Performance appraisal (PA) has become a prominent feature on the agenda of higher education institutions (HEIs). However, the traditional culture of the typical university is based on individual commitment, scientific teamwork, dedication to public service and intrinsic motivation of the academic staff, all of which are the essential components of public service motivation (PSM). By interviewing key informants from three public universities, the purpose of our research was to identify various tensions between PA and PSM, by asking what is the impact of PA on PSM of academics in public HEIs. Our findings have shown that the purposefulness of PA activities may not be fully understood by public HEI management and academics. The existing tensions between PA normative aims of motivation and fair evaluation and its descriptive effects of increasing bureaucracy and dissatisfaction might undermine PSM, an essential driving force that motivates academics to work in public HEIs.