Effects of Performance Appraisal on Employees Motivation: A case of National Bank of Ethiopia

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Addis Ababa University


Employees’ performance appraisal is one of human resource management practices and the result gained from performance appraisal helps management to pass an administrative and developmental decision which can create a motivation to employees to perform better. Apart from this, this research paper wanted to find out how the process of performance appraisal system by itself determines or influences the level of employees’ motivation in the National Bank of Ethiopia (NBE). To do so, the objective setting process, the performance evaluation standards, the level of feedback, the nature of the evaluation (whether it is subjective or not), and on the other hand, the level of employee motivation was analyzed using self-administered questionnaire and strategies, procedures and guideline was assessed and presented using explanatory and descriptive research methods. NBE’s Strategies, procedures and guideline shows that the bank uses 360 degree feedback technique which increases the involvement of employees in the appraisal process, objectives and standards are aligned with the Banks Strategic plan. The primary data was analyzed using Statistical Package for Social Science (SPSS) and presented as tables and for analysis, regression and correlation techniques were used and the reliability analysis Cronbach's Alpha was used to check the reliability of questionnaire. Result of the correlation shows that all independent variables are positively and significantly related to the dependent variable, employee motivation except subjective evaluation system. The result of regression analysis shows that 34.4% of variation in employees’ motivation can be explained by performance appraisal (Objective Setting, Performance Evaluation Standards, Continuous Feedback and Subjective Evaluation and highly influenced ty performance Evaluation Standards. The findings of this research help the organization to work for the effectiveness of the performance appraisal system and improve employees’ motivation by knowing the variables relation and influence to employees’ motivation



Objective Setting, Performance Appraisal Standards, Continuous Feedback