In this paper the author investigates the function of student evaluation in relation to the educational process. He concludes that traditional approaches are inadequate because they view evaluation as either a static measure of information comprehension or as a coercive tool. The author, instead of viewing education as static, linear communication, suggests that education is a transactional process between professor and student. Evaluation consequently would involve assessing the students ability to decode the professor's message and encode new messages, rather than simply measuring information comprehension. Instead of underestimating the student and using evaluation as a coercive or motivational tool, the author proposes that students possess self-direction and self-control and are capable of setting their own educational objectives and assessing their progress. The author describes several industrial appraisal systems which have served as a basis for developing alternative methods of student evaluation. He reports the results of his actual applications in the college classroom. (LG)