Performance appraisal is a process of creating a work environment or setting in which people are enabled to perform to best of their abilities performance appraisals is an ongoing process where the manager / superiors and employee work together to plan, monitor and review an employees work objectives or goals and overall contribution to the organization. Performance appraisal system operates in which an individual manager regularly, annually records performance and developments in top down process. It can be argued that perceived defects of appraisal system led to development of more sound concepts of performance appraisal. Nevertheless organization with opportunity to reflect on past performance as basis for making development and improvement plans and performances and development review meeting provides this chance. The provision of challenging assignments and regular performance feedback are included in effective performance management system.