A guide to understanding and improving faculty evaluation procedures at all types of colleges and universities is presented. The causes of today's crisis in higher education and survival strategies are reviewed, and the search for solvency is related to major changes in assessing faculty performance. The proliferation of court challenges to administrative decisions on promotion, tenure, retention, and the extension of civil rights legislation to faculty evaluation programs, are also examined. In addition to reviewing a 1983 study of policies, practices, and attitudes toward faculty evaluation at 615 public and private liberal arts colleges, comparisons are made to 1978 and 1973 studies of this topic. Key changes are illustrated by 31 tables and graphs. Commentaries of seven prominent educators on changing practices revealed by the 1983 study and the implications for higher education are provided, and their projections of faculty evaluation for the year 2000 are also offered. Finally, the steps for constructing successful faculty evaluation programs are detailed, and consideration is given to: faculty evaluations by students, colleagues, the teachers themselves; and evaluating the teacher's institutional and community service responsibilities. Faculty appraisal forms are included. (SW)