The "advanced classroom expertise teacher allowance" was agreed to by the ministry, but was capped at 800 eligible teachers.
By 2015, 800 teachers across 2000 primary and intermediate schools will be paid an allowance of $5000 a year - worth $4 million.
The allowances will be contestable - if a teacher stops meeting the criteria or leaves the school it will stop.
The union would ask for more allowance in the next pay negotiations.
NZEI's president Judith Nowotarski confirmed the new bonus scheme was the union's idea and she could see how it looked like the start of performance pay in the education sector in New Zealand. "It's difficult because there's a number on it.
"I think it could look like performance pay if you don't take into consideration the development behind it and its intent."
She also confirmed new and entry-level teachers could take a cut, receiving lower pay scale increases.
"In negotiations compromises have to occur."
Teachers on the primary and intermediate entry-level pay rates (scales 1 to 7) received on average a 1.2 per cent pay increase in the latest settlement.
Mrs Nowotarski said the type of teachers eligible for the allowance would be on scale 8 of the collective agreement, earning $57,306 and be experts in the classroom.
Teachers on the highest steps could apply for a $5000 allowance and in addition would get up to a 3 per cent pay increase.
Mrs Nowotarski said most primary and intermediate teachers were on the higher levels of the collective agreement pay scale. She believed the union would not lose members over the perceived introduction of performance pay.
She said the union entered a long-term work programme with the ministry to work on improving career pathways for teachers in 2004.
A staff member at NZEI said its members would not see it as performance pay because teachers' achievement wouldn't be based on raw National Standards data.
Performance pay not always a success: union
Workers say they would put in the hard yards if their pay was linked to performance, but at least one union says money is not a magic bullet for higher productivity.
A global survey, which includes the view of 3500 New Zealand workers, has found almost half who are not on performance-based pay believe they would perform better if their earnings were linked to performance or productivity.
The Kelly Global Workforce Index questioned more than 120,000 employees from 31 different countries.
According to the survey, New Zealand has one of the lowest levels of performance-based pay in the Asia Pacific region.
Public Service Association national secretary Brenda Pilott said performance pay was used in local and central government during the late 1980s and 90s, and didn't work then. "It was presented as a way to reward effort and lift performance. What was not made explicit was that it was a way to contain salary costs and circumvent the collective bargaining process," she said. "We don't believe performance pay leads to improved performance - especially in the public sector - because . . . work is not profit-driven or influenced by things such as sales margins."
