Although performance appraisal is one of the most important functions of human resources management, it can not be said that the organizations have obtained the full benefit from performance appraisal system as they expected. Lack of enough investigation about employees’ perception toward the effectiveness of the performance appraisal system can be mentioned as one of the reasons. The perception of employees toward the effectiveness of performance appraisal system helps human resources employees and researchers to obtain the benefit expected from performance appraisal system. Therefore, the employees’ perception of the outcomes and detriments of an effective performance appraisal system were investigated in this research. According to the findings of the study, the perceptions of employees toward the performance appraisal system have an effect on their thoughts of their own appraisals. Besides, it was determined that women perceive the performance appraisal system as more effective than men and the employees who work as a manager have a more sensitive perception toward the detriments of performance appraisal systems than who do not. It is thought that, the findings of this research may be beneficial to both the researchers who study performance appraisal and human resources employees to evaluate the effectiveness of performance appraisal systems.