This study is mainly related in analyzing the factors determining the successful implementation of the performance appraisal system. As ITES industries employ nearly 4.4 million which almost accounts to 8% of India’s GDP, this study was conducted for the employees in MNC. The performance appraisal serves as a basis of making most important strategies. Henceforth, it is highly critical for the management to apprehend the overall performance of the employees so that they contribute effectively towards the organizational development. This study was the descriptive study that examined the factors determining the successful implementation of performance appraisal. The demographic profile of the employees like gender, age, educational level, work experience, nature of job, residential area were also analyzed for 678 employees in MNC. An exploratory factor analysis was used to identify the factors that play a major role in the successful implementation of the performance appraisal. The factors identified were named as preparation, involvement and accomplishment.