This study aimed at exploring the teachers' performance appraisal system using appreciative inquiry, within the qualitative research approach, at a private higher secondary school in Karachi. This aim was fulfilled by generating the data through participation and collaboration of two teachers, a coordinator and two vice-principals of the school, selected through purposive sampling process. The teachers' performance appraisal called "Performance management and reward system" is a dynamic process, accessible for the concerned teachers for the purpose of development and improvement. The main components of the appraisal are classroom observations, students' feedback, pre and post-observation meetings, professional sessions, students' board results, observation by the management, and set targets for the academic year. The teachers are rated, based on the compiled data of the appraisal process at the end of academic year. This appraisal process was reviewed two years ago to make it more development centric rather than only accountability oriented. The findings suggest that the formative nature of performance appraisal process helps teachers to develop their professional life in the school. At the same time, findings also reveal that summative nature of performance appraisal is also useful for taking decisions by the school management. The objectivity of the appraisal process can be ensured through multiple sources for evaluation and introduction of rubrics in the process. Performance appraisal is helpful to empower the teachers by providing a structured path for the continuing professional development. The Five-D Cycle of Appreciative Inquiry was carried out with an aim to improve the process of performance appraisal system in the school. It also helped in bringing forward the good practices through in-depth interviews and focused group discussions. The use of Appreciative Inquiry approach, which is the affirmative discussion on the performance appraisal process, helped teachers to reshape their beliefs and practices as research participants.