A well-conceived system of performance appraisal can indicate the conditions and circumstances motivating individual faculty members to improve their teaching. The performance appraisal system must be sensitive to the different ways in which faculty members fulfill their professional goals of teaching, research, and service. The system needs to take into account the distinctive instructional approaches of various academic disciplines. An individualized portfolio system can identify the quality and quantity of teaching and research that each discipline considers appropriate and valuable, and can eliminate the inequities of standardized rating scales. Such a system can promote the goal of continuous faculty growth and development, can help individuals and departments set both long-range and short-range goals for research as well as teaching and student learning, and can avoid the problems occurring when students evaluate teaching performance. A suggested faculty portfolio plan contains: (1) a collection of materials demonstrating what the faculty member has been doing and has accomplished; (2) a plan outlining the faculty member's goals and objectives; (3) a description of support needed to reach goals; and (4) a description of the evidence that will demonstrate that those goals have been reached. Five further readings on performance appraisal are listed. (JDD)