North Carolina Gov. Pat McCrory, a Republican, signed a budget bill Friday that eliminates teacher tenure and—in a rare move—gets rid of the automatic pay increase teachers receive for earning a master's degree.

The legislation targets a compensation mechanism that is common in the U.S., where teachers receive automatic pay increases for years of service and advanced degrees. Some research has suggested those advanced degrees don't lead to improved teaching.

Although a few other states have talked about doing away with the automatic pay increase for advanced degrees, experts say North Carolina is believed to be the first state to do so.

The budget bill—which drew hundreds of teachers to the Capitol in protest earlier this week—also eliminates tenure for elementary and high-school teachers and freezes teacher salaries for the fifth time in six years.

It comes as states and districts across the country are revamping teacher evaluations, salaries and job security, and linking them more closely to student performance. These changes have been propelled, in part, by the Obama administration and GOP governors.