This paper reviews literature on teacher effectiveness and evaluation. In order for teacher evaluation to be effective in terms of improving teacher performance, it has to be formative. Evaluations also can contribute to the improvement of the performance of the school overall. Teacher evaluation also has effects on the environment outside the school organization, such as the community of parents. Many problems are associated with teacher evaluation, whether by principals, students, or teacher peers. The use of student achievement data for teacher evaluation has also been a source of debate in teacher evaluation literature. To reduce many of the disadvantages associated with evaluation approaches, a combination of methods should be used to assess teacher performance. In addition, teacher evaluations should be performed frequently to capture a realistic and representative picture of each teacher. (Contains 42 references.) (SLD)