The New Zealand Initiative has renewed calls for performance-based pay for school teachers.

A report by the right-wing think tank said a system in Washington DC works particularly well.

LISTEN ABOVE: Martine Udahemuka of the NZ Initiative talks to Mike Hosking

Researcher and report author Martine Udahemuka told Mike Hosking teachers there have to show they have met the expectations of good classroom practice.

She said teachers are evaluated against a multiple number of performance indicators including "student scores and student surveys".

Teachers who are not up to scratch can get tailored professional development.

"Telling teachers that they do stand to gain a good reward if they do maintain their performance, they do find that they improve their performance and student performance as well."