Most American universities and colleges require students to provide faculty evaluation at end of each academic term, as a way of measuring faculty teaching performance. Although some analysts think that this kind of evaluation does not necessarily provide a good measurement of teaching effectiveness, there is a growing agreement in the academic world about its reliability. This study attempts to find any strong statistical evidence supporting faculty evaluation by students as a measure of faculty teaching effectiveness. Emphasis will be on analyzing relationships between instructor ratings by students and corresponding students’ grades. Various statistical methods are applied to analyze a sample of real data and derive conclusions. Methods considered include multivariate statistical analysis, principal component analysis, Pearson's correlation coefficient, Spearman's and Kendall’s rank correlation coefficients, linear and logistic regression analysis.