The performance appraisal system is an essential element of effective human resource management. It helps organizations measure employee contributions, provide feedback, and align individual efforts with organizational goals. This study examines the performance appraisal system at Narsi Trading Company, Suratgarh, focusing on awareness, frequency, criteria, training needs, and challenges encountered during the process. Using a descriptive research design, data was collected from 50 employees through structured questionnaires. The findings indicate high awareness and overall satisfaction with the appraisal system, although issues such as bias, inconsistency, and conflict were reported. The study suggests improvements for enhancing transparency, fairness, and effectiveness in the appraisal process.