The aim of the study was to establish the effect of performance appraisal on employee motivation at the Ministry of East Africa Community, Labour and Social Protection. The research study adopted a descriptive research design in form of a survey and a sample size of one hundred and twenty (120) respondents drawn from all the departments in the Ministry ranging from different job groups which included the senior management (Job Group P and Above), middle level management (job group J to N) and lower level employees (job group A to H). Stratified random sampling was used as all the respondents were drawn from different levels or strata within the Ministry. Structured questionnaires developed in form of a five pointlikert scale was used for data collection as they were easy to administer and cheap in terms of cost and time. Data was collected and analyzed by use of scientific package for social sciences (SPSS). A regression model was used to determine the co-efficients of the effect of performance appraisal on employee motivation. The study shows that there is a strong positive significant correlation between performance appraisal and employee motivation and it can concluded that performance appraisal system has a significant impact on the employee motivation at the Ministry of Labour, East Africa Community and Social Protection. The conclusion of the findings was that the Ministry uses performance appraisal to motivate employees though there is need for a comprehensive policy to link pay to performance. The recommends that effective feedback and communication; giving training opportunities to employees to acquire skills; and encouraging employees’ participation in performance appraisal processes are all essential for effective performance appraisal process in an organization.