This paper presents the contextual background of a doctoral study that investigates the process of assessment of teacher competence based on supervisors' judgment of the pre-service teachers' classroom performance. The study approaches classroom observation as a process conducted under time constraint. As such it is regarded as a process that reflects only restricted aspects of the teacher's competence. The variables in this study are identified and linked by a model of the decision-making process following models of cognitive process in performance appraisal. The variables are within the scope of competence, criteria for assessment, the supervisors' perceptions of the teacher appraisal, supervisor's observation of classroom performance and the determinants of the judgment process. The subjects in this study are supervisors of pre-service teachers in an institute of education in Hong Kong. The organizational and contextual aspects are considered as important determinants in the process of supervisors' judgment of the pre-service teachers' classroom performance. The paper presents a brief introduction to the institution, a discussion on its demands on teacher practicum, practice and procedure in classroom observation and a report on the preliminary findings of supervisor's views on classroom observation.[Copyright of Australian Association for Research in Education (AARE) at http://www.aare.edu.au]