Most R&D organizations or institutions base performance appraisal either on self-measurement or subjective judgment. R&D organizations are usually comprised of a system of divisions, each with distinct research programs aimed at an assortment of industries and customers. This mix accounts for the lack of a common model or mechanism of appraisal to help management teams in either meeting institutional goals or enhancing R&D performance. The purpose of this study is to use an AHP method to identify the key factors for appraising the performance of an R&D organization, in this case the Industrial Technology Research Institute (ITRI) of Taiwan. The appraisal features two distinct stages. The first employs a questionnaire to seek views of a broad sampling of senior directors, engineers, scientists and administrators in the organization. The returns are then sifted by Analytic Hierarchy Process (AHP) to identify and assign weights to key factors. The second stage combines a questionnaire with an interview. By this procedure, the factors that this institute uses to appraise performance-particularly in respect to applied research activities-are identified and weighted accordingly.