The literature review has been described about the history, definition, purpose and process of performance appraisal system applied in organization. Performance appraisal system is an essential tool used in the human resources department to integrate both administration in decision making and development of employees' work performance in the workplace. It can have a great impact on employee satisfaction with the appraisal system practiced in the organization, which in turn affects how the employee feels about their organization. So, the researcher found that employee has an important role in this system. This review also defined employee satisfaction and its relationship with the performance appraisal system in an organization. The outcome of the performance appraisal system will give mutual benefits to the employee and the organization. The researcher was building a theoretical framework describing details about the dependent variables, i.e., the performance appraisal system that depends on independent variables, i.e., employee satisfaction. There are three independent variables that need to be evaluated: providing training to the evaluator, requesting feedback from employees, and the motivation and reward system. The researcher assumes that these dependent variables will improve employee satisfaction when evaluating the performance appraisal system towards them in an organization. . This system was not very useful at that time, but now it represented almost everything in the field of modern human resource management. How dis......middle of paper......praise. The feedback that the supervisor might provide is of a high or low level that reflects their job performance in the organization. The employee's high self-esteem perceived the feedback as more accurate and their perceptions were influenced by the sequence. Apparently, the higher the employee's self-esteem, the more they will avoid or ignore negative aspects, and this may increase their satisfaction with job performance. Feedback Seeking These feedback-seeking behaviors are believed to be linked to motivations to gain competence and to protect and increase an employee's self-esteem. An individual should accept and desire to respond to feedback more when feedback is actively sought. Perhaps, an employee with a higher propensity for feedback-seeking behavior also has more favorable attitudes towards the performance appraisal system in the organization..