Mulugeta Gebremedhin (PhD)Milat Mekonnen2024-02-232024-02-232022-06https://etd.aau.edu.et/handle/123456789/1973The main objective of the study was to assess the effect of the performance management system of Ethiopian Airlines on employee and organizational performance and its effect on promoting best behaviors and practices. To this purpose the researcher has studied to analyze the effect of PMS on employee performance, the extent to which performance measurement are aligned with the organization strategy, perception of employees on effectiveness of performance management and determinant factors for effective implementation of PMS using multiple regression model. The research used quantitative method with the nature of both descriptive and correlation, and simple random sampling technique was used in the study to take a sample from the population. The sampling frame was divided into homogenous, non-overlapping groups called strata that is departments in case of the study. A total of 381 questionnaires were personally handled by the respondents with close follow-up and guide in filling the questionnaire and 345 respondents filled and returned their questionnaire. Thus, constituting approximately 89 % response rate. The statistical analysis of this study was done by using SPSS software version 20, and the researcher used both descriptive and inferential statistic. The descriptive statistic tables, mean and standard deviation are used descriptive statistics in this study to describe the data. Inferential analysis, the result of multiple linear regressions was analyzed. Based on the finding’s coefficient values of reliability of PMS = 0.368 i.e., 100% change in reliability leads to 36.8% positive change in employee performance level. Coefficient values of Inclusiveness =0.266, implying that a 100% change in inclusiveness bring about a 26.6% positive change in employee performance level. Coefficient values of Acceptability and fairness =0.262, implying that a 100% change in acceptability and fairness bring a 26.2% positive change in employee performance level. Coefficient values of Openness =0.159, implying that a 100% change in PMS openness leads to a 15.9% positive change in employee performance level, linkage to KPIs =0.111, implying that a 100% change in PMS Linkage to KPIs leads to a 11.1% positive change in employee performance level. Ethiopian Airlines need exert a better focus on these dimensions to bring a higher level of employee performance to its employees and should emphasize on inclusiveness, acceptability and fairness, linkage to KPIs factors of performance management system to augment its employee performance. Ethiopian Airlines should also work with more attention and focus towards the improvement of Openness and reliability factors to bring improve on its employee performance. Key word: - Inclusiveness, Acceptability & Fairness, Openness, Reliability, and Linkage of KPIen-USThesis