Performance appraisal is extremely important to measure employee motivation. It is not the simple statistics of volumes of tasks performed, but it is related to the overall performance, dedication and growth in a specific field. If an employee is continually producing high volumes of repetitive tasks, but his overall performance and dedication are stagnant because of any reason whatsoever, it is a case of lack of motivation. Employee motivation can be measured by quantitative and qualitative analysis of his overall performance, which includes his creativity, accomplishments, overall contribution, interaction with the teammates and positive communication.

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If he performs better on all of these parameters, it is an indication of enhanced motivation at work. Motivated employees are always an asset for the organization. These are the engines, who take the organization to unknown heights and uncharted territories. Motivated employees are responsible for great discoveries, innovations, enhanced productivity, brand value and the image of the organization. Unmotivated employees carry negative vibes, spread negative news and are difficult to manage. They have little or no contribution towards the accomplishment of tasks, product development, project management and they do not have any emotional attachment with the vision and mission statement of the organization.

Performance appraisal indicates the state of employee motivation in an organization, through simple observations. If there is a continued drop in the performance, attendance, contribution towards the projects, team spirit and communication, it is a signal of an unmotivated employee. The supervisor should interact with such individuals to know the reason behind this lack of motivation. The reason may be either external or internal, but whatever these are, they need to be addressed immediately to avoid lack of productivity.

So, we can say that performance appraisal is a process which can be used in different ways to enhance productivity, to measure career development, and assess the employee motivation in an organization.