EFFECT OF EMPLOYEES’ PERCEPTION OF PERFORMANCE APPRAISAL ON JOB SATISFACTION: THE CASE OF DASHEN BANK

Abstract

This study investigates the employees’ perception of fairness in the performance appraisal system and its effect on job satisfaction of an employee The perception of fairness in performance appraisal system consists of three main factors: Distributive justice, procedural justice, interactional justice and are used as independent variables and job satisfaction of an employee as dependent variable. Using random sampling technique 162 participants (employees) of the target institution-Dashen Bank branches (Main, Bole, Kality, Tana and Pizza branches) were selected from the total population of 325. In conducting this study, the required data is obtained through structured questionnaires. To check the reliability and validity of the adopted instruments the Cronbach’s coefficient alpha test and the content validity test was carried out. In the analysis descriptive statistics, independent sample T-test, one way- ANOVA, correlation analysis and multiple regression analysis was performed. The independent sample T-test shows that there is significant difference between genders in fairness perception in performance appraisal system, the one way-ANOVA test shows that there is significant difference among work experience groups and age level groups; however no significant difference found among educational level groups. The descriptive finding of the study shows that Dashen Bank employees had low level of fairness perception towards the existing performance appraisal practice, and low level of job satisfaction. The correlation analysis result also indicates that distributive, procedural and interactional fairness in the appraisal system had positive and significant relationship with job satisfaction. Whereas the finding of multiple regression analysis indicates that distributive, procedural and interactional fairness in the appraisal system had positive and significant influence on job satisfaction. An overall perception of respondents shows a below average rating towards distributive justice , procedural justice and interactional justice, which means most of the employees have unfair perception about the performance appraisal practice of Dashen Bank. The human resource management of the bank should prepare the organizational conditions in a way that fairness perception can be achieved among employees more than ever.