An exploratory study examined how administrators (department heads/chairs) perceive faculty members, as well as themselves, in the performance appraisal interview. Subjects, 450 faculty members and 200 administrators at a midwestern university, answered an Appraisal Interview Questionnaire in which they rated administrator performance, content and methods in interviews; assessed faculty member role during interviews; ranked interview methods; and assessed faculty member performance during the interview. Results indicated that administrators were satisfied with the appraisal interview, whereas faculty members were dissatisfied with administrators' methods. Administrators had little formal training in interviewing, but the majority considered their evaluations of faculty members to be valid and reliable for determining merit pay. Using the "Tell and Sell" method (through which the supervisor acts as a judge and tries to persuade the employee that the evaluation is valid) and the "Management by Objectives" method to assess faculty, administrators had positive perceptions about the appraisal process, and rated faculty positively on their communication during the interview. Like the administrators, faculty members rated themselves positively on their performance during the interview. In contrast, however, faculty members regarded evaluations as unreliable and invalid when used as criteria for determining merit pay, and preferred the "Tell and Listen" method (in which the supervisor plays the role of judge but encourages disagreement to discover the true feelings of the employee) and the "Problem Solving" method (in which the supervisor does not judge but rather acts as a helper in employee development). (Tables of data and 27 references are appended.) (NKA)