One of the benefits of performance based assessment is its allowance for the teacher to gather information about how the student understands and applies knowledge. In this Digest, the basic steps a teacher should take to plan and execute effective performance-based assessment are outlined. Coverage includes the steps of planning and executing either formal or informal performance based assessments, namely: defining the purpose of the assessment; choosing the activity; defining the performance criteria; creating performance rubrics, or rating systems by which to determine students' proficiency for a given concept or skill; and, assessing the performance, including using tools by which to deliver feedback to the student. (Contains eight references.) (LMD).