Canada (or at least Ontario where I live) pays teachers relatively well, hire on merit, but results are quite mediocre when measured objectively (and, for what it's worth, correlate with my own subjective anecdata). This is at least partly due to perverse incentives introduced by the seniority system. You can hire the best, but if you promote and give raises to the ones who put in the most time, the best won't necessarily stick around nearly as much as you want them to.

According to the main rule of taxation, you're going to get less of what you're taxing. I we can generalize it and say that you'll get more of what you're incentivizing.