This paper reviews selected literature pertaining to merit pay, differentiated staffing, and incentive pay programs. The first section reviews the history of these alternatives to the single salary schedule, beginning with an account of two experimental merit pay plans in the early 20th century. During the 1920s, merit pay plans gave way to the single salary system in an effort to end the salary discrepancies between elementary and secondary school teachers, but the interest in alternatives to the single salary schedule was revived in the early 1960s, when the concept of differential staffing was introduced in California. The second section reviews the content of proposed and existing plans from 1980 on. Incentive pay programs provide bonus payments to promote teaching as a rewarding career and to help meet district goals. Examples of incentive pay programs in Florida, Houston (Texas), and Minnesota are described, with special attention to Houston's "Second Mile Plan." Differential staffing or career ladder programs are then described, including the Florida Merit Compensation Program, the California Mentor Teacher Program, and the Tennessee Master Teacher Program, along with the Charlotte-Mecklenburg Schools Career Development Plan. Finally, arguments for and against straight merit pay plans are reviewed, and examples of such plans in California and Arizona are cited. The final section discusses the controversy surrounding attempts to define teacher excellence. (TE)