The aim of this study is to investigate relationship between personal biases upon performance appraisal system. Researchers used quantitative research method to investigate relationship between observed variables. Researcher collected data from the banking sector employees working in Pakistan. Thus, 300 banking employees were selected to collect the data from respondents. The results revealed that personal biases, employee’s perception and culture has significant effect on performance appraisal system. Further, the study findings revealed that employees’ biases have significant and negative effect upon performance appraisal system. Managers are required to nurture and appreciate favorable cultures so as to contribute to establishment of public firms. Workers are left with strong feeling that the organization has a culture that is biased. In order for the long-term praise to be successful in generating attitudes, it is needed for workers to feel valued by their management team. When it comes to evaluation, favoritism is deeply embedded in Pakistan's governmental institutions, particularly in service sector. Both managers and middle-level staff think that when bias increases, so does the culture of bias inside public organizations.