Performance appraisal is a multi-step process of aligning employees’ work behavior with the strategy and goals of the organization. From the Statistical Report of Reserave Bank of India, it can be concluded that still there is a need to develop a performance appraisal system which can be universally applicable in banking sector and other organisations. Performance of employee is evaluated but it is rarely communicated. Organizations must make effective use of performance appraisal for identifying training needs and also as a basis for promotion. The other result shows that in most of the banks performance is not linked with the rewards which lowers the morale of employees and therefore efficiency and profitability of these banks is affected.

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Keywords: Performance Appraisal, Banking Sector, Training, Encouragement Rewards.