Although employment decisions must be in harmony with existing case laws and statutes, such decisions allow for more flexibility than is sometimes supposed. Increasingly, state legislators and other public officials (including Secretary of Education T. H. Bell and Tennessee Governor Lamar Alexander) are working to establish differentiated pay scales that would reward teachers for high performance. Although the single salary pay scale has the advantage of not being race or sex biased, it offers equal rewards for work of varying degrees of quality. To provide incentives that will attract good teachers and keep them in the profession, many school administrators are now approaching the question of teacher salaries more aggressively. A recent South Carolina court case affirms efforts to improve instructional programs through variations in salary based on testable teaching related competencies. Because of United States civil rights legislation (1866, 1871, and 1964), school district attempts to establish variable pay plans must be able to refute any accusation of discrimination. Three recent court cases in Colorado, Oregon, and North Dakota indicate that the key to such variable pay plans is that they give fair promise of improving instructional quality within the confines of state and federal laws. (JBM)