| Abstract: | Ethiopian Electric power Corporation has introduced a new employee performance appraisal system in 2009, following its restructure. Therefore, the major objective of this study is to investigate the effectiveness of the current employee performance appraisal system and this research has a descriptive nature which describes the existing phenomenon as it exists. As result, the researcher has tested the effectiveness by selecting six major effectiveness variables and other related concepts. A total of 342 questionnaires were distributed to employees of the corporation selected based on stratified random sampling technique of which 259(76%) questionnaires were properly filled and returned. Consequently, the finding indicates that the company’s performance appraisal system is ill formulated and also based on the selected effectiveness variables; it is observed that the performance appraisal system is less effective across all the selected work processes. Therefore, based on the findings the researcher has recommended that the company should revisit its employee performance appraisal system and take corrective actions. For instance, alignment of the appraisal system with company’s objective, reward policy and development objectives should be maintained. Moreover, the company should also work a lot on the identified effectiveness variables (objective setting, training, communication, measurement system, frequency of the appraisal, and transparency and confidentiality of the system) to enhance effectiveness of the current performance appraisal system. Likewise, the company should give emphasis for employees’ participation in appraisal related matters. |
