Advocates of merit pay believe that teachers who prove themselves to be effective should be given opportunities to earn appropriate rewards while remaining in the field of education and in the classroom where they can directly impact student learning (Figlio & Kenny, 2006; Glewwe, Ilias, & Kremer, 2003; Ritter & Barnett, 2013). Furthermore, proponents of equity might argue that the most effective teachers should be encouraged, not discouraged, to work with students in low-income areas with the greatest educational needs. Thus, in this age of increasing accountability for teachers and schools, compensating teachers based on what they actually do with their students, in lieu of the more traditional approach, has become increasingly common in education today. However, there is much debate about whether merit pay programs actually do lead to positive benefits for teachers and students, or if they instead lead to a number of negative outcomes for teachers (Cordes, 1983; Sawchuck, 2010). To begin understanding the objectives of this review, the authors provide the following definition for how they are examining "merit pay". Consistent with prior literature (Podgursky & Springer, 2007), they define merit pay as rewards for individual teachers, groups of teachers, or schools on any number of factors, including student performance, classroom observations, and teacher portfolios. Merit-based pay is a reward system that hinges on student outcomes attributed to a particular teacher or group of teachers rather than on inputs such as skills or years of experience. These rewards can be bonus amounts provided at the end of the year, or they can be increases to base salary. The general goals of merit pay programs are fairly straightforward: (1) incentivize teachers to invest greater time and effort into their teaching; (2) reward teachers for exceptional work; and (3) encourage teachers to stay in the classroom. However, school districts that implement such a program are often left developing them with little knowledge of the effectiveness or characteristics of other systems. The objectives of the proposed review are to answer the following questions: (1) To what degree do merit pay programs impact student achievement outcomes? (2) To what degree do merit pay programs impact teacher outcomes (e.g. retention; satisfaction)? (3) What are the distinguishing characteristics of the most successful merit pay programs? and (4) For which subgroups of students/teachers/ school systems are merit pay programs most or least beneficial? The objectives of this review are intended to inform the practical issues school leaders and policymakers face when considering a merit pay program and provide guidance on the impact of these programs on student achievement.