Currently Approve/ Reject actions are available in approval process. We have a requirement where user wants another option, like Escalate. Is it possible to add custom actions to approval process? if not is there any workaround for this?
How do you want Escalate to be implemented? If you're asking to override the standard Approve/Reject options, as far as I know that's not possible - however, you can create Approval Actions through the basic UI and associate them with steps in the Approval Processe, but it's limited to things like field updates (which could meet your requirement), Task creation, etc. Go to the Approval Process and select Add New action.
See more here.
Approvals are also exposed via Apex, so if you wanted Escalate to be implemented in a different way, it would certainly be achievable.
Out of box it is currently not possible and here is the link to the idea.Please vote for it.