THE EFFECT OF PERFORMANCE APPRAISAL PRACTICE ON EMPLOYEE MOTIVATION: THE CASE OF DEBUB GLOBAL BANK

Abstract

The primary objective of the study was to examine the effect of performance appraisal practice and its constituent elements (Ongoing feedback, Rewarding performance, trained appraiser, continuous open communication, fairness of PAS, and participation in PAS) on employee’s motivation. To achieve this purpose, descriptive and explanatory study designs have been employed through cross- sectional survey questionnaire from a sample of 130 permanent managerial and professional employees. The study used Stratified random sampling technique to draw sample branches from the target population. The 30 bank branches are divided into 30 subgroups or strata to draw representative sample branches. Random samples are then selected from each stratum. The data collected through questionnaire is analyzed using statistical measures such as descriptive statistics, correlation and multiple regression analysis by using SPSS version 20. The study found that the indicators of effective PAS such as, ongoing feedback, rewarding performance, trained appraiser, continuous open communication, and perception about fairness of PAS have a significant and positive impact on employee’s motivation while employee’s participation is statistically insignificant.