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Legislators and school districts are reviewing alternative compensation plans in an effort to attract and retain qualified teachers. Limited merit-pay based plans have been abandoned, and the single salary schedule remains in place nationwide. A tight labor pool, greater scrutiny by legislatures, and new laws create pressures to raise salaries even while half of new teachers resign within five years and policymakers remain reluctant to allocate more resources. The four major systems in use today are: (1) pay for performance linking compensation to student achievement; (2) knowledge- and skills-based systems employing new assessment tools; (3) school-based award programs offering financial bonuses for reaching specific goals and benchmarks; and (4) compensation for certification with the National Board for Professional Teaching Standards (NBPTS). Beginning in 2002-2003, Cincinnati will be the first large city to drop traditional salary structures: teachers with less than 22 years' experience will be compensated based on evaluations of teachers grouped into five career categories. A Pilot program in Denver and Douglas County, Colorado, includes, respectively, a mix of three pay-for-performance and a blend of pay-for-performance plans and knowledge-and-skills based plans. School districts can turn to a variety of resources for guidance in evaluating approaches to compensation, including the Consortium for Policy Research in Education's Teacher Compensation Project, a Milken Family Foundation report, and publications by the American Federation of Teachers, the National Commission on Teaching and America's Future, and Education Week. (Contains 17 references.) (TEJ)