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Shahzad,
my answer here is just what i believe.
Performance appraisals are always a nightmare to everyone. most of the companies, its just a wastage of papers and resources and quality time.
there are still many companies who streamline the whole process and do it creatively rather than an employee/manager paper based appraisal system. this should start from the goal setting process which again most organisations forget or fail to do in the beginning.
i would suggest that you can do a yearly appraisal provided the results are going to show an impact on employees and the employer too.
In my organization has360 degree performance appraisal system. Half yearly done by department and programs and projects. On the other hand, HR participates for the annually and follow-up half yearly.