The main object of performance appraisal is to get insight of the business and critically analyze and evaluate its operational efficiency in various areas of business activities. Performance appraisal aims at assessing the efficiency of the business in achieving its targets and measuring the effectiveness of it in the optimum use of human, financial and resources available to the business. In case of any lack of efficiency, performance appraisal points out the areas where an improvement is needed. It also suggests the measures to improve the efficiency. On the other hand, where the efficiency and effectiveness are satisfactory, the performance appraisal indicates the ways to further improve it.