Is internal hiring helps in motivating the employees?

Yes , its a good thing, shows that company cares andvalue current staff more than external staff. The culture and disciplines should be strong, otherwise the internal applicant will stuggle to enforce his discipline and respect.

yes it motivate employee because it spread a positive feeling in organization regarding their growth and all .

we use IJP ( Internal Job Placement for this activity)

Definately, internal recruitment motivates employees to stay long time in the organization. It is helpful to reduce the staff turover rate.

Yes, it does, provided the process of hiring is transparent and unbiased one.