In this paper, we examined the employee Performance Appraisal System (PAS) of hospitals and gave a description of the role and significance of employees in the PAS covering 27% of the population of Hungarian state-run hospitals. In the research, we also examined the relationship between performance appraisal and employee engagement, as well as the practice of measuring employee satisfaction. We created a scale called Employee participation in the employee performance appraisal scale. Based on our findings, we can state that the employee is an active participant in the Hungarian performance appraisal systems of hospitals, as they are involved in the appraisal and their views are taken into account. It has been found that where employee satisfaction is measured, there is an opportunity for the employees to formulate reflections on their evaluations. Although not outstanding, the employee is considered a partner in the evaluation of his work.  Kulcsszavak: performance appraisal systems, employee engagement, employee satisfaction measurement, Hungarian, hospital