Illinois Specialized Teacher Evaluation Programs (I-STEP), Incorporated, has developed a performance-based system for evaluating teachers. A review of the literature convinced I-STEP that evaluation programs are most useful if they are aimed at helping teachers improve their instructional effectiveness, and if they obtain evaluation data from many sources. The I-STEP method involves collecting information from students (who have extensive experience with teachers but no training in pedagogy), outside observers (with good understanding of teaching practice but little contact with the individual teachers' instruction methods), and the teachers themselves. All these observations must be cross-compared to develop reliable assessments of teachers' strengths and weaknesses. The instruments used by each group of observers is designed specifically for that group, and those used by the classroom observers are divided into six subtypes depending on the nature of the instructional situation being observed. Implementing the I-STEP program involves consultation among I-STEP representatives, teachers, and administrators; planning and scheduling; teacher orientation; the evaluation process itself; data analysis; reporting of results; and the provision of feedback to teachers and administrators for use in evaluation conferences and improvement efforts. (PGD)