The book by Jerry Muller will be out shortly. It makes a strong case against the over-use of quantitative measures to fix compensation. Education is one example.
If you believe the null hypothesis, then compensating teachers based on outcomes only introduces randomness into their pay.
Meanwhile, without referring to the book, in talking about health care and education, Megan McArdle writes,
So when we measure outputs, we are getting at best a very distorted picture of the value of the services provided. Modern industrial management is simply not designed for this sort of situation. If you feed human inputs into a machine system, you are quite likely to grind up the humans in the process.
Read the whole thing.