Arguing that the term "competency based education" (CBE) has been erroneously applied to minimum competency programs, this booklet contends that the problems addressed by the minimum competency movement can be, but probably will not be, resolved by the implementation of true competency based education (CBE). The first section of the booklet defines competencies and extrapolates some implications for curriculum and assessment. The second section, comprising the bulk of the booklet, delineates the substantial revolution that competency based education entails: a shift from time to outcomes based organization and a shift from teacher referenced to criterion referenced standards. It goes on to suggest that not only the magnitude of these changes, but also the lack of a consensus about appropriate outcomes will probably prevent widespread implementation of CBE. It then adduces the deficiencies both of teacher referenced standards and of the norm referenced standards introduced to correct them and presents two alternative systems that could be criterion referenced. The booklet (1) argues that the accountability movement does not address the causes of illiteracy, which inhere in the system of instruction; (2) outlines the reforms that would have to ensue if the problem were instead conceived as effectiveness; (3) indicates how CBE would resolve the problem; and (4) stipulates measures that would ensure its flexibility. (Author)