Performance appraisal is the method the employer evaluates employees job performance by various aspects such as work competencies, attitude and productivities. However, the criteria of performance appraisal tend to be abstract. Besides, the evaluator has certain authorities when conducting performance appraisal. The above two reasons could lead to the discrepancy between employer and employee. To solve the above problems, we are going to organize the current theories related to the controversy over the evaluation of performance appraisal and refer to solutions based on Japanese Labor Law, then examine the rationality of this judgment on account of the above conclusion. Hope this could get to the bottom of this issue and provide a possible solution.