ASSESSMENT OF EMPLOYEE’S PERFORANCE APPRISAL PRACTICES AND CHALLANGES: IN THE CASE OF ABAY BANK S.C

Abstract

This study is to assess the practice and challenges of employees’ performance appraisal in Abay Bank S.C. The researcher has used descriptive research design and have used stratified sampling method to select the sample that are representative which are nine branches and head quarters from those branches 242 employees have been taken as a sample and the response rate was 93.80%.The data that was gathered through questionnaire and interview were analyzed by using a software package called SPSS. The study found out that Abay Bank uses PA to measure employees’ job performance on January and July. The Bank does not follow formal appraisal process and the performance standards that are developed in the field study. Abay Bank also faces challenges on its performance appraisal practice, most of them are rater’s error like recency, halo/horns, situational influence etc and the remaining is the problem of the system. The human resources department of the Bank takes the ultimate responsibility for appraisal and supervisors take the lion share by filling appraisal forms for most of the employees. The appraisal result in Abay Bank used only for making promotion, bonus payment and annual increment decisions. Performance review discussion does not take place in the case company unless an employee comes up with grievances. Generally the outcome of the research confirmed that the performance appraisal practice of Abay Bank S.C. has weaknesses that need to be improved.