The State of Georgia developed and implemented an educational reform initiative called Pay for Performance in 1994. This group incentive program provides structure for school-wide improvement while allowing teachers to set and achieve goals where successful implementation results in a performance pay grant. The program was intended to increase the overall educational performance of the school in areas related to student achievement. The Georgia State Department of Education reports that student achievement is significantly higher at Pay for Performance schools. The Department of Education also reports school climate indicators are stronger at Pay for Performance schools. The purpose of this study was to examine the effectiveness of the Georgia Pay for Performance Program. This was accomplished by comparing a successful Douglas County Pay for Performance middle school with four Douglas County non-Pay for Performance middle schools. Standardized norm referenced test scores were reviewed for the sample schools in order to examine differences in academic achievement. There was also a comparison of school climate, which was measured by the National Study of School Evaluations (NSSE) Teacher Survey of Instructional and Organizational Effectiveness. This instrument was developed to measure the overall effectiveness of an educational organization. Norm referenced test scores were analyzed using descriptive and trend analysis. The descriptive statistics were used to establish whether a difference existed between observed means of the investigated schools as categorized by successful participation in the Georgia Pay for Performance Program. Responses to all items on the NSSE survey were compared and contrasted using descriptive statistics. Results of this study indicated a difference between the Pay for Performance and non-Pay for Performance schools in the area of academic achievement. Data also revealed a difference in school climate indicators measured by the NSSE teacher survey. The strongest differences were in areas dealing with goal setting and school improvement.