1 3 rd International Conference on Managing Human Resources at the Workplace, December 5-6, 2014 ISBN: 978-93-83302-01-7 Effectiveness of Performance Appraisal System in Select Public and Private Sector Banks – A Study Anees Sulthana Research Fellow Department of Business Management Osmania University Hyderabad aneessulthana@gmail.com P. Venkataiah Department of Business Management Osmania University Hyderabad profvenkat40@gmail.com Abstract In the current scenario of corporate world, performance appraisal is the corner stone of which can help in creating a fair and transparent work culture by linking remuneration with value of effort, generating information for employee growth, career planning and person-job fit. The crucial role of performance appraisal is undergoing challenges in the present corporate world. Performance appraisal frameworks in both the public and private sector banks is the essential issue of the present study, which examines how the public and private sector banks vary in terms of employee performance. Performance Appraisal System identifies the characteristics of best, moderate and poor workforces. It also useful in training needs analysis, promotion, demotion, transfer and incentive packages. The broad objective of study is to identify the factors of performance appraisal in select public and private sector banks, to know the congenial factors of performance appraisal system in public and private sector banks, to measure the effectiveness of performance appraisal system in study organizations and to make a comparative analysis of performance appraisal systems prevailing in select public and private sector banks. Four samples of 100 each were taken from 2 public and 2 private sector banks for the analysis of the current study. Data is collected through a structured questionnaire with a 5 pointed likert scale on performance appraisal from the identified respondents. Descriptive and inferential statistics are applied for drawing the statistical inferences out of the collected data. Statistically it revealed that Indian banks the performance appraisal system is not linked to performance of man on the job. It leaves much scope for the rater’s personal biases and suffers