Criterion-referenced systems are founded on the belief that instruction should be based on the needs of individual pupils. If pupils' needs are to guide instruction, the system must identify the skills pupils need to learn and the sequence for their introduction. Additionally, there must be a way to identify the skills a pupil needs and those he has mastered. In a very real sense, these components represent a systems management process. A second important aspect of a criterion system is the instructional guidance component that guides teachers in their day-to-day instructional interaction with pupils. Essentially, criterion programs should seek to define a body of content, organize the content into manageable segments for learning, establish performance objectives for learners, provide tests that measure learner progress toward meeting the objectives, provide teachers with a list of resources for teaching the content, and provide a record-keeping system that allows both the learner and the teacher to monitor objective attainment. (Author/IRT)