This study examines the effectiveness of the performance appraisal system at Femtosoft Technologies, Chennai. The research focuses on employee satisfaction, teamwork, promotion, and organizational growth. Data was collected from 106 employees through questionnaires. The findings reveal that the appraisal system is mainly based on employee output, behaviour, and goal achievement. Most employees believe that the system helps identify strengths and weaknesses and supports career development. Statistical tools such as percentage analysis, correlation, and regression were used. The study found a strong positive relationship between performance appraisal and employee performance. However, moderate satisfaction levels and conflicts during appraisal highlight the need for better transparency and feedback systems. The study concludes that an effective appraisal system improves employee motivation, teamwork, and organizational performance.