The career-ladder system is a special form of monetary compensation which classifies teachers according to a multi-tiered ladder. Teachers receive extra compensation as they are promoted up this ladder.

  The aim of this paper is to examine the background and structure of the career-ladder system. I focused on Texas, since it played a major role in legislative reform of teacher education in the 1980s. The results of this study are as follows:

  First, the career-ladder system is aimed at resolving the problems of both teacher shortages and the decline in the quality of instruction. A serious teacher shortage developed as a result of low salaries. Thus, a better pay system was required to compensate competent teachers within restricted funding.

  Second, it reflects the view that teachers' abilities must be measured from many sides. Teachers are divided into four different ranks in the Texas career-ladder system. Ranks are determined by a teacher's certificates, career, teaching performance and higher academic training. Teachers must meet all requirements to promote his/her grade.

  Third, the fundamental principle of the career-ladder system is “effectiveness.” This means that performance-based salary increases effectively provide incentive for teachers to improve their teaching standards. But there are many problems. In the career-ladder system, salary increases remain a permanent part of teachers' salary. The costs will become enormous. It is difficult to see the “effectiveness” principle being realized in the long term. It will be important to develop a better teacher evaluation system and to reexamine the principles of teacher compensation.