The research based article has discussed about the significance of performance appraisal system at a feeder airline which belongs to public sector. The survey has been carried out to elicit the perceptions / opinions of the appraisal system implemented across the various functional departments. The overall findings of the study has resulted that the appraisal system was effective in realisation of the performance objectives that have been stated. It is the performance of each employee which in turn contributes to the overall development of the organizational performance. Keyword: appraisal system, feeder airline, functional departments, organizational performance etc.