Effectiveness of Employee Performance Appraisal System of Commercial Bank of Ethiopia

Abstract

This study aimed to address the factors that affect the effectiveness of the performance appraisal system of the Commercial Bank of Ethiopia. A study used a quantitative research design and deductive methods. The study sample was from a total population of 4,125 employees, all from branches in the Addis Ababa districts. A stratified sampling method was applied to select representative units of measurement. Questionnaire.was The only Primary data collection instrument was A simple random sample determined 120 respondents from each stratum, contributing to generalizing the findings. The scope of the study was delimited to 140 branches found in Addis Ababa. The analysis was done with SPSS software and presented descriptive statistics, correlations, assumption tests, and regression analysis. The correlation results indicated a positive relationship between the factors and the effectiveness of the appraisal system. The regression test results showed that independent variables/factors/ was significantly contributed to variance at a significance level of 0.05. The study's findings revealed that employees think that the factors like feedback richness, improved performance of employees, motivation, Perception towards performance appraisal, and purpose of appraisal result affect the effectiveness of the appraisal system implemented in CBE. At the same time, managers and immediate supervisors thought that the approach to evaluating the performance of employees implemented was not affected by them. The investigation indicated a significant difference between raters' and rates' perceptions of the effectiveness of the performance appraisal system. Based on the findings, the researcher is going to recommend that the management creates intensive awareness for both raters and rates about the appraisal system, increase the participation of all employees towards the policy and procedure formulation to enhance their belongingness and exploit uses of appraisal, the feedback provided by raters should be specific and timely and be against predetermined performance expectations, ensure whether the system achieves the intended objectives or not, provide training for raters, and link the result of appraisal with rewards to motivate the performers.

Keywords: Employee Performance Appraisal, Effectiveness, Appraisee, Appraiser

DOI: 10.7176/JESD/14-7-04

Publication date: April 30^th 2023