Appraisal is the evaluation of worth, quality or merit. In the organization context, performance appraisal is a systematic evaluation of personnel by superiors or others familiar with their performance. Performance appraisal is sometimes also described as merit rating in which one individual is ranked as better or worse in comparison to others. The basic purpose in this merit rating is to ascertain an employee's eligibility for promotion. However, performance appraisal is more comprehensive term for such activities because its use extends beyond ascertaining eligibility for promotion. Such activities may be training and development salary increase transfer discharge, etc. besides promotion. Performance appraisal is a systematic and objective way of judging the relative worth or ability of an employee in performing his job. It emphasizes on two aspects: systematic and objective. The appraisal is systematic when it evaluates all performances in the same manner utilizing the same approaches so that appraisal of different persons is comparable. Such an appraisal is taken periodically according to plan: it is not left to chance. Thus both raters and ratees know the system of performance appraisal and its timing. Appraisal has objectivity also. Its essential feature is that it attempts at accurate measurement by trying to eliminate human biases and prejudices. Performance appraisals have become one of the most avoided experiences in organizational life. Supervisors do not like to give them and employees do not like to receive them. But, in I.T. organizations performance accountabilities must be described and documented in performance appraisals to satisfy all customers and regulatory bodies. The problem was that teaching all supervisors how to conduct effective performance appraisals was perceived as one way to teach the organization how to document and encourage accountabilities for the effective management of its human resources and for satisfaction of I.T. Companies requirements. This book attempts to study the performance appraisal system of top IT companies TCS and WIPRO. The process of rating performance of the employees of both organizations are covered. The impact of appraisal results on the effectiveness of employee's performance are detailed. The discrepancies in appraisal system and need for improvement in the appraisal system have also been discussed.