Assefa, Teklegiorgis (Assistant Professor)Afework, Fasil2021-06-082023-11-042021-06-082023-11-042014-06http://etd.aau.edu.et/handle/123456789/26760Performance management systems are always of imperative concern of any organization/institution while managing its human resources by creating a linkage between the overall strategic aims of business with individual and/ team goals. Here comes the reason why Ethiopian private commercial banks are trying to experience it currently. The purpose of this study is to examine the practices and challenges of performance management system in selected Ethiopian private commercial banks. A combination of qualitative and quantitative research approach has been adopted whereby a structured questionnaire was administered by the researcher to a selected population size of 132 of which 112 completed questionnaires, generating a response rate of 84.84% and in-depth interviews with HR directors and managers of the case banks are used to support the quantitative data. Findings have shown that the practices of the performance management system do not include intensively all the process of PMS, the output of PMS is mostly used for administrative purpose and lack of senior and line management commitment towards the system is the most potential hindering factor in the implementation of the system in the case banks. The Researcher has also explored various suggestive solutions regarding said factors. Though the research findings are valuable, limitations of the study were usage of only four banks and application of perceptual measures which could increase risk of respondent bias. Future studies, in order to avoid these limitations could extend their scope to include range of banks and conduct longitudinal research using objective dataen-USPerformance AppraisalPMSPracticesThesis