A perennial problem — performance evaluation — yields to a dependable problem solving approach. As the result of a systems analysis approach, we were able to: (a) Identify the purpose of performance evaluation: (b) Specify the value of performance evaluation: (c) List a set of specific characteristics which must be true of a performance evaluation system if it is to work well; and (d) Design an illustrative performance evaluation system which meets those criteria, and which works! The illustrative performance evaluation system is now available for use.