As I understand it, they are evaluated on how well their students do on standardized tests. Granted, a teacher can be stuck with uncooperative students who don't want to learn, but presumingly this happens to all teachers so she is graded relative to her peers.
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One thing that makes teachers different is tenure, where once a teacher has been employed a certain time it's almost impossible to fire them. They have no incentive to do a good job because their job is secure no matter how poorly they do it. This makes no sense.