The American Association of School Administrators believes that professional compensation programs for teachers should incorporate three goals: (1) entry level salaries should be sufficiently high to attract the top one-fourth of those choosing vocations requiring at least a bachelor's degree; (2) the plan must be sufficiently competitive to hold a competent staff; and (3) several principles must be included to assure success. These principles are that the program should be open to all who wish to compete, merit salaries should range 5 to 20 percent above those paid to similar competent professionals, evaluations should be based on measurable abilities, wide political support will be necessary to attain adequate funding, and those who will be affected should be involved in the development. Those who develop merit programs need to be aware of problems which have caused difficulty in the past. A key factor is productivity. Ultimately, a merit pay plan should be judged by its ability to assure effective education for all students. (DC)