Employees are important assets to any organisation. So, it becomes important for the organisation to understand and motivate the employees. In spite of all the motivations and support, the employee may not perform up to the expectations of the organisations. At such times it becomes more important for the organisations to understand the reasons of failure on the part of the employee. Such failure can be measured by using the Performance Appraisal System.When performance appraisal is conducted in an organization, an individual experiences various impacts like, behavioural and emotional.