The study focuses on the effectiveness of performance appraisal system for employees at NCBH Ltd Chennai. The researcher adopted descriptive research design and used Simple random Sampling method to choose the respondents. The main objective of the study is effectiveness of the existing performance appraisal system. The secondary objectives of this study are the ways and means to improve the effectiveness of the existing appraisal system. This study has been compiled with the help of primary data and secondary data. The main source of data collection is from the employees in the company as a primary data and from the texts and journals on the subject as a secondary data. Questionnaire Method was used for collecting the data from the respondents. ‘Performance appraisal’ has been identified as one of the most complex of management activities. It is often difficult and emotion laden process. Performance appraisal has become a part of organizational life. Every organization has some kind of evaluating the performance of its personnel. The integration of performance appraisal systems with other human resource management systems for the purpose of aligning the employees’ work behaviors and results with the organization’s goals Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development. This appraisal system is the heart of any working pattern to better the organization, employer and the employee. Key Words: Training, Needs Identification, Executives and Appraisal System