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During the 2013-2014 school year, seven districts in Mississippi began piloting performance-based compensation (PBC) for teachers; by the time the three-year pilot ended, only three remained in the pilot. Due to complications with state accountability and testing and the different approaches districts took to PBC design, we focused our research primarily on the experiences and perceptions of educators and administrators rather than on student outcomes. We found that PBC directly impacted teacher morale, exacerbated existing district-capacity deficits, and illuminated support for differentiated pay. This paper presents findings based on data from surveys, interviews, focus groups, and technical-assistance requests.