The point of this exercise — and indication of perfect tune — is to produce a clean bullet hole (upper right tear) with three clean cuts, showing where vanes have passed through the paper. Keep in mind, there will be little or no cuts when shooting feather fletchings. Before you start you should carefully consult an arrow manufacturer's chart to assure you of the proper spine for all factors involved (draw length and weight and point weight).
A right-hand tear (lower-right tear) indicates an arrow that is too stiff, owns too little point weight, an arrow rest that is adjusted too close to the sight window of the riser, or that you aren't shooting enough draw weight. To solve the problem, choose an arrow with a lighter deflection/spine (400 instead of 340, for instance), cut that arrow longer, use a heavier point (125-grain instead of 100-grain, as an example), adjust the arrow rest away from the riser, or add draw weight by tightening the limb bolts — evenly, and only when possible.
A left-hand tear (lower-left tear) indicates an arrow that's not stiff enough (or too long), too much point weight, or an arrow rest adjusted too far away from the riser sight window. This situation is solved by shortening the arrow (but not so much a broadhead will contact the rest arms), choosing a lighter point (100 instead of 125, for instance), moving the rest arms closer to the riser, or decreasing draw weight by loosening the limb bolts evenly.
A high tear indicates that your nocking point or string loop is situated too high and the arrow is leaving the bow tail high. In this case, move it down in small increments until the arrow passes through the paper level. A low tear indicates just the opposite.
Sometimes you will observe a combination tear, like one that is high and right. Work on the elevation adjustment first before moving on to the windage correction, as the former is easier to accomplish than the latter.