This monograph offers practical suggestions on how to develop and implement an effective and legally viable system of teacher evaluation. Part 1, "The Legal Arena," discusses current trends in school employee litigation, suggesting that an effective evaluation process can be one of the greatest deterrents to successful employee first amendment cases, when used in conjunction with a carefully crafted documentation system. Part 2, "Formulating the Assessment or Evaluation System," provides guidelines for developing a legally sound evaluation system and policy. Topics discussed include (1) a statement of purpose; (2) repeal of prior policies and procedures; (3) procedural aspects of the policy and employee concerns; (4) personnel to be assessed; (5) personnel to do the assessing; (6) defining the areas to be assessed; (7) timelines for assessment and steps to be taken; (8) conducting the classroom observation and the evaluation itself; (9) explanation of ratings and instruments to be used; (10) remediation--growth improvement plan or directives; and (11) reassessment and consequences. A summary and conclusion follow, along with a 13-item bibliography and 9 appendixes providing a complete sample teacher evaluation system. (TE)