The objectives of this research were: 1) to study current situation and problem in the performance appraisal system of secondary school teachers, under jurisdiction of the Local Administrative Organization (LAO), 2) to develop the performance appraisal system to apply with the LAO school teachers, and 3) to evaluate the application from the performance appraisal system by using research and development process. The researcher intended to study the current situation and problem of appraisal system in work practice of secondary school teachers. The research was based on the appraisal system, system development, evaluation of performace, factors in performance appraisal system, the LAO educational administration, and the Good Governance principle. The samples were 758 school directors, vice-directors, and division/department chairs from the secondary schools in Thailand. Research instruments were semi-structure interview, rating scale questionnaires, and open-ended questions. Research finding revealed that ethical values were the highest rank in content of performance appraisal while learning management ranked the lowest. Discussion aspects included current situation, performance appraisal system, application of the system, and satisfaction to performance appraisal system.