Research on performance appraisals has often overlooked the importance of attitudinal and organizational variables. To test a model of the influence of organizational contextual variables on the perceived utility of performance appraisals, 239 Virginia mental health workers completed a questionnaire. The 21 items were designed to measure the four components of the structural model: (1) constraints on performance; (2) purpose of appraisals; (3) organizations; and (4) ability of raters. Analysis of results indicated that performance constraints had a strong direct causal impact on the perceived utility of performance appraisals. Performance constraints also appeared to moderate the indirect causal influence of rater ability on the perceived utility of appraisals. The findings suggest that attitudes about the perceived utility of performance appraisals and their determinants can serve as a diagnostic tool for organizational development. (JAC)