Abstract: Reforms in undergraduate education and teaching evaluation have continued to deepen across China. Meanwhile, in the practice of incentivizing undergraduate teaching at some institutions, a gap still exists between institutional expectations and actual teacher behaviors—what this paper refers to as the “incentive paradox”. Analysis shows that teaching incentive systems help strengthen quality awareness, standardize teaching processes, and support faculty development. However, in certain universities, during the translation of indicators and application of outcomes, problems such as goal substitution, information distortion, risk avoidance, resource-seeking behavior, and performance enhancement may emerge. The root causes lie in the imbalance between evaluation weights for research and teaching, unclear boundaries in indicator usage, and weakened recognition of the value of teaching among faculty. To enhance the effectiveness of institutional incentives, coordinated efforts should be made across cultural, institutional, and individual levels to reshape the academic ecology of teaching, implement the developmental orientation of evaluation, strengthen teachers’ motivation for teaching, and achieve the unity of standardized safeguards, professional judgment, and educational goals.