The researcher states that performance appraisal is one of the most common platforms used by employers to determine whether their employees are sufficiently qualified for promotion. However, the contemporary work environment is changing with teamwork gradually replacing hierarchical management. Further, organizations are increasingly shifting their focus toward employee empowerment and participative leadership, as opposed to the traditional authoritative leadership style. In addition, companies are reducing managerial positions thus increasing workloads and making supervisors responsible for large groups of employees. This means that supervisors are no longer capable of observing employees and providing fair, precise, valid and inspiring performance evaluations. As a result, modern companies have no choice but to look for appraisal mechanisms that adopt these changes and, at the same time, support and promote employee development. Most organizations in the present business environment have resorted to using the 360-degree appraisal approach. This method is popular for its ability to provide workers with the information they need to change and align their abilities or talents with functions that meet company goals. However, this appraisal mechanism is not without faults. This research project was meant to analyze usage of a performance appraisal method in a company and to collect information that would aid in the system’s improvement in regard to accuracy, fairness, credibility, and objectivity. The company chosen for this research applies the 360-degree feedback method. The inception of this appraisal system can be linked to past satisfaction surveys, which were used to enhance morale and communication among workers. The system also has its foundation in employers’ desire to encourage employees in their efforts to set goals, as well as, the provision of feedback to motivate workers. At this time, performance reviews were usually conducted by supervisors who also provided participating employees with the relevant feedback. However, changes in the 21st century prompted many organizations to abandon the conventional supervisor-partisan appraisal method. For instance, there are no longer many managerial positions, meaning that administrators have more pressing concerns than supervising junior staff. Further, the employees participating in the review are supposed to interact with others in different organizations or departments, making it rather difficult for supervisors to monitor them effectively and provide credible feedback. The modern environment is also characterized by acute competition, which has made companies exert extra focus on customers as opposed to employees. Given the above changes, participants in modern performance reviews are subject to scrutiny by stakeholders other than employers. This is where the 360-degree appraisal mechanism comes into play.