Phong Shading

In Phong shading (1975 - Phong Biu-Tuong)(not to be confused with Phong's illumination model), the surface normal is linearly interpolated across polygonal facets, and the Illumination model is applied at every point.
A Phong shader assumes the same input as a Gouraud shader, which means that it expects a normal for every vertex. The illumination model is applied at every point on the surface being rendered, where the normal at each point is the result of linearly interpolating the vertex normals defined at each vertex of the triangle.
Phong shading will usually result in a very smooth appearance, however, evidence of the polygonal model can usually be seen along silhouettes.

In the Phong method, vector interpolation replaces intensity interpolation.
Graphic courtesy of Watt.