Human resources are among the fundamental resources available to anyrnorganization. Performance appraisal is part of human resource management which arnformal system of periodic review and evaluation of an individual’s (employees) jobrnperformance. Performance Appraisal (PA) helps in measuring and evaluatingrnperformance of the employees in an organization. PA serves a two-fold objective. Onrnone hand, it helps in identifying skill gaps present in the employees. On the otherrnhand, it recognizes meritorious employees on the basis of their work and helps torndesign an effective reward system for organizations.rnThe paper examines methods, process and the responsibilities of PA and explores thernrelationship between PA and its purpose in the organization. The writer usesrnquestionnaire and interview to collect the necessary data. The data gathered has beenrnanalyzed using the various statistical methods like tables, graphs, percentages.rnEmployees are evaluated by themselves, their immediate supervisor, next in-linernsupervisor, review committee and finally it is approved by senior managers. Therncompany’s major problems identified from the data collected are on frequency andrntiming of evaluation, lack of knowledge about the purpose and objective of evaluationrnand absence of training and discussion about the evaluation method are the majorrnproblems identified. Based on the problems recommendations are suggested.