This paper reports on findings from a broader piece of research aimed at investigating the ways in which head teachers experience a new teacher evaluation policy in Portugal, particularly in regard to the challenges and perceived effects of the policy on school and on teacher development. Data were collected through a questionnaire with open and closed-ended questions. In total, 134 head teachers participated in the study. Findings suggest a number of tensions and problems, most of which are related to the key features of the model of teacher evaluation itself. Others issues pertain to the lack of recognition of the appraisers and to the emergence of tensions amongst staff leading to the deterioration of the school climate. Persisting challenges to policy implementation, perceived effects on teachers and schools as well as the dilemmas of head teachers are analysed. The article concludes with the discussion of ways forward.