It is bloody annoying for those excellent teachers who feel their work goes unrecognised. It is absolutely the case that even the best heads struggle to reward teachers as accurately and as well as they would like with the standard incremental pay scale.
Do we really think that by putting an extra £500 carrot in front of the lazy teachers that they are suddenly going to become outstanding? If they aren't already motivated by the children they teach, money isn't going to help. If they're so bad, then they should be fired. Simple.
Any measure needs to be valid, reliable and considered fair and accurate by the teachers themselves, or you'll create an unhappy atmosphere in the school that will drive teachers away. Let's look at the issues.
That's the weird thing about money, especially when dealing with people who genuinely want to change the world. Small amounts of money thrown at them won't motivate them and might even insult them.