This paper discusses the principles of an effective faculty evaluation system that are repeatedly recommended in the literature. These principles include the following: (1) clarify institutional goals; (2) decide on the purposes of the data to be collected; (3) use pilot programs when appropriate; (4) significantly involve participants in the development of the system; (5) foster open communication about the system; (6) obtain support from high-level administrators; (7) ensure that the system is flexible and legal; (8) define major and minor faculty responsibilities as well as the sources of data used to evaluate each subresponsibility at the beginning of the evaluation period; (9) use multiple data sources; (10) ensure that the data are technically acceptable; (11) define the criteria for each subresponsibility; (12) train the evaluators to evaluate and the supervisors to give feedback; (13) maintain confidentiality; (14) reward effective performance; (15) combine development with evaluation; and (16) review the system periodically. (Contains 30 references.) (CK)