The success of a student depends on many factors, like innate talent, the ability for hard work and concentration and socio-economic background. This means that any progress that a student can make is largely outside of a teacher's control. This will result in some teachers being rewarded just because they happen to teach in a good environment to 'advantaged' children whereas other teachers who do a good job in a bad environment to 'disadvantaged' children are just unlucky.

Cheating is inevitable in any bureaucratic system that holds educational institutions accountable- in any way- for the outcomes of the educational processes that they supervise.

Teachers will have an incentive to cheat the system, for example by altering students' test results or giving them easier tests.[1] On a more 'macro' scale, teachers will have an incentive to only want to teach at 'good' schools with 'advantaged' students who have both the will and the ability, because their chances of a good performance there are higher.

Teachers will start 'teaching to the test' to ensure their classes make the grade. Independent, creative, self-reliant thinking will therefore be discouraged as the teacher focuses on getting as high test results for their pupils as they can regardless of whether they really understand the concepts behind what they are doing. If the primary goal of education is to create critical thinking citizens, then merit pay may hinder rather than help achieve that goal.

Students come from very different backgrounds and have very different skill-sets. This makes the attempt to define a measuring system that covers all cases a bureaucratic nightmare. Even if this succeeds, it is still very difficult to define what a 'good performance' is, because a student's individual performance is determined by many other factors than the teacher and also because an individual student's 'performance' is actually a complex set of attitudes, skills and abilities which are in and of themselves hard to operationalize in a standard test. And even if this succeeds, then the questions is how much of a student's performance is attributable to what specific teacher: oftentimes, at least in high school, students will have many different teachers, making it impossible to gauge what teacher was responsible for what test result.

Finally, it should be noted (per the argument included above) that merit based education does not encourage the dissemination and normalisation of best practice. A merit-based pay scheme is likely to collapse when too many of those who work under it meet its criteria for bonus payments, making it too expensive.

Once merit based pay becomes part of the structure of an institution, it will become hard to attract and retain staff if it is removed. Concurrently, performance at the same level will be expected by the public, although an institution may not be able to afford it. For the reasons stated above, good ideas are unlikely to be shared by teaching staff under a merit-based status quo, for fear that they may be giving away a competitive edge over their colleagues.

It might be better to raise standards in education by investing sustainably in improved training for teachers and improved facilities in schools, rather than creating an unsustainable merit-based reward system.