A performance evaluation is a regular analysis of the job performance of an employee and the overall contribution to an organization. It evaluates employees’ skills, achievements and lacking. The performance assessment process of employees is essential for organizations to boost the productivity of employees and improve their results. Employees are less motivated in government and private hospitals. Employees and organization did not meet each other expectations. Victor Vroom develops theory of expectancy in 1964 which applied in this scenario. Vroom stated that three major factors determine the person motivation: expectancy, instrumentality and valence. Performance appraisal used as motivational tool and it is necessary for staff sustainability. Organization should do performance evaluation of employees and give feedback according to their work. Motivation is very important to enhance employee organizational commitment, resulting in higher productivity levels. Rewards are also some of the key strategies to strengthen the motivation of employees to use their best capabilities to develop innovative ideas that could improve organizational performance.