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Achievement can be, and often is, measured by means of observation and professional judgment. This form of measurement is called performance assessment. Developers of large-scale assessments of communication skills often rely on performance assessments in which carefully devised exercises elicit performance that is observed and judged by trained raters. Teachers also rely heavily on day-to-day observation and judgment. Like other tests, quality performance assessment must be carefully planned and developed to conform to specific rules of test design. This module presents and illustrates those rules in the form of a step-by-step strategy for designing such assessments, through the specification of (a) reason(s) for assessment, (b) type of performance to be evaluated, (c) exercises that will elicit performance, and (d) systematic rating procedures. General guidelines are presented for maximizing the reliability, validity, and economy of performance assessments.