Bill Gates picked one school to visit in 2012, Eagle County High School in Colorado's Eagle County school district.
http://www.vaildaily.com/article/20121015/NEWS/121019915

He wrote about it in The Wall Street Journal in January 2013
http://online.wsj.com/article/SB10001424127887323539804578261780648285770.html?mod=ITP_review_0

Quote from that article:
In October, Melinda and I sat among two dozen 12th-graders at Eagle Valley High School near Vail, Colo. Mary Ann Stavney, a language-arts teacher, was leading a lesson on how to write narrative nonfiction pieces. She engaged her students, walking among them and eliciting great participation. We could see why Mary Ann is a master teacher, a distinction given to the school's best teachers and an important component of a teacher-evaluation system in Eagle County.
Ms. Stavney's work as a master teacher is informed by a three-year project our foundation funded to better understand how to build an evaluation and feedback system for educators. Drawing input from 3,000 classroom teachers, the project highlighted several measures that schools should use to assess teacher performance, including test data, student surveys and assessments by trained evaluators. Over the course of a school year, each of Eagle County's 470 teachers is evaluated three times and is observed in class at least nine times by master teachers, their principal and peers called mentor teachers.
The Eagle County evaluations are used to give a teacher not only a score but also specific feedback on areas to improve and ways to build on their strengths. In addition to one-on-one coaching, mentors and masters lead weekly group meetings in which teachers collaborate to spread their skills. Teachers are eligible for annual salary increases and bonuses based on the classroom observations and student achievement.

The program faces challenges from tightening budgets, but Eagle County so far has been able to keep its evaluation and support system intact—likely one reason why student test scores have improved in Eagle County over the past five years.

For the district scores did go up for five straight years from 2007 to 2011, but dropped in 2012
Math
2007 52
2008 51
2009 56
2010 58
2011 61
2012 56 (4 points above 2007)

Reading
2007 65
2008 66
2009 68
2010 70
2011 71
2012 73 (8 points above 2007)

Writing
2007 54
2008 52
2009 55
2010 56
2011 60
2012 58 (4 points above 2007)

Science
2010 51
2011 51
2012 51 (no change)

There are two high schools in Eagle County, Eagle County High which Gates visited and Battle Mountain High School, which is struggling despite having the same teacher evaluation / compensation system as Eagle County High School.

Battle Mountain
Economically Disadvantaged
Math
2007 10
2008 6
2009 9
2010 20 (17 for state)
2011 18 (17 for state)
2012 9 (17 for state)

Reading
2007 29
2008 29
2009 42
2010 41 (48 for state)
2011 37 (46 for state)
2012 51 (50 for state)

Writing
2007 18
2008 7
2009 21
2010 26 (27 for state)
2011 21 (29 for state)
2012 27 (30 for state)

Science
2010 23 (25 for state)
2011 18 (26 for state)
2012 19 (28 for state)

Merrit pay in Eagle County
Was originally the TAP program where teachers would get bonuses. then changed to a system where bonus was a percent of your salary, up to 4% for test scores and 4% for observations. Seems like they ran out of money for it, though.
Seems to be a max of $5,000 for a veteran teacher or $3,000 for a new teacher.

Also has positions for mentor teachers (5,000 dollars) and Master teacher (10,000 dollars) who are part time administrators helping other teachers.
Evaluation called the PEAR
Professional Excellence, Accountability and Recognition

It is quite confusing, but teachers can get about 8% based on their district and schools test scores. Then teachers can get raises based on their individual ratings. Seems like bonuses are around $3,000 to $5,000 depending on their salaries.

In this flyer it says that bonuses are currently cut in half because of budget concerns, so you can only get a max of 4%. The average is 2%, which is, on average, under $1,000.

http://www.vaildaily.com/article/20120921/NEWS/120929980

Flyer from district about the merit pay plan
http://www.eagleschools.net/index.aspx?page=649

  • Annual Bonus. There is an annual bonus paid to teachers based on an index of student assessment results. The index is made up of a district-wide ACT component, a district-wide CSAP component, a building CSAP component and a building NWEA-MAPS component. These four components come together to form an index of assessments which determines the amount of the teacher bonus. This bonus is up to 4% of the teacher’s actual contract salary (due to the current budget crisis, the percentage used in payout calculations is currently cut in half).
  • Salary Increase. Eagle County Schools abandoned the “lock-step” salary schedule in 2002. Increases to salary are determined by 0 to 4% for individual performance based on the teacher’s evaluation scores (due to the current budget crisis, the percentage used in payout calculations is currently cut in half), plus a negotiated/inflationary component (varies based on cost of living, funding).

Colorado data website is great
https://edx.cde.state.co.us/growth_model/public/index.htm#/year-2012/district-0910/schools

Some stats:
6000 students in district
50% hispanic 50% white
33% free lunch 10% reduced