ASSESSMENT OF THE CHALLENGES OF EMPLOYEE PERFORMANCE MANAGEMENT SYSTEM PRACTICES: THE CASE OF AWASH BANK, ADDIS ABABA AREA, NORTH DISTRICT

The purpose of this study was to assess advantages, challenges, perception and practices of employee performance management system implemented in Awash bank. The study used descriptive method of study with cross sectional survey and used mixed research approach. This study has used census to select questionnaire respondents and purposive sampling to select interviewees. The objectives of the study were to assess the practices and challenges of employee performance management system, to identify opportunities gained from in implementing the system, to assess employees’ perception towards employee performance management system and to evaluate performance management processes in the bank. Primary and secondary data were used. The analysis was presented using descriptive statistics; frequency tables, and percentages. The scope of the study was limited to branches within Addis Ababa area. The findings of the research indicated that employees’ performance management system has numerous benefits. Among them; it has created role clarity among employees, enables to differentiate good and poor performers, created a constructive competition among staffs. The system has also helped to motivate employees and encourage development through creating communication between the employees and their supervisor or managers. It improves both individual and the bank’s overall performance. However, the research has found that there were challenges; a tendency giving unbalanced goals for similar positions while they have equal job grades, no fair job rotation among employees, no sufficient resource allocation to execute their job properly, no clear mechanism in the bank to address the issue of underperformance, a tendency of giving 1 and 5 only for non-financial targets. Furthermore, the result of evaluation did not attach with reward and recognition schemes. On the basis of the findings, the researcher recommended that the bank has to be sure that equal jobs are assigned for equal positions, prevailing fair job rotation, attaching performance evaluation results with reward and recognition programs so that the issue of underperformance will be solved. The bank has also work with training of supervisors on assessment to make rating standard/uniform across assessors and branches/process