Performance appraisal is a systematic process used by organizations to evaluate the performance, efficiency, skills, and contribution of employees toward organizational goals. It is one of the most important functions of human resource management because it helps organizations identify employee strengths and weaknesses, improve productivity, and ensure employee development. Performance appraisal provides feedback regarding employee performance and helps management make decisions related to promotions, salary increments, training, rewards, and career development. In modern organizations, performance appraisal is not limited to measuring employee output alone. It also focuses on employee behavior, teamwork, communication, innovation, and commitment to organizational objectives. An effective appraisal system motivates employees to perform better and creates a healthy relationship between management and employees. Employees who receive proper recognition and feedback are generally more satisfied and committed to their work.