Ethics and justice are essential for personal life and the workplace. Religion plays a vital role in establishing ethics and judgments. Islam has a complete code of ethics and faith in every aspect of our life like spiritual, social, political, and economical. Both the Islamic Sharia-based and secular Muslim populated country has some contradiction and challenges in executing the employee performance appraisal system based on Islamic work ethics and faith. This paper review the relevant literature regarding performance appraisal based on an Islamic perspective. Details literature has been analyzed based on contemporary performance appraisal issue and the Islamic view of work ethics. Islamic work ethics and non-Islamic work ethics have some common as well as a different point of view regarding appraising employee performance. The current study proposed an Islamic performance appraisal model for meeting challenges arises from non-Islamic practices. In this paper, a conceptual framework employee performance appraisal has been presented based on Islamic work ethics for meeting challenges from traditional contradiction.