The purposes of this study are to examine the influences of appraisal and reward on the activities of knowledge management and to search the strategies for effective appraisal and reward system to activate the knowledge management. The results of covariance structural analyses indicate that appraisal has a significant direct effect on reward and knowledge creation as well as a significant indirect effect on knowledge sharing via reward and knowledge creation. Reward has a significant direct influence on knowledge sharing. Knowledge creation also significantly affects knowledge sharing. Based on the results, the potential implications of effective appraisal and reward system to activate the knowledge management are discussed.