PERFORMANCE APPRAISAL PRACTICE AND PROBLEM IN COMMERCIAL BANK OF ETHIOPIA: CASE OF SELECTED BRANCHES UNDER WEST ADDIS ABABA DISTRICT

Abstract

Human resources are among the fundamental resources available to any organization. Performance appraisal is part of human resources management which a formal system of periodic review and evaluation of an employee’s job performance. This study, therefore, was conducted to assess Performance Appraisal Practice and Problem in Commercial Bank of Ethiopia case of selected branches under west Addis Ababa district. The researcher has used descriptive research method. The data collection tools were interview and questionnaire. The research has been designed as a case study. Both primary and secondary data were used in the research. A survey questionnaire with five point Likert scale was a main tool for gathering primary data about Performance appraisal practice and problem in commercial bank of Ethiopia case of selected branches under west Addis Ababa district. A total of 80 employees have been taken as a sample randomly and branches were selected using stratified sampling methods based on their grade level. researcher distributed structured close ended questionnaire for CSO`s and structured interview questionnaires for the concerned body, HRD to collect the relevant data. The study found out that the CBE uses graphic rating scales to measure employee’s job performance appraisal on quarterly base. The bank does not follow formal appraisal process that is developed by scholars in the field. The performance standards of the bank addresses issues such as quantity, quality, timelines, cost effectiveness and strategic relevance but it fails to address stability or consistency or the extent to which individuals tend to maintain a certain level of performance over time. CBE also faces huge problems on its performance appraisal practice, most of them are rater’s error like regency, halo/horns, situational influence etc and the remaining is the problem of the system. The appraisal result in CBE focused only for making promotions. Performance review discussion does not take place in the bank unless an employee comes up with grievances. Generally, the outcome of the research confirmed that the performance appraisal score have problems and weaknesses that need to be improved. Since it needs improvement, possible recommendations are outlined at the end of this paper.