A review of the literature shows that the use of teacher evaluation in public education is widespread. This seems paradoxical when one considers the amount of criticism levied at them by a various groups. The present study was designed in order to deal with the problems of validity and reliability of teacher evaluation instruments planned for the purpose of teachers' promotion or for awarding merit pay. Based upon a review of the literature and school inspectors' judgements, a teacher evaluation instrument including 25 items has been constructed. The instrument has been tested by five school inspectors and 180 school principals. Following their judgements and the factor analysis run upon the data, a face validity and a content validity of the developed instrument emerged. However, conclusions concerning the reliability of the instrument have to be treated with caution. The use of an instrument of this type is justified only for making preliminary decisions as to the eligibility of teachers for further consideration for promotion or for merit pay.