The main purpose of teacher evaluation has been, in general, to identify incompetent teachers, but another purpose has attracted attention recently. Although teacher evaluation is still used for firing incompetent teachers, it is also able to contribute to teacher competence improvement. In Minnesota, the Quality Compensation Program for Teachers (Q Comp) has been in use for several years, enhancing the teaching competence of all public school teachers. Q Comp is adapted from the Milken Institute's Teacher Advancement Program (TAP), a pilot merit pay program currently being implemented in several test schools across the country. The program has three components : 1) alternative compensation and performance pay/ career ladder for teachers, 2) standard-based assessments / measures to determine student growth, and 3) job-embedded professional development. These components involve establishing additional jobs, which typically include mentoring positions for experienced teachers. The program also allows districts to establish a new teacher compensation system. The primary goal of this paper is to examine the positive and problematic characteristics of Q Comp and to provide some suggestions for teacher evaluation systems in Japan. This study examines Q Comp's implementation by the Minnesota department of education by analyzing related official documents and interviewing Q Comp coordinators, teachers, and administrative staff members. One of the main study findings suggests that the Q Comp legislation requires creating comprehensive tools for the accurate measurement of teacher performance. Teacher performance is divided into two aspects: input and output. Input performance is measured by using standards-based assessments and teacher observations. Meanwhile, output performance is linked to results of student test scores. Second, to ensure validity of evaluation, the Q Comp legislation provides annual trainings for evaluators. In addition, leader teachers, who mentor new teachers and career teachers, assess teacher evaluation results, and their involvement enables other teachers to accept their evaluation results easier. Third, Q Comp is utilized as a piece of the organizational system of the school to support teachers in meeting organizational goals and expectations. Teacher compensation is a valuable organizational tool that could be used to support teacher skills and knowledge development of teachers, and provide incentives for teacher teams to improve their students' achievement.