Performance appraisal systems play a critical role in enhancing faculty performance and institutional effectiveness in higher education. However, many Indian higher education institutions continue to rely on traditional appraisal methods that lack objectivity, transparency, and developmental focus. This study examines the role of technological integration—such as artificial intelligence, data analytics, learning management systems, and cloud-based platforms—in improving the effectiveness of performance appraisal systems. Using a mixed-methods research design, data were collected from faculty members, administrators, students, and parents across higher education institutions in Karnataka. Quantitative analysis reveals a strong positive relationship between technological integration and appraisal effectiveness, faculty development, and institutional alignment. Qualitative insights further highlight increased transparency, reduced bias, and improved feedback mechanisms through technology-enabled appraisal systems. The study concludes that technology-driven appraisal frameworks significantly enhance faculty performance and institutional outcomes, offering practical implications for policymakers and academic administrators.