Of course. The letter of appreciation gives a strong moral support to the employees to work hard and improve their performance. It even encourages all other employees to perform well especially when they all realize that letters of appreciation are taken into consideration for their job promotion.
Yes, recognition including "certificates" support and motivate employees. The fourth tier or Maslow's hierarchy of needs is esteem. Humans have a psychological need for reputation, status, prestige and recognition from others. Receiving recognition leads to self-esteem, achievement and independence resulting in employee commitment to the organization and working harder. One caveat is that employees may view recognition differently and personalized rather than "cookie cutter" recognition may be the better approach.
While some people are well motivated by “appreciation”, in many cases a good Thank You and a Job Well Done at the time of positive performance is equally if not more appreciated. And then there are those of us for whom we believe it’s an inadequate expression compared to performance pay (bonuses, raises, etc). Linking a Certificate of Appreciate with performance pay is a good approach.