An overview of incentive programs for teachers, administrators, and schools is presented in this report. Topics of discussion include trends in state and local funding, rewards based on teacher performance versus student performance, and program evaluation and outcomes. Discussion findings indicate that the most important and persistent questions concern effects on student learning, on schools, and on the professional appeal of teaching. Third-party evaluations are recommended for local programs supported by state funding. Collegiality among teachers, administrators, and policymakers is crucial for incentive program success. Descriptions of 1989 incentive programs by state and a list of state contacts are included. (13 references) (LMI)