The main purpose of this study was to evaluate the effect ofrnperformance appraisal on employee motivation in the case of MajorrnGeneral Hayelom Areya Military Academy. Causal research designrnwas used. As a result to analyze this relationship the researcherrnmainly deployed mixed type of research design. 151 respondents werernselected representing a population of 243 using stratified randomrnsampling in each department. Self-Administer Drop off survey datarncollection technique was used and Statistical Package for SocialrnScience (SPSS) software version 22.0 was employed to analyze andrnpresent the data through the statistical tools, namely descriptive andrninferential analysis. Performance appraisal did not motivatedrnemployees in the academy. Performance appraisal rating cannot bernconsidered as a technique that has a pos i t ive effect on workrnperformance and employee motivation. The performance appraisalrnidentifies performance problems to improve employee motivation andrnjob satisfaction. In general the research findings were Pas and PAMrnhad appositive relation with employeesâ€™ motivation. And PAM wasrnmore affects motivation than PAS in the academy. Unfair evaluation systemrnand understanding of performance appraisal objectives were thernmajor factors that reduce morale for performance at the academy. Tornencourage the commandants and other supervisors in developing fairrnevaluation systems to help provide well perform results andrnsatisfaction for the staff of the military academy. Employees did notrntrust on the PAS, PAM and motivation factors of academiesrnimplementation; on its unfairness and less of good communication inrnthe academy performance appraisal result become de-motivation, jobrndissatisfaction, absenteeism, and turnover would occur in thernAcademy.