ABSTRACT This Researcher is the output of the way in which the assessment of the impact of performance appraisal could make contribution to organization growth. The study was carried out at National Audits office (NAO) Nairobi headquarter the start of 2009(January to December).the study was conducted so as to verifying empirical and practical impact of performance and excellence .Therefore the study aimed at assessing the appraised staff, identify whether performance appraisal of employees was done well and identify problems caused by lack of proper mechanism of conducting performance appraisal to conditions performance appraisal to employee Performance appraisal helps to improve performance through appropriate feedback, working and counseling to employees. It serves as a telling a surbonate how he is doing and suggesting necessary changes in his knowledge behavior and attitude .It serves stimulate and guide employee's development needs. It's also useful in analyzing training and development needs. These needs can be assessed because performance individual with high potential that can be groomed up for higher position Findings show that NAO has been conducting performance appraisal in order to improve efficiency and effectiveness. The NAO's longer range intention was to meet the organization needs and objectives. But then it's was found that there was lack of awareness among employees on performance appraisal forms are too difficulty for employees, lack of proper performance appraisal section under the personnel and administration department which would specially deal with formulation performance appraisal criteria Its has been recommend that in order for NAO performance appraisal to be effective and efficiency ,performance appraisal unit must be vested under administration personnel appraisal unit must be vested under Director of Admistration and personnel who deal more staffs .NAO should form an assessment team which should include representative from DAP Department.