In Tennessee, varied data-gathering devices have been employed in an attempt to determine whether an educator is qualified for a given level on the state's career ladder program and, thereby, should attain the meaningful financial benefits linked to that status. In its first year of operation, the Tennessee program employed several domains of competence, e.g., classroom management, and established per-domain performance standards which could be attained as consequence of examinees' performances on varied measures. The stages in the development of these standards are described, as well as the rationale underlying the standard-setting process. Information on results of the standards and changes made in them after the first year are included. Guidelines for those entrusted with this responsibility are provided. (Author)