The purpose of this research was to explore problemsrnand prospects of result based performance appraisalrnpractice. It focused on the general understanding ofrnemployeesrnabout performance appraisal, the feedbackrnpractice and its impact, the occurrence of appropriaterntraining, clarity of the criteria, fairness of the process,rnlevel of communication between employees, contributionrnof performance appraisal for employee’s motivation,rnsatisfaction,rnperformancernimprovementrnandrnorganisational efficiency and effectiveness. Descriptivernmethod has been chosen as a proper research method forrnthis study. Therndata collection was made throughrnquestionnairernandrninterviewrnofrnemployees’rninrnthernorganization of National Metrology Institute of Ethiopiarnusing qualitative and quantitative method of research.rnMajor findings of the research are interpreted andrnanalysedrninrncomparisonrnwithrnfindingsrnofrnexistingrnliteratures. The key findings of the research indicaternclarity of purposes, practice of feedback system, andrnattachmentrnofrnperformancernappraisalrnwithrnthernorganisational strategic priorities, creation of moderatelyrnmotivated and satisfied employees by applying fair andrnusefulrnperformancernappraisal,rnusingrnperformancernappraisal evaluation for administrative decision. Inrnaddition to these positive achievements of performancernappraisal practice in the institute the study alsorncapture some gaps like insufficient training about thernprocess before application, less performance in matchingrnof performance appraisal with employee’s expectation,rnwhichrnhavernnegativerninfluencernonrnproperrnimplementation of performance appraisal. Finally, thernstudy concludes that the institute can build successfulrnperformance appraisal system if the gaps mentioned arernproperly improved