Pay-for-performance systems in public schools have long been burdened with controversy. Critics of performance pay systems contend that because teachers' impact cannot be measured without error, it is impossible to create fair and accurate systems for evaluating and rewarding performance. By this standard, however, current practice fails on both counts. Fair and accurate teacher evaluations are at the heart of pay-for-performance systems in schools. Fair and accurate teacher evaluations for performance pay decisions should take a balanced approach, using multiple data sources to gauge teacher effectiveness. The authors suggest the use of both outputs, that is empirical data from value-added assessment, and inputs, that is observational data from sophisticated performance frameworks, in the process.