THE EFFECT OF PERFORMANCE MANAGEMENT SYSTEM ON EMPLOYEES PERFORMANCE: THE CASE OF AWASH BANK S.C

Abstract

The main objective of the study is to identify the effect of performance management system on employee performance in Awash Bank S.C. It also tries to understand effects of planning, feedback, and reward on employee’s performance and answering the most important question, perception of employees on the performance management system. The study was done based on primary data sources gathered from questionnaires distributed to selected branch workers of Awash Bank S.C. they are selected considering the experience in PMS and representative of the four grades of the bank’s branches. During the research process, the population of study comprises selective 20 branches and Head Offices staffs (Awash Bank S.C). A self-administered structured questionnaire was designed to collect the relevant information from the respondents. In course of investigation, instrument used were structured questionnaire distributed to 400 respondents of Branch Managers, BDM (Business Development Manager) Operational Manger, Customer Service Manager, Relationship Officer and Portfolio/credit analysts of which 356 were retrieved. Descriptive research methods were followed and correlation coefficient in the form of frequency and percentage was used to investigate the relationship between all variables of the study. The findings concluded that a revised performance management system should close the missing gaps and have a stronger emphasis on proper communication, managing, monitoring and reporting, as well as rewarding or correcting high or low performance respectively. The study recommends that Awash Bank should make the employees to participate on the Planning stage of the PMS and a frequent feedback is necessary to enable the employees be aware of what exactly is expected from them.