ESL students will make mistakes. Making mistakes is a natural, and necessary, part of learning a new language. And choosing just how frequently to correct msitakes is typically a new teacher’s first tactical decision. Do I make sure everyone says everything correctly all the time? The simple answer is "no". Progress will be slow, if at all; students will have little confidence in their ability; and the class will most certainly be dull beyond belief. Yes, what the students say will be correct, but the chances of them saying anything outside the classroom are slim. Why? They have no confidence and the teacher is not there to tell them they are correct. Additionally, any desire they have to speak will be beaten out of them because in the class, everything they say is "wrong".
So, should the teacher not correct anything, letting the students just talk and talk? If so, then what is the point of the teacher's being in front of the class? The teacher’s job is to teach or guide the students, and if no error correction happens, then why do students even need a teacher?
The best path is somewhere in the middle between these two extremes. Learning English is a long journey, one that takes years. Every mistake can't be fixed in an hour-long class. It is best for the teacher to keep that in mind when planning an error correction strategy. For beginning students, it can be good to do some heavy lifting, stop the class, and correct their grammar mistakes or pronunciation slips or incorrect word choice. However, once the class starts to have some proficiency, it is best to make corrections in a more subtle manner. This is where one's TESOL training comes into play.
Some teachers like to take notes during the class and correct mistakes anonymously at the end of class, perhaps the last 5-10 minutes. This kind of "delayed correction" can be effective, but students can forget if they were the ones who said that or not, and it’s easy to forget the correction on the way out the door. Another popular way is to repeat the mistake back to the student, but say it correctly. Student: “I go to my friend’s house yesterday night.” Teacher: “Oh, you went to your friend’s house last night?” This "echo correction" is a gentle reminder of the right thing to say. Or the teacher could say just “went” as a way of reminding the student of the correct verb tense, or simply say “not yesterday night, last night.” These last two techniques are more immediate, reminding students of what they should say, encouraging them to repeat what they said but correctly. I will not correct everything they say, and I do let many mistakes pass. This allows them to hear the correct way of saying something, gives them the chance to say it correctly, yet does little to interrupt the flow of the class. After all, the bottom line of any lesson is to ensure that students "produce". This is best done without the teacher interrupting to correct every little mistake.