| Abstract: | This study aims to examine the effect of the performance management system (PMS) on
employee perception within the Commercial Bank of Ethiopia. By exploring how various
components of PMSsuch as goal setting, feedback, rewards, appraisal, and evaluation
affect employee productivity, the research seeks to provide insights into the effectiveness of
current performance management practices. The primary purpose is to identify whether
these variables significantly influence employee performance, thereby offering
recommendations for enhancing overall organizational effectiveness. The findings reveal a
strong positive relationship between the components of PMS and employee performance,
with all variables—setting objectives, feedback, rewards, appraisal, and evaluation—
showing significant influence (p < 0.05). The analysis indicates that approximately 82% of
the variation in employee performance can be explained by these independent variables,
highlighting their substantial role in performance outcomes. This underscores the
importance of an integrated and well-structured PMS in fostering employee motivation and
productivity within the organization. Based on these results, the study recommends that the
Commercial Bank of Ethiopia involve employees more actively in the planning phase of the
PMS to increase their commitment and understanding of performance expectations.
Additionally, implementing regular and constructive feedback sessions is crucial to ensure
employees are aware of their progress and areas for improvement. These measures are
essential for optimizing the effectiveness of the performance management system and
ultimately enhancing employee performance and organizational success. |
