Job satisfaction of nurses with performance appraisal is very important for enhancing their motivation and work output. The health care setups have vast participation of the employees and appreciate them according to their work through performance appraisal. The purpose of this study was the effects of job satisfaction on nurses and their work output. The study was descriptive cross sectional. A total of 114 participants were taken for this study. The questionnaire was distributed to 114 participants and 100 participants returned back. The data was collected from “The Children's Hospital and Institute of Child Health, Lahore”. The data is analyzed by using the SPSS version 16. Results of this study showed that nurses' ages were 21-25 years (31%), 26-30 years ( 52%), 31-35 years (11%) and above 36 years were 6%. Nursing is a female dominant profession, so all the participants were female nurses. The nurses experience 4-8 years (64%). Their chances of promotion were very less because of less structured policies. Only 44% satisfied from the present policies. Just 9% of participants got satisfied from the developed professional skills. 16% of participants agreed with the work distribution. There were increased workload and limited resources. The study showed that nursing is a female dominant profession. The employees were not appreciated unless the organization had limited resources. The participants were not satisfied with the policies. Increased workload decreases their quality of work. The following factors affect nurses' job satisfaction, if they work on them, job satisfaction will be improved with the limited resources. This study also covers the behavior effects regarding job satisfaction.