This document concerns performance appraisal as mandated by the North Carolina Legislature for all certified educational professionals. It notes that, in 1985, all newly certified professional education personnel, including school psychologists, came under the Initial Certification Program (ICP) requirements which issued newly certified school psychologists 2-year certificates and evaluted their performance at the end of 2 years to determine whether they possessed the skills of a practicing school psychologist. The need to establish competencies and functions of the school psychologist and to develop an instrument for performance appraisal are addressed. Content issues are discussed in the areas of an empirical basis for competencies, a framework for competencies, building competencies for the future, and identifying uniqueness. Process issues of how psychologists would be evaluated and who would conduct the evaluation are considered. Seven major functions for school psychologists are defined: (1) assessment and interpretation; (2) direct intervention for students; (3) consultation and training; (4) program development; (5) school psychology program implementation; (6) professional practice and development; and (7) communication and relationship skills. Methodological or procedural aspects of performance appraisal for school psychologists are addressed in the areas of formative versus summative aspects of performance appraisal, parameters of actual measurement of the school psychologist's performance, and implications for remaining formative and summative evaluation. The School Psychologist Performance Appraisal Instrument is appended. (NB)