Waktola, Gemechu PhD)Kebede, Samuel2018-11-022023-11-042018-11-022023-11-042014-05http://etd.aau.edu.et/handle/123456789/13671The purpose of this study was to assess the effectiveness of the performance appraisal system implemented in Bank of Abyssinia. The study used descriptive method of statistics with cross sectional survey and used qualitative research approach. The research objectives were to see the compliance in implementing the system, assess employees’ awareness about the importance and criteria being used, the effectiveness level of performance appraisal system, and the factors affecting successful implementation. Primary and secondary data were used. The analysis was done by the help of SPSS and presented using descriptive statistics, frequency tables, percentages and pie charts. The scope of the study was limited to five branches and head office within Addis Ababa. The findings of the research indicated that there is high compliance with regard to implementing the system in the bank. The measures used to judge the effectiveness indicated that higher ratings are given to behavioral factors such as customer relation, responsibility, etc. than professional competence and quality of work, which indicated the existence of weakness in implementation of the system to differentiate weak and strong performance and the system is not clearly linked to profitability. The effectiveness of the system to improve performance of the employees and the organization is found to be low. The use of appraisal results to make rewards produced leniency from the side of appraisers. On the basis of the findings, the researcher recommends that the administrative and developmental part of the appraisal format be separated clearly, refocus criteria to include task undertaken by employees to link the system with profit and goals of the bank, introduce multiple rating system, design scheme which reduce the use of appraisal result for salary adjustments, develop means to link profitability and performance appraisal, provide rater trainings, develop follow-up mechanisms by human resources departments and develop documentation systems to handle the process and not only the final results. The experience gained in the assessment could be used to make similar surveys in other human resources activities add value not only to itself but could be used in other companies of the same nature.Key words: employee performance appraisal, effectiveness, direct reportees, ratee, appraiser, rater, compliance and training.enemployee performance appraisaleffectivenessdirect reportees, rateeappraiser, ratercompliance and trainingThesis