A significant number of educator compensation reform efforts are under way throughout the country. These school-, district-, and state-level programs come in all shapes and sizes--some are small and focus only on a cohort of teachers or schools, whereas others are large and target entire districts or groups of districts. The structure of these compensation incentives varies substantially across these reform programs, ranging from individual educators who receive awards for their performance to rewards based solely on group performance. This variation in the structure of performance-based compensation programs is one of the most nuanced, least understood, and rarely discussed aspects of compensation reform efforts. The purpose of this paper, therefore, is to assist the stakeholders in alternative compensation initiatives to better understand the ways in which they can structure performance incentives in the context of their intended outcomes, local culture, and available options for measuring educator and student performance. With this information, stakeholders can select the reward structure most suitable for the needs of their specific education system. (Contains 3 footnotes.) [For "Alternative Compensation Terminology: Considerations for Education Stakeholders, Policymakers, and the Media. Emerging Issues. Report No. 2," see ED533047. Note: The full text of this report is mislabeled as "Report No. 2."]