The study investigated performance appraisal methods and employee performance of selected firms in Anambra State of Nigeria. The specific objectives of the study were to ascertain the extent management by objectives appraisal method, 360-degree performance appraisal method and goal setting performance appraisal method relate to employee performance. Relevant literature on performance appraisal and employee performance was reviewed under conceptual framework, theoretical foundation and review of empirical studies. The study was anchored on equity theory. A survey research design method was used. The target population of the study comprised 247 employees of three selected firms in Anambra State. The study used only 237valid copies of the questionnaire for analysis. Pearson correlation analysis was used to test the hypotheses formulated for the study. The findings showed that MBO appraisal method had a positive significant relationship with employee performance of the selected firms in Anambra State. The study discovered that 360-degree feedback method had a positive significant relationship with employee performance. The findings also revealed that goal setting method had a positive significant relationship with employee performance. The study concluded that performance appraisal is very imperative for improved productivity, promotions, augmentation, and job enrichment. It also enhances employees’ confidence, job commitment, competitiveness, productivity and firm profitability. This study recommends that staff should continue to perform their duties effectively and also that subordinates and supervisor should jointly set goals in order to avert demoralization, frustration, withdrawal, resentment and distrust in the organization.