Parents United for Full Funding, a 600-member parents' lobbying group, said yesterday it supports the D. C. Board of Education's attempt in contract talks to tie teachers' salary increases more closely to their performance in the classroom and to lengthen the work day for teachers.

But at the same time, the parents' group said it wants greater salary increases for the teachers over the next two years than the board proposes to give, concluding that "teachers are grossly underpaid."

The group made its position known as the Washington Teachers Union and the school board entered the final days of mediation on a new three-year contract. The major points of dispute between the teachers and the school board are salary demands and proposals that would make teachers work eight-hour days instead of the current 6 1/2-hour days, and would add between 9 and 11 more working days to the school year.

If an agreement is not reached by Feb. 19, the contract will go to binding arbitration. Neither side would predict yesterday the likelihood of arbitration.

"It all depends on how long the school board wants to hold its untenable position," said Teachers Union President William H. Simons. This is the first year that negotiations have included salary issues, and talks were stalemated for seven months before the union called for a city mediator in December.

The current contract, signed in 1979 following a bitter 23-day strike, technically expired Jan. 2, but it remains in effect while both sides work on a new agreement.

"No job action is likely, but that option will never be ruled out by this union," Simons said.

The parents, who prepared their position paper with the help of experts from the National Institute of Education, said they support a school board proposal that would require teachers to receive a "better than satisfactory" evaluation from their school principals before they receive salary increases at two points in their careers.

Those two points arrive when they have reached their fifth year in the system and are going from a salary of $16,800 to $17,506; and in their ninth year when they are moving from a salary of $19,618 to $20,324.

Kenneth W. Nickoles, chief of labor relations for the school system, said the board "wants to ensure we're paying for good performance."

But Simons called the proposal "for the birds." He said the union wants to keep the current procedure whereby teachers need only a "satisfactory" rating from the principals to receive their salary increases.

In proposing a 7 1/2-hour day, the parents noted that D.C. teachers currently work six hours a day, including a half-hour for lunch, while teachers in Montgomery, Prince George's and Fairfax Counties work seven hours, exclusive of lunch.

With a new promotions policy in effect in the elementary schools, requiring teachers to keep more detailed records of each student's grades and progress, some teachers may find it necessary to take time away from the instruction of their students to update student files and meet with parents, the parents said.

A 7 1/2-hour work day, the parents argued, would allow teachers time for planning, parent conferences and record-keeping, while ensuring that students still receive a maximum of six hours of classroom instruction.

The school board is proposing that teachers work a full eight-hour day. But Simons said there is "no way" the union will accept either the parents' or school board's proposal for an extended day. The union also steadfastly opposes the addition of work days to the school calendar, he added.