher salary scales, the distribution of state monies in school districts, and teacher-student ratios is analyzed. A recommendation is that Phase III funding to be used to encourage the school districts to engage in staff and curriculum development. (JD)