Accountability and performance incentive plans in education are compromised by goal distortion, gaming, and corruption. Education policy makers who design such plans have paid insufficient attention to similar experiences in other fields. This paper describes institutions in health care, job training and welfare administration, and in the private sector, that employ performance incentive systems, and the perverse consequences that follow. Because of such consequences, in the private sector performance incentives rely primarily on subjective evaluations, not easily corrupted quantitative measurements. In the public sector and service professions like teaching, performance incentives run the risk of subverting the intrinsic motivation of agents. The paper notes, however, that despite goal distortion, gaming, and corruption, performance incentive plans may nonetheless improve average performance on measured dimensions. A bibliography is included. (Contains 249 endnotes.)