Mekonnen, Worku (PhD)Gessese, Tilahun2018-10-182023-11-042018-10-182023-11-042017-05-23http://etd.aau.edu.et/handle/123456789/12873This study aimed at assessing the practice of performance management system and examined its impact on employees’ organizational commitment in Fitche Hospital. The questionnaires were distributed to 152 sample employees of the study and 145 were returned and used for analysis. Explanatory survey design using quantitative method was used. The participants of the study were selected using probability sampling method specifically stratified random sampling on the basis of the Hospital’s business unit category. The data collected from respondents through questionnaire were analyzed using descriptive statistics such as mean and standard deviation, Pearson’s correlation analysis, multiple regression analysis and independent samples t-test with the help of SPSS version 21. The descriptive result indicates that all the stages of performance management system rated below moderate except prerequisite. The findings also revealed that employees score more on continuance commitment, affective commitment and normative commitment respectively. The result of Pearson’s correlation found that except performance planning all stages of performance management system have positive and significant relationship with each dimension of employees’ organizational commitment. On the other hand, multiple regression result shows, except performance planning all stages of performance management system have statistically significant influence on employees’ organizational commitment. It was also found that performance management system stages differ in their influence on each dimension of organizational commitment. Furthermore, there is significant difference between technical and non-technical staffs on implementation of PMS. However, there is no statistically significant difference between the staff members regarding their level of organizational commitment. The study recommends that performance management system should be clear, transparent, easy to understand, fair, and real measurement of employees’ performance to enhance employees’ commitment. Also performance planning, performance execution and performance renewal and reconstructing have unique contribution. Therefore, management of the Hospital should mainly focus and use those stages to enhance employees’ commitment level. Finally it is recommended that the hospital should identify and consider the factors that have been identified to have significant difference between the staffs.en-USperformance management systemprerequisite, planningexecutionThesis