In today’s world the biggest task of an organization is to motivate and retain the employees. Motivation is the company’s life blood. Motivation is a complicated topic. It has been greatly studied. An enormous research studies had been conducted by different authors and research scholars for exploring effectiveness of performance appraisal and its relation to job satisfaction and motivation in organizational setup. Performance assessment is often well thought-out as one of the most important Human Resource (HR) practices. Study shows that whether performance appraisal is effective for motivation or not.