This video by Prof. Daniel Willingham describes six problems with value-added merit pay plans.
I am pro-merit pay, or I would be, if someone could figure out a way to do it that actually reflected teacher performance. Even value-added measures don't. (I wish they hadn't used the word "fair" in the video. The issue isn't fairness, it's the VALIDITY of the measures used. Yes, when you're talking about measuring performance for pay that's essentially the same thing as fairness, but sounds more scientific and less prone to inspiring complaints about "whiny" teachers.)