EFFECT OF PERFORMANCE APPRAISAL SYSTEM ON EMPLOYEE PRODUCTIVITY IN COMMERCIAL BANK OF ETHIOPIA: JIGJIGA DISTRICT

Abstract

Performance appraisal system are processed designed to assess and evaluate an employee’s performance within an organisation. It offers a chance to regularly assess pre-determined objectives. The research aimed to investigate how the performance appraisal system influences employee productivity in the commercial bank of Ethiopia's Jigjiga district. Employee productivity served as the dependent variable, while independent variables encompassed the performance appraisal process, goals, methods, and feedback. The study employed both quantitative and qualitative approach, utilizing both descriptive and explanatory research designs to achieve the research objectives of the Commercial Bank of Ethiopia in the Jigjiga district. A questionnaire was distributed to 122 employees at the Commercial Bank of Ethiopia in the Jigjiga district. The data was coded, entered, and analysed using SPSS version 20, a statistical package for the social sciences. Descriptive statistics were utilized to report and were interpreted through tables, frequency, percentage, mean, standard deviation. To assess the reliability of the instruments, internal consistency techniques were used, resulting in a Cronbach’s alpha coefficient of 0.7–0.9. The study found that employees in commercial banks in the Jigjiga district of Ethiopia were evaluated by personnel in higher positions than them. The overall Cronbach’s alpha (91.5%) with twenty-seven items and four dimensions indicates that the instrument designed and used for this research was highly reliable. Correlation analysis examined the relationship between productivity and performance appraisal, while regression analysis assessed the impact on employee productivity. The results of the hypothesis suggest a significant relationship between the perception of the appraisal system and employee productivity. The study suggests that the commercial bank should adopt a performance appraisal system to enhance employee productivity.