Factors Influencing Effectiveness of Performance Appraisal Practice: A Case of Selected Commercial Banks in Ethiopia

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The aim of this study was to look into the factors that influence the efficacy of performance appraisal practice at selected Commercial Banks in Ethiopia. To undertake this general objective, six specific objectives were defined and evaluated using quantitative research technique. The required data for conducting the research was obtained through questioners. The study adopted stratified sampling with a population study of 1200 respondents and sample size of 360.Version 20 of the Statistical Package for Social Science (SPSS) was used to analyze the data. Descriptive statistics and regression analysis were used in this study. Employees, according to the study's descriptive findings, at the Banks have experienced dissatisfaction with participation in the process, objectivity of the evaluation criteria and training given to them to aware of the system. Through factor analysis nine factors (Participation, Alignment of Organizational and Individual Goals, Reward Rating Linkage, Rater’s Commitments, Errors and Biases, understanding of purpose of performance appraisal system contribution of performance appraisal system to improve individual and the bank’s performance, Objectivity of the evaluation Criteria, Knowledge on the performance appraisal system, and need for more training on appraisal process) were obtained. Moreover, the finding of multiple regression analysis indicated that all factors except understanding of purpose of performance appraisal system are significant in ensuring the effectiveness of performance appraisal system. Therefore, it is recommended that, the banks should take these factors into consideration in order to ensure the effectiveness of performance appraisal system.



Effectiveness of Performance Appraisal, Employee Performance Appraisal