Performance appraisal system and its effectiveness in Ethiopian private bank the case of bank of Abyssinia

Abstract

The goal of this research was to see how effective the Bank of Abyssinia's performance appraisal system was. The study employed a descriptive statistical method with a cross-sectional survey and a qualitative research strategy. The study's goals were to analyze employee awareness of the system's importance and criteria, as well as the effectiveness level of the performance appraisal system and the elements that influenced its successful implementation. We used both primary and secondary data. The study was carried out with the use of SPSS, and descriptive statistics, frequency tables, percentages, and pie charts were used to display the findings. The study's scope was limited to Addis Ababa's five branches and headquarters. According to the conclusions of the study, there is a high level of compliance in the bank when it comes to applying the system. The effectiveness measures revealed that behavioral factors such as customer relations, responsibility, and quality of work receive higher ratings than professional competence and quality of work, indicating a weakness in the system's implementation to differentiate weak and strong performance, and the system is not clearly linked to profitability. The system's effectiveness in improving employee and organizational performance is judged to be low. The utilization of appraisal findings to determine rewards resulted in appraiser leniency. The researcher suggests that the administrative and developmental parts of the appraisal format be clearly separated, refocus criteria to include task undertaken by employees to link the system with the bank's profit and goals, introduce multiple rating system, design scheme to reduce the use of appraisal results for salary adjustments, develop means to link profitability and performance appraisal, provide rater trainings, and develop f The knowledge gathered during the evaluation might be applied to similar surveys in other human resources operations, adding value not only to the company but also to others in the same industry.