| Abstract: | The purpose of this study was to investigate the effect of performance management system on
employee job motivation in case of Hibret Bank S.C. The study used both explanatory and
descriptive research designs. A total of 210 employees participated in the study with response
rate of 97.22%. The researcher drew on both primary and secondary data sources. The
researcher used simple random sampling techniques. The data was analyzed using descriptive
and inferential statistics. The results show that Employee motivation has been found to be more
affected by performance management process. The findings show that there is a clear
relationship between employee motivation and performance management process. The study also
found out that performance management system of Hibret Bank have a negative effect on
employee motivation due to ineffective goal alignment, poor planning, biased practices, lack of
feedback, and dissatisfaction with recognition and measurement. These challenges need to be
addressed to enhance the motivational aspects of the performance management system. On top
of that, performance assessment is the most affecting variable in employee motivation with beta
value 0.475.According to the regression analysis result, performance assessment, performance
renewal, pre-requisition, performance execution and performance review has significant effect
on employee motivation (p<0.05). On the other hand, performance planning have no significant
effect on employee motivation due to the fact that p>0.05. Based on the research findings and
conclusions the major recommendations are to establish clear performance standards,
addressing hindering factors, ensuring fairness in the evaluation process and fostering open
communication channels for feedback and concern. |
