The Role of Performance Management Practice on Employees Motivation: The Case of Commercial Bank of Ethiopia

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Addis Ababa University


The main objective of this research was to evaluate the role of performance management system on employees’ job motivation (the case of Commercial Bank of Ethiopia) with the main independent variables of the performance management process, that are performance management pre- requisites, planning, execution, evaluation, review, and renewal and re contracting process. Stratified random sampling technique was used and collect the data using questionnaire. The questionnaires were distributed to 330 sample size respondents from this 282 questionnaires were returned (85% response rate).Descriptive statistics using regression analysis were used to analyze the relationship of the dependent variable and the independent variables of the research. The research study reveals that the major weakens of the company on performance management practices are that the performance management evaluation results do not use for the performance management aims of maximizing or developing employees’ performance, empowering, motivating and rewarding employees for their best works. In addition the organization do not involve employees in the performance planning and lack of a two way communication in the performance review meeting. Based on the major findings the researcher recommend the management of CBE to develop a procedure that effectively guide the management and employee’s to use the PMS properly by involving participants in the system, use the performance result for significant decisions makings, give chances for employees to participate in the planning phase in order to get employees motivated from their involvement in the planning. In addition the bank should practice additional different tangible and intangible rewards related to employees’ performance to enhance the employees’ intrinsic and extrinsic level of motivation. Key words: Performance Management Practices, Employees’ Motivation



Performance Management Practices, Employees’ Motivation