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Abstract Performance appraisals are a hot topic in companies of today’s business world. Should we use them, or should we not use them? What good do they actually do in regards to motivating the employee. Better yet, what harm can they cause? In writing this paper, I am going to present to you some of the pros and cons of a performance appraisal system. Do the positive characteristics outweigh the negative, and can we afford to venture in today's corporate business world without a performance appraisal system in place? Are performance appraisals an integral part of an organization’s very existence, or are they nothing more than an expensive and time-consuming burden that all business’ of today must put up with in order to function properly in the corporate world? According to Heathfield, “Second only to firing an employee, managers cite performance appraisals as the task they dislike the most” (2000, p. 1). Performance appraisals play a huge role in today’s organizations whether it is a Texaco service station or a multi-billion dollar corporation such as Microsoft. The question is however, are they effective? Do we get what we need from the