Abstarct: This qualitative study employs a grounded theory methodology (Corbin & Strauss, 1990) to investigate the techniques and implications of teaching quality evaluation systems within private language schools in Iran. Data were collected through iterative theoretical sampling, comprising focus groups with 32 English language teachers and academic managers, analysis of institutional documents (e.g., evaluation checklists, policy manuals), and field notes. The data analysis followed the Corbin and Strauss (1990) approach, proceeding through the stages of open, axial, and selective coding to develop a substantive theory grounded in the empirical data. The findings reveal that schools predominantly rely on quantifiable techniques such as standardized student evaluations of teaching (SETs), checklist-baxsed observations, and analysis of student test scores. These techniques are largely driven by external market pressures, the need for operational control in a context of high teacher turnover, and a pervasive desire to mitigate legal and reputational risk. A central finding is the significant perception gap between teachers and managers; teachers largely view the system as a “popularity contest” that rewards likability over pedagogical skill, while managers defend it as a necessary tool for ensuring customer satisfaction and institutional consistency. The consequences of these systems include increased teacher stress, strategic compliance (e.g., “teaching to the test”), erosion of professional autonomy, and the promotion of superficial learning outcomes. Through axial and selective coding, the analysis culminated in the core category of “Defensive Bureaucratization.” This theory posits that evaluation systems are implemented primarily as organizational defense mechanisms against market and reputational risks, rather than as genuine tools for pedagogical improvement. The study concludes that a fundamental shift is needed to break this cycle, recommending a rebalancing of evaluation systems to restore teacher agency, integrate qualitative and long-term competency measures, and separate compliance metrics from developmental evaluations. This research contributes a critical, context-specific theoretical model to the literature on educational evaluation and quality assurance.