The continuous development improvement of human resource potential requires a successful performance system. Schermerhorn (1999, Pg. 250) defined Performance Management System as a system that ensures performance standards and objectives are set, that performance is regularly assessed for accomplishments and that actions are taken to improve performance potential in the future. The process of formally assessing someone’s work accomplishments and providing feedback is performance appraisal and it serves three basic purpose in maintenance of a quality workforce i.e.