The purpose of this study was to provide basic information for improving the current Teacher Performance Evaluation System by investigating and analyzing elementary school teachers` understanding and opinions about it. The following questions were asked to achieve this purpose: (1) How do elementary school teachers interpret the link between the current Performance Evaluation System and teacher`s teaching competence development? (2) What are their opinions about teaching competence development and instructional supervision? A self-made questionnaire was used to explore the questions. The subjects were 431 elementary school teachers chosen by means of non-proportional stratified sampling from twenty schools in Pusan. It was concluded that the teachers wanted the teacher performance evaluation system to play a role as a formative evaluation, a way of instructional supervision to get more information relevant to professional development, and the purpose and function of the teacher performance evaluation system should be reconsidered in terms of teaching and teacher development.