A Dissertation Submitted in Partial Fulfillment of the Requirement for Award of the Degree of Master of Human Resource and Management (Msc.HRM) of Mzumbe UniversityThe study was carried out on assessment of the performance appraisal system on individual employee and organization effectiveness. The researcher used case design to collect data at Muhimbili University of Health and Allied Health Sciences (MUHAS). Two hundred –twenty five (225) respondents were selected to this study. The majority of respondents 91% responded to the study. To reach the objective of the study, the data were collected from 23 respondents from top management team through interview while 67from academic staff and 135 from administrative staff respondents who responded to the interview and questionnaires. The findings from the study reveal that employees were not participating well in performance appraisal making at MUHAS. Also, the study reveals that there was no power sharing at the organization. The study concludes that MUHAS management should create direct involvement of employees and empower them. The study recommends that establishment of employee’s participation in Performance Appraisal making will enhance harmony and good relationship between employer and individual employee. It also recommends that employees’ participatory training is prerequisite for successful performance appraisals for organization’s effectiveness.