THIS FORM OF EVALUATIVE RESEARCH IS USEFUL AS A DATA-GATHERING STRATEGY BECAUSE IT PERMITS MORE OR LESS CONTINUOUS OBSERVATION OF A PROGRAM'S STAFF AND/OR SERVICE RECIPIENTS WHILE THE PROGRAM IS IN OPERATION. THE AUTHORS ALLEGE THAT PARTICIPANT-OBSERVATION CAN BE MOST EFFICIENT WHEN COMBINED WITH CASE STUDIES, PRE- AND POST-TEST STUDIES, ANALYSIS OF STATISTICAL DATA, DOCUMENT ANALYSIS, AND SOME INTERVIEWING. THEY BELIEVE ITS POTENTIAL WARRANTS ITS INCLUSION IN THE EVALUATOR'S BATTERY OF ALTERNATIVE TECHNIQUES. (AUTHOR ABSTRACT)...KAP