A performance appraisal system is a structured process used by organizations to evaluate and assess employee performance over a specific period. It helps managers provide constructive feedback, recognize achievements, and identify areas for improvement. A well-designed appraisal system enhances employee motivation, aligns individual goals with company objectives, and fosters professional growth. Modern appraisal systems incorporate various evaluation methods, such as self-assessments, peer reviews, and manager assessments, to ensure fairness and accuracy. By leveraging technology, companies can streamline the appraisal process, making it more efficient and transparent. An effective system also aids in career development, succession planning, and compensation decisions, ultimately contributing to organizational success.