| Abstract: | The study was designed with a general objective of assessing the impact of performance management systems’ effectiveness on employees’ motivation. It was conducted in Ethiopian Airlines, a government owned international carrier, based in Addis Ababa, Ethiopia – with more than 11,000 permanent employees. The research approach was explanatory with a quantitative design. Quantitative type of data was collected as a primary and related literature and documents as a secondary source. Closed-ended questionnaire was distributed to a stratified sample of employees from faculty maintenance departments. A total of 77 questionnaires were collected and processed for analysis using descriptive and inferential statistics with the help of SPSS. Mean scores and standard deviation were used to assess the level agreeableness of the respondents. Relationship of the independent and dependent variables were analyzed using the correlation and regression methods. The results were then presented in the form of tables followed by discussions for further interpretation on the findings. The major findings of the research indicated that the clarity and continuous feedback variables of the PMS to have been perceived as less effective. The other four variables in communication, inclusiveness, rewarding performance, acceptability, and fairness factors were considered to be relatively satisfactory by the employees. While the view of the employees towards the determinant factors varies, the overall perception of the employees towards the PMS was positive, as 51.8% have agreed to the questions on the system. Similarly, the employees’ level of motivation has a score of 57% of the employees who felt that they are motivated. The study has found out that there was a positive but weak relationship between the independent variables (the PMS) and motivation. The study has also shown that employees at different division view the PMS differently, despite their level of motivation being unaffected. Therefore, it was concluded that, the PMS requires improvement to make it more effective. In addition, it was concluded that the impact of the PMS on the level of employees’ motivation was minimal. Finally, the researcher has recommended that the company strives to improve the system to make it effective in all its aspects. In addition, it was recommended that the features of the PMS to be revised so that it becomes strong in influencing the employees’ level of motivation. The researcher has also recommended that the system needed to be implemented systematically in order to be equally understood by all employees regardless of their demographic background. |
