Performance Appraisal has been considered as the most significant and indispensable tool for any organization, for the information it provides is highly useful in making decisions regarding various personnel aspects such as promotion and merit increases. Performance measures also link information gathering and decision making processes which provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting, selection, training and compensation. This research concentrates on examining the effect of the performance appraisal on an individual as well as on the organizations. The data used for the study is primary data collected through the help of questionnaire filled by the samples. The data was evaluated with the help of statistical tools. The findings of the research show that there is a noticeable effect of the performance appraisal on the organization as well as on the Individual.