The Effect of Performance Management System on Employee’ Performance: the Case of Nib Bank S.C, South-East Addis Ababa District
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Date
2023-06
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Addis Ababa University
Abstract
The purpose of the study was to determine the effect of performance management system on
employee performance; the case of Nib bank S.C., South-East Addis Ababa district. More
specifically, the study sought to identify the effect of goal setting on employees’ performance,
ascertain the effects of monitoring and evaluation on the employees’ performance, determine the
effect of feedback on employees’ performance, and identify the influence of reward system on
employees’ performance. Structured questionnaire composed of 40 questions (Likert Scale
questions) had been developed for the purpose of achieving the objectives and testing the
hypotheses of this research. The researcher employed simple random sampling. Sample size was
determined using Laurentina & Melchor, (2006). Thus, from the total population of 704
employees 175 were sampled. The data was collected from selected 20 branches of the district.
Quantitative research approach had been used to observe the phenomena via statistical technique.
Descriptive (Mean, Standard deviation) and explanatory type of research design has been used to
find the linkage between PMS and employee performance by using SPSS (Statistical Package for
Social Science)-25. Tables and graphs were used to present the findings. The result of the data
analysis reveal that PMS (GS: β= .162, p= .011. ME: β= .372, p= .000. FB: β= .352, p= .000. RS:
β= 091, p=.163). From this the study concludes that goal setting, monitoring and evaluation, and
feedback have significant effect on employee performance, and insignificant link between
reward and employee performance. Based on the finding the recommendations given are first the
bank should further strengthen the performance management system practices that can ensure the
best practices of employee involvement in the goal setting, monitoring and evaluation and
ongoing feedback. Additionally, the bank should identify areas of improvement such as; change
in reward system to improve effectiveness of employees’ performance