Basic questions concerning the purposes and functions of faculty evaluation in higher education are considered, along with background of the practice. It is contended that the purpose of faculty evaluation ought to be the improvement of instruction, and that the administrative uses of faculty evaluation for decisions of promotion, tenure, and salary increases should be secondary. Additional suggestions are as follows: faculty evaluation should focus on the teaching performance and not on the faculty member's scholarly reputation or productivity; faculty evaluation should be the responsibility of those administratively responsible for faculty performance; evaluation by students and colleagues has severe limitations if evaluation is to serve the improvement of instruction; evaluations should be conducted in a systematic, objective, valid, and fair manner; the results of faculty evaluation should be specified in advance and be acceptable to the faculty being evaluated; faculty evaluation must be tied to the institution's incentive-and-reward system; and evaluation should be supported by means of faculty development in the form of instructional resources that facilitate classroom instruction. Ethical and legal implications of faculty evaluation are also considered. (SW)