Merit Pay

After reading some of the Teaching in Maine blog tonight I was reflecting upon merit pay.  There were several articles in there saying that although there needs to be more research done, merit pay did not bring about higher test scores.  This got me thinking about the current situation at our school where we are beginning NECAPs this week (due to recent NWEA testing we wanted to give kids a break before they had to take another test).  We are on year 2 of our CIPs plan and the principal keeps saying he really wants us to do our best to get off of CIPs.  Of course, it is not as though we have not been trying to.  He mentioned there being some sort of incentive for teachers whose students do well but wants to make sure that he does not pit people against each other.  To me, this is a horrible idea.  We all work hard and who is not trying to help our students learn more?  I do not want to become a teacher who only teaches to the test and that is what the push of the nation feels like right now with merit pay and Race to the Top.  What I am wondering if the research shows merit pay does not make a difference why are we talking of going in that direction?  Why promote competition in the school instead of collaboration?