The management principles set forth in this handbook encourage broad public and employee involvement. The first of three sections, "Management in Education," looks at the current state of the art, the potential benefits of sound management, and what school boards can do to encourage development of a true management process for their districts. The second, "Elements of Management," offers both basic principles and specific examples of what makes for good management. Topics are as follows: getting organized to manage, building a management team, planning, gathering information for decision-making, setting performance appraisal in motion, selecting and developing teachers, paying for performance, and improving public and employee relations. The third, "School Boards on the Job," examines some practical realities that make schools different from other organizations, the nature of school boards, and the role of the superintendent. New to this edition is an appendix of leadership tools consisting of short articles produced by the staff of the Illinois Association of School Boards that concern the board-superintendent relationship, a value system for schools, delegation and decision making, and monitoring and asessing performance (accountability). (MLF)