Background An organization’s performance-appraisal system can be a practical tool for employee engagement, motivation, and development when employees perceive their performance appraisals as fair. Aim To assess staff nurses’ perception about performance-appraisal fairness and its relation to their work engagement at Beni-Suef University Hospital. Design A descriptive correlational design was utilized. Setting Data were collected from Beni-Suef University Hospital. Sample A convenient sample (n=250) of staff nurses who accepted to participate in the study. Tools Two tools were utilized to collect data: (a) performance-appraisal fairness perception questionnaire, (2) Utrecht Work Engagement Scale. Results The results of the study revealed that the majority of staff nurses highly perceived all domains of performance appraisal, interpersonal justice mean-percent score was 86.2% and distributive justice was 79.4%. They also had a high perception of work engagement, with a mean-percent score of 89.5% for the dedication domain, followed by vigor (83.7%) and absorption domain (82.7%). More than two-thirds of staff nurses (67.6%) reported high levels of work engagement, and there was a statistically significant positive correlation between total (r: 0.370, P: 0.00) and all domains of performance-appraisal fairness and work engagement. Conclusion The study findings concluded that staff nurses highly perceived performance-appraisal fairness and work engagement, more than two-thirds of staff nurses had high levels of work engagement, and there was a statistically highly significant positive correlation between staff nurses’ perception of performance-appraisal fairness and their work engagement. Recommendations: the administrator should develop a plan for continuous improvement of performance-appraisal fairness, continuous training of head nurses on how to perform sound performance appraisals, regularly revise, update, and disseminate performance-appraisal forms, suggest a plan to sustain a high level of engagement, and motivate staff to participate in performance-appraisal planning to be more engaged.