Describes a large commercial bank's system of performance appraisal for its branches along five major dimensions: 1) growth in deposits/advances (depending on whether they are deposits-heavy or advance-heavy branches), 2) profits or losses, 3) staff relations, 4) efficiency in internal branch routine, and 5) customer service. In actual practice, however, the management uses the absolute level of profits/losses as an index to the branches' performance. This raises several problems associated with measurement of true profits, like fixing a fair transfer price for surplus funds lent or funds borrowed from the head office, and the pricing of overhead expenses. In the absence of a clear-cut statement of organizational objectives and an agreed upon objective, and fair predetermined standards of performance, the entire exercise in performance appraisal is reduced to mutual defence of each others' positions and pledges for better performance in the next period.