Introduction: The three thrusts of the Commission on Higher Education revolve around instruction, research, and extension. Performance appraisals (PA) have been utilized in various forms in different organizations, with the expected outcome of excellent employee performance. However, despite its utilization in universities, research and extension-related criteria seem to be limited in the appraisals. The study aimed to determine the following: (1) the likelihood of research and extension participation if related criteria are included in the PAs of physical therapy faculty members; (2) the relationship between intrinsic and extrinsic motivation and research or extension participation; (3) factors that are implemented or not by HEIs to enhance faculty engagement. Methods: A mixed method design was utilized, with dominance of quantitative over qualitative data. Seventy-five full-time faculty members of Physical Therapy programs responded to the survey. Data were collected for six months using the Google Form online questionnaire. Spearman Rho and descriptive statistics were used to examine the results. Responses to open-ended questions were manually grouped into categories using thematic analysis. Results: The research showed that physical therapy faculty members are more likely to participate in research and extension activities if related criteria are included in the appraisals. Further, the study revealed a significant relationship between the intent to participate in research and extension-related activities and intrinsic motivation, but it did not indicate an association when correlated with extrinsic motivation. Professional development is a strong intrinsic motivator. Discussion: The inclusion of research and extension-related criteria in performance appraisals and consideration of intrinsic motivators must be considered by academic institutions to encourage faculty members to participate in research and extension activities. The author recommends maximizing the positive effects of performance appraisals by providing clear expectations to faculty members. Furthermore, intrinsic factors may serve as powerful motivators and, therefore, should be thought of to encourage participation. A strong, robust, well-supported policy centered on the organization’s vision, mission, and goals is necessary for successful implementation.