Annual Increment is one of the most awaited events in the life of an employee. All members of the job wait for this declaration with equal interest. Males and females equally desire to have a fair increment for their performances. Factors like qualification, achievements, contribution, publication, participation, customer feedback, willingness to take responsibility, team work, etc. are the basis for appraisal system which decides employees’ annual increment. The case highlights the defective rational for deciding increment for employee in an educational institute. The irrational decision policy demotivates to the extent that employee withdraws herself from active role to passive role and decides to quit. Key words: Appraisal, Discrimination, Annual Increment, Employee Expectation