I agree that many times with monetary incentive systems, groups are excluded for no good reason. I know as an educator that I have been frusterated with that more than once. My district recently piloted a cash bonus program (not in my school, but in a collegue's) and I know that after she came back from the training on the new pay system she was disheartened to learn that she could not receive the bulk of the bonuses because she teaches in a primary grade where state tests are not administered. As a Kindergarten teacher there were some bonuses she could receive, but not nearly as much as her 3rd grade collegues. She left the debriefing feeling like the administrators devalued her grade and her work just because her students weren't taking the state test.
Thought I think that if done properly, a monetary reward system is appropriate. As mentioned, we would never tell a doctor that their only reward for good work is knowing that they saved a life. In what other profession do we expect people to do the job only for the intrinsic joy of their work? Even a waitress takes pride in her work, but she's still constantly doing a better and better job to earn better tips. I feel like teachers have been taken advantage of because its expected that we do our work for the sake of the children. The only reason I have to try and do better every day is to help anther student learn a little bit more, and while that is good motivation, its very unsatisfing when I get my paycheck. I could get the same paycheck every week by doing just enough to not get fired (and frankly, that isn't all that much). My students would suffer, my school would suffer, and my collegues who would have to deal with the repercussions of my actions when my students advance a grade would suffer as well. There are a lot of reasons that people get into teaching - some care about the students themselves, some care about education as an idea, some just want summers off. We can't control the reasons people choose the profession, but I think some kind of merit pay system would promote success no matter what your reason for teaching was. I don't know the appropriate framework for it, though.
