Performance appraisal plays a crucial role in shaping employee behaviour and improving organizational effectiveness. Among the modern appraisal techniques, the 360-degree performance appraisal system has gained widespread acceptance due to its comprehensive and participative nature. This research paper examines the impact of 360-degree performance appraisal on employee behaviour, focusing on aspects such as motivation, communication, teamwork, accountability, and self-development. The study adopts a descriptive research design based on secondary data collected from academic journals, books, and industry reports. The findings indicate that 360-degree appraisal systems positively influence employee behaviour by enhancing self-awareness, encouraging constructive feedback, and promoting a culture of transparency. However, certain limitations such as bias, lack of trust, and improper implementation may hinder its effectiveness. The paper concludes that when implemented properly, 360-degree appraisal systems can significantly contribute to behavioural transformation and organizational success.