ABSTRACT : Motivation is one of the most important tools of Management. Organizations are designing motivation systems to encourage employees to perform as well as to attract and retain potential candidates. The main purpose of this study was to determine the effect of employee appraisal on the organization performance in public institutions. The study adopted a descriptive research design. A case study of Kenya Commercial Bank Kericho Branch was used. The study used both qualitative and quantitative techniques to obtain data from primary and secondary sources. The study revealed that Employee appraisals (β = 0.632, p = 0.000) was found to positively influenceemployees’ performance in public institutions. Based on the findings, the researcher recommended that the management should encourage employee appraisal and insist on its importance for enhancing organizational performance as it spells out the employee problems and provision of ways of solving them.