Performance Appraisals is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development. It began as an attempt to rationally correlate rewards and outcomes. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. Performance Appraisals also called annual reviews, evaluate an employee’s skills, achievements and growth, or lack thereof. Companies use performance appraisals to give employees big-picture feedback on their work and to justify pay increases and bonuses, as well as termination decisions.