EFFECT OF EMPLOYEE PERFORMANCE MANAGEMENT ON EMPLOYEES’ JOB PERFORMANCE IN DASHEN BANK S.C.

Abstract

This thesis investigates the effects of performance management on employee job performance at Dashen Bank S.C. in Ethiopia. Performance management refers to the systems and processes organizations use to manage employee performance and productivity towards achieving organizational goals. The main objective of the study was to examine how performance management practices such as goal setting, performance appraisal, feedback, training, and reward systems impact employee job performance at Dashen Bank. The study uses a descriptive and explanatory research design with a mixed methods approach, collecting qualitative and quantitative data through questionnaires and interviews. The sample consisted of 300 employees of Dashen Bank selected through simple random sampling. Data was analyzed using descriptive statistics, correlation analysis, and regression analysis. The findings indicate that performance management practices have a significant positive effect on employee job performance at Dashen Bank. In particular, aligning individual and organizational goals, employee involvement in performance planning, fair and accurate performance evaluations, regular coaching and feedback, and motivational rewards were key elements that enhanced job performance. The major challenges identified include unclear performance expectations, insufficient coaching and feedback, biased appraisals, and unfair reward systems. The study concludes that implementing an effective performance management system improves employee job performance. It recommends that the bank strengthen practices such as setting clear goals, increasing employee participation, delivering regular feedback, and linking rewards to performance. The findings provide insights into designing performance management systems to optimize employee productivity in banks and related service organizations.