NURSE EDUCATORS HAVE been responsible for evaluating and grading students for many years. To those in the educational field, evaluation is an essential part of the learning process. A grade is given to the student, but the main purpose is to promote the students' growth and development. Evaluation counseling may help a student improve her performance or to discourage her. One of the purposes of evaluation is to provide evidence to show the progress of the student toward the goals set up in the curriculum. In a school of nursing, two principal elements of a student's progress in a nursing course are evaluated. One of these is the knowledge the student has acquired in a theory course as shown by written examinations. The other is a concurrent clinical practice course in which the student demonstrates skill in applying her knowledge to the care of patients. A grade is based upon multiple appraisals of a student's behavior during clinical practice. The members of the medical-surgical faculty at the University of Colorado School of Nursing were dissatisfied with their methods of evaluating the clinical performance of students. For some time the faculty had been practicing a cooperative type of evaluation. The student was given a written form and encouraged to analyze her own performance prior to a meeting with her teacher. Periodically, student-teacher conferences were held concerning the student's progress toward the attainment of the objectives of the course. Following a final discussion, the teacher wrote a narrative evaluation report or used a checklist. The grade was assigned in relation to the student's performance with that of her class. No behavioral criteria were stated for establishing a grade for the average student or for those who were above or below average. The new evaluation study was undertaken for several reasons. The medical-surgical faculty felt that the evaluation procedures were too subjective. Every year new teachers joined the group and had many questions about the forms and the procedure in use. Students reported that they felt there were wide differences in evaluation techniques among teachers. After spending some time reviewing the forms, the educators realized that the primary problem was not in the forms, but in a need for all to have a common understanding of evaluation itself. In order to have a better understanding of the process of evaluation, its purposes and its functions, we decided to undertake this study.