There is now a widely held view that the most effective strategy for improving countries’ educational performances is to improve the day-to-day work of schools. This view follows several decades of significant increases in government expenditure on school education in developed countries, often with little or no accompanying evidence of improvements in the quality or equity of educational provision. A number of countries have introduced incentives – both rewards and sanctions – in an attempt to ‘drive’ improvements in the work of schools. Many of these incentive schemes have followed the model adopted in business of specifying and measuring desired outcomes, holding employees accountable for delivering those outcomes through a system of rewards and/or sanctions, and leaving it to employees to decide on the best strategies to maximise the desired results. Two decades of experience in the implementation of incentive schemes of this kind in the United States were reviewed recently. The review committee concluded that the benefits of incentive programs that hold schools accountable for student outcomes had been ‘quite small’ and that the research evidence on whether such schemes are capable of producing meaningful increases in student achievement was ‘not encouraging’. Equally concerning was the committee’s finding that incentive schemes sometimes distort the work of schools. At a fundamental level, the theory of action underpinning incentive schemes of this kind is now being questioned. At the same time, there is growing questioning of the appropriateness of the business model adopted by outcomes-based incentive schemes. This paper argues for the use of ‘practice-based’ measures of school improvement to complement ‘outcomes-based’ measures. Given that the ultimate purpose of rewards for school improvement is to improve practices and processes in schools, it seems logical to use evidence of improved practices and processes in making judgements about school improvement. This discussion paper uses judgements made as part of one Australian education system’s school review processes to explore the feasibility of developing ‘practice-based’ measures of school performance and improvement. During 2010, each of the 1257 schools in this system was evaluated on eight different aspects of school practice. For each aspect, practices were judged as Low, Medium, High or Outstanding. Preliminary analyses suggest that useful practice-based measures could be constructed from judgements of this kind