Professional Documents
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Opportunities and Problems On Employee Performance Management System in Awash Bank
Opportunities and Problems On Employee Performance Management System in Awash Bank
DEPARTMENT OF MBA
APRIL 2023
HARAR, ETHIOPIA
ii
OPPORTUNITIES AND PROBLEMS ON EMPLOYEE
PERFORMANCE MANAGEMENT SYSTEM IN AWASH
BANK.
BY: XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Performance management system has become the backbone of any organization specifically in
competitive industries like banking, pharmacy etc. wherein increasing cut throat competition is new
buzzword and survival of the fittest has become the realities of the day [1]. Performance management
is a total company system, built into all HR activities concerned with looking to the future, to
improvements, challenges and opportunities. Performance management is a continuous process,
integrated totally with the way the organization is run [2]. Performance management system is
considered to be one of the strongest tools for developing human asset as it lays the foundation for
training, promotion, career planning and competency mapping etc.
Performance management is a means of getting better results by providing the means for individuals to
perform well within an agreed framework of planned goals, standards and competency requirements
It exist for establishing shared understanding about what is to be achieved, and for managing and
developing people in a way that increases the probability that it will be in the short and longer term
Performance management requires that managers ensure that employees’ activities and outputs are
congruent with the organization’s goals and, consequently, help the organization gain a competitive
advantage. Performance management therefore creates a direct link between employee performance
and organizational goals and makes the employees’ contribution to the organization explicit [3].
organization is judged by its performance. Organizations can perform well or poorly due to external
forces however, the majority of economists and commentators agree that the biggest influence on
organizational performance is the quality of the labor force at all levels of the business. Teams of
highly skilled, trained and motivated employees will nearly always overcome most of the difficulties
created by external forces while a poorly motivated, untrained and unskilled labor force will nearly
always fail to take advantage of favorable external opportunities. Given this situation, it could be
argued that the most important role for human resources (HR) is to raise the performance of
employees in the organization. To do this, employees’ performance has to be managed and this is not
an easy job”.
It is understood that worldwide is as of now creating at a really high rate, agreeing to Arup
(2008) this perpetually leads to the creation of multinational enterprises. With these
improvements, the HR systems are displayed with unique challenges, particularly as
organizations that is transferring and implementing financial and technical systems to new
locations. Therefore, organizations are confronted with the urgent need to ensure that their
employees are creating value for their time and worth in order to catch up with the competition
in the globalized economy. This in turn has made it vital for the HR divisions in organizations to
create robust or healthy PMS in a proposal to promote the effectiveness and efficiency of the
representatives.
According to Sahu (2007) PM could be a noteworthy and valuable enhancement within the
scope of human asset within the organization to enhance the performance of employees. There
are different points of view in which performance can be characterized; the significance of
characterizing performance stems from the reality that for it to be measured or overseen at that
point it should be characterized. For one, performance can be respected as the record of results
achieved and this on the person premise would boil down to the record of the achievements of a
representative. On the other hand, performance may be seen as behavior and thus defined from
work that an organization might adopt. Importance defining performance stems from the fact
that for it to be measured or managed at results, which can be compromised of by the frame
that point should be characterized. Armstrong (2006) notes that the major goals for coming up
with PMSs include correcting poor performance, sustaining good performance and improving
performance. There could be an expected difference in terms of performance or activity between
organizations that have robust PMS and those that have not health PMS.
Now one may request whether the undergoing of PMS in an enterprise immediately makes its
employees productive. Even though the implementation of performance assessments is a positive
move in boosting organizational performance, there is however, the need for it to be constantly
revised and reconstructed for it to meet the changing needs of the current world Femi (2013).
While including both elements of behavior and results, the employee would be the generator of
the behavior and use it in the transformation of performance. The human resource manager
would therefore need to take into account the behavior (input) of the employee and their result
(outcomes) as they manage the performance of the organizational teams and/or individuals
Robert (2011). Performance management therefore is a “strategic and integrated process” which
helps organizations to establish a “culture of sustained success” through improving the
performance of their employees and also through the development of individual and team
abilities Caldwell (2004). Performance management is an essential ingredient in the facilitation
of organizational effectiveness.
So, considering the above concepts of performance management, the researcher motivated to observe the
performance management process of employees in Awash Bank Share Company how the company appraise
employees to achieve its goal and strategy. Thus, the study will give more emphasizes on PMS process according to
the theoretical concepts of the research. Here the research will be difference from other related study since it applied
conceptual framework that most of others will not adopt
1.2. Statement of the Problem
It is well known that an organization will achieve the desired objective having resources like materials,
information, capital and human resources. People as human assets are the “glue” that holds all the
other assets, such as financial and physical ones, together and guides their use to better achieve results.
Many organizations have identified that having their human resources as core competencies
differentiates them from their competitors and is a key determinant of competitive advantages
Without human resource other factors of production are useless and idle. Compared to other factors of
production Human resources is the only factor of production which produces more than its input,
mobile, can be motivated, gains more knowledge and skilled in the long run, where the other resources
goes depleting
Increasing competition from businesses across the world has meant that all businesses must be much
more careful about the choice of strategies to remain competitive. Everyone (and everything) in the
organization must do what is supposed to be done to ensure strategies are implemented effectively.
This situation has put more focus on effectiveness, that systems and processes in the organization be
applied in the right way to the right things to achieve results. Performance management provides the
way to managers to overcome and improve the sudden changes very soon
Therefore, in this competitive environment the need for improved performance of each individual and
teams working together to achieve organizational goals is the key to competitive advantage. To ensure
market competitiveness performance management system is highly desired to develop the capacity of
the employees and inspired them to put maximum effort in the realization of organizational goals.
The overall purpose of performance management is to develop and improve the performance. In
addition, managing the performance of employees will contribute a lot to the overall performance of
the organization. As a result, it is important to assess the actual practice of performance procedure and
document and also challenges which is faced in the performance management system.
This research this will be initiated with the intention to assess practices and challenges of employee
performance management at Awash Bank in Harar area. Awash Bank will be committed to best
realizing of stakeholders’ values through enhanced financial intermediation globally and supporting
national development priorities by deploying highly motivated, skilled and disciplined employees. The
development of the bank and expanding bank industry in the country leads to the needs to highly
qualified and competent human resource in the industry. Therefore, Awash Bank will be need a well
developed and implemented performance management system to be competitive in the international
market, to enhance the performance of its employees and to provide highly motivated, skilled and
disciplined employees to the industry. Many organizations install performance management system
formally and informally in their organization, with the motivation to achieve better organizational
results. In practice, organizations have difficulty in implementing a performance management system
because its different dimensions are not taken into considerations enough.
2. 1. How does employee performance management system is practiced in the Awash Bank?
3. 2. What purpose does the performance management system have in Awash Bank?
4. 3. What are the challenges in implementing employee performance management system at the
bank?
1.4. Objectives of the Study
The general objective of this study will be to find out the practices and challenges of performance
management at Awash Bank and to suggest possible solution for the actual problems.
The study will focused on Awash Bank Share Company Harar City District only. All except non-clerical
employees will be involved in the questionnaires that will be conducted. In addition to this, the study will address
only literature concepts related to Opportunities and Problems of performance management systems of
employees, and apply stratify sampling technique to distribute the intended questionnaires.
CHAPTER TWO
Armstrong and Baron [9] further elaborated that PM is: as strategic in the sense that it is
concerned with the broader issues facing the business, concerned with performance improvement
in order to achieve organizational, team and individual effectiveness, and concerned with
development, which is perhaps the most important function of performance management.
Organizations, as stated by Lawson [10], have to get the right things done successfully.
Performance is not only about what is achieved but also about how it is achieved.
Information collected by a PMS can be for different purposes. Aguinis [3] asserted that
performance management system can serve for the following purposes: strategic, administrative,
information, developmental, organizational maintenance, and documentation.
2.1 Introduction
Beneath this, the study comprised literature review that had relevancy with
performance management. The literature concepts briefed about performance
management process, performance management system and adoption. In addition to
this, it emphasized the general frame work of the research, which the study adopted to
assess performance management in ABSC.
Performance management is a process for evaluating and improving execution based on the
agreement of objectives, competence necessities and advancement needs, the measurement of
accomplishments and execution in connection to those needs and the agreement of new
objectives and improvement plans on the basis of that measurement Armstrong (1999).
Observing from the definition, performance management is an integrated process, links the
organization objective with the teams and individual core competences as well as integration of
different aspects of HR management including, organizational development, HR development,
reward and recognition to ensure excellence in the management and development of people.
Here are two definitions, Armstrong and Aguinis, shown for comparison and for the purpose of
this paper.
Armstrong defines Performance management as strategic in the sense that it is concerned with
the broader issues confronting the business if it is to function effectively in its environment, and
with the general direction in which it intends to go to achieve longer-term objectives Armstrong
(2006).
Performance management requires that managers ensure that employees’ activities and outputs are
corresponding with the organization’s goals and, consequently, help the organization gain a
competitive advantage. Performance management therefore creates a direct link between employee
performance and organizational objectives and makes the employees’ contribution to
the organization explicitly. Subsequently, performance management is a tool which enables to
improve organizational performance by clearly aligning the common objectives and mission of
the organizations with each individual/team goals. Aligning the common goal and objectives
means that everything people do at work leads to outcomes that further the achievement of
organizational goals.
Performance Management is integrated in two senses: (1) vertical integration, linking or bring
into line business, team and individual objectives with core/essential competences; and
(2) horizontal integration, linking different aspects of human resource management, especially
organizational development, human resource development, and reward, so as to achieve a
comprehensible method to the management and development of people. PM is not an
examination occasion, but a progressing process including performance planning, performance
execution, performance assessment, performance evaluation and Performance review. PM
focuses on future execution planning and enhancement and personal improvement. It is clear that
performance management enhances teams and individual capacities of individuals and of
organizational in general.
Performance Management System (PMS)
Performance Management Systems can be defined as follows:
“the evolving formal and informal mechanisms, processes, systems, and networks used by organizations
for conveying the key objectives and goals elicited by management, for assisting the strategic process and
ongoing management through analysis, planning, measurement, control, rewarding, and broadly managing
performance, and for supporting and facilitating organizational learning and change” Ferreira &
Otley( 2009).
PMS can be specified as a main process which allows transforming basic strategic priorities, values and
particularly objectives of the company into performance or into particular objectives of every employee. It
is based on the principle of interconnection of company performance management which defines key
measures of performance into the highest level of management up to the level of particular objects of
management and an individual system of performance management which defines both particular work
objectives and required work conduct on the level of particular work positions.
According to Armstrong (2009) Performance management system refers to a set of interrelated activities
and processes that are treated holistically as an integrated and key component of an organization’s approach
to managing performance through people and developing the skills and capabilities of its human asset, thus
enhancing organizational capability and the achievement of sustained competitive advantage.
In general, performance management system is the key factor used in determining whether an organization
can manage its HR and talent effectively.
Performance management provides information on who should be trained and in what areas, which
employees should be rewarded, and what type of skills are lacking at the organization or unit level.
This is the performance planning process where individual objectives are linked to
organizational goals, mission and objectives.
It is the typical starting point where goal-setting usually occurs in line with annual standard
review cycles. Both practice and theory have focused on the nature of objectives, and how they
are defined and expressed. Enhancing communications within the organization help employees
understand of the objectives and the business plan, and also in a position to contribute to their
formulation; this requires that both the supervisor and employee participate fully in the objective
setting phase, monitoring of outcome and the evaluation stage. More importantly, it should
address clarity, openness, and fairness; it should also recognize productivity through rewards;
and be cognizant of appraiser leadership qualities Yee & Chen (2009).
opportunities, decrease employee turnover and clarifies supervisors’ expectations. From the
perspective of managers, good systems allow them to gain insight into employees’ activities and
goals, allow for more fair and appropriate administrative actions, allow them to communicate
Organizational goals more clearly, let them differentiate good and poor performers, help drive
organizational change, encourage voice behavior, PM is used to align the organizational culture
with the goals and objectives of the organization to make change possible. Employees are
provided training in the necessary skills and are rewarded for improved performance so that they
have both the knowledge and motivation to improve product quality and customer service and
improve employee engagement. Finally, from the perspective of the HR function, a good system
provides protection from litigation and can also help minimize employee misconduct which can
have so many negative consequences for the organization.
2.7. Leadership Commitment to Performance Management
The success of performance management practices in any organization depend upon the commitment
and involvement of the different stakeholders like top management, line managers, Employees and
the HR specialists. Commitment is a leadership quality that inspires and attracts people. It shows that
the leader has convictions and that he/she believes in the cause.
There are four groups of people whose commitment to performance management is crucial to its
success: top managers, line managers, employees and HR specialists Armstrong (2006).
2.8.1. Top Managers
Top managers take the lead: set the direction, act as role models and define and act upon core
values relating to performance. It is their job to convince everyone that they believe performance
management plays a key role in ensuring that business goals are achieved. Top managers must
demonstrate by their behavior that performance management is indeed about managing the
business.
It is the responsibility of top managers to develop a high-performance culture, which means
ensuring that:
They communicate a clear sense of mission underpinned by values, and a culture
expressing what the firm is and its relationship with its customers and employees,
A clear line of sight exists between the strategic aims of the business and those of its
departments and its staff at all levels;
Their expectations are defined and communicated to everyone in the shape of goals
for success, performance improvements and core values;
Leadership is provided that encourages a shared belief in the importance of
continuing improvement.
Top management has a crucial role to play in implementing performance management. They
have to communicate and act on the belief that performance management is an integral part of
the fabric of the managerial practices of the organization. They should demonstrate their
conviction that this is what good management is about and this is how managers are expected to
play their part.
2.8.2. Role of Line Managers
Line management plays a key role in terms of implementing and enacting HR policies and
practices. Line managers also bring policies to life. An important consideration in designing and
operating performance management is how to achieve this by gaining their commitment and
ensuring that they have the skills required.
Performance management works very well with managers who are competent and possess the
right attitude. Those managers who are less competent with the behavioral requirements of their
role find it difficult, as this approach requires them to make some business judgements and
discuss the rationale for them.
2.8. Communications Strategy and Performance Management
A performance management system can be an excellent communication device. Employees are
informed about how well they are doing and receive information on specific areas that may need
to be improved. Also, related to the strategic purpose described above, performance management
systems are a conduit to communicate the organization’ s and the supervisor’ s expectations and
what aspects of work the supervisor believes are most important Smither & London (2009).
Internal and external communications is a key tool for every organization while doing a business
in order to accomplish its intended achievements and results.
The strategy for managerial communications is concerned with planning and control procedures,
management information systems and techniques of delegating and
13
giving instruction Armsrong (1999). Communications from management should be about values,
plans, intentions and proposals as well as about achievements and results.
The strategy for internal communications should be based on analyses of:
The concept ‘what management wants to say,’ based upon an assessment of what workers need
Management usually aims to achieve: to get employees to understand and accept what
management proposes to do in areas that affect them; to obtain the commitment of employees to
the objectives, plans and values of the organization; and, to help employees to appreciate more
clearly the contribution they can make to organizational success and how it will benefit them.
In general, having good knowledge of the PMS leads to greater employee acceptance and
satisfaction. Organizations often design a communication strategy to ensure that information
regarding the performance management system is widely disseminated in the organization
Aguinis (2014). According to Aguinis, a good communication strategy consists of the following:
a) Performance management Provides general information about performance management,
how performance management systems are implemented in other organizations, and the
14
general goals of performance management systems.
The purposes for a given PMS should to be decided by considering business needs, organizational
culture and the system’s integration with other human resource management systems. In general,
PMSs can serve six important purposes Aguinis (2014)
1. Performance Management Systems assist management achieve the strategic of
organizational goals and objectives by connecting the organizational goals with an
individual goal.
The second prerequisite is understanding the job undergoing which is done through job analysis.
Job analysis is a process of determining the key components of a particular job, including
activities, tasks, products, services, and processes. A job analysis is an important prerequisite of
any performance management system. We have to know what an employee is supposed to do on
the job, in order to know what needs to be evaluated and how to do so Aguinis (2014).
Stage 2. Performance Planning
Performance planning is the base of an effective PMS. In short, Performance planning involves
cascading organizational goals to individual goals, agreeing objectives, competency
requirements, and personal development plans. Performance management is a mechanism to join
together individuals’ performance with an organizational performance through aligning
organizational goals with individual goals. It is used to create a shared vision and goals of the
organization, and to help each individual employee to understand and recognize their part in
contributing to organizational performance.
The performance management cycle regularly starts with a discussion of what is expected of
employees in terms of results and behaviors. This step is vital since it makes a difference
individual understand what is expected of them, requires articulating assessment standards, in
this manner increasing transparency and reasonableness or fairness. Research has shown that it is
important for employees to perceive that the PMS is reasonable, which mitigates negative
feelings related with less favorable results Varma, Budhwar & DeNisi (2008). Performance
planning is the primary cycle where supervisor and representative or employee meet to discuss
and agree on what is to be done and how it is to be done by combining the behavior, result and
development plan.
the ranges in require of development, and they give an action plan to improve in areas of
shortcomings and further encourage develop areas of strength. And it makes employees to
distinguish how persistently or continually learn and develop, to see the possibility of being
better in the future and helps them to avoid performance issues confronted in the past. At the
beginning of the performance management cycle, it is vital to review with employees their
performance expectations, including both the behaviors workers are expected to exhibit and the
results they are anticipated to realize during the upcoming rating cycle. We are all familiar with
employees who may accomplish exceptional results but are extremely difficult to work with,
unhelpful or exhibit maladaptive behaviors at work. Since such behaviors can be extremely
troublesome behavior is critical to consider in most work circumstances.
On the other hand, an employee can be extremely helpful, considerate and interpersonally
effective, yet never achieve any important results Pulakos (2004).
Performance planning is a discussion between supervisor and worker with the agenda of
upcoming year to agreement on individual’s key job obligations, developing a common
understanding of the specific objective that needs to be achieved, the standards that will be used
to evaluate how well the employee has achieved each objective, identifying the most important
competencies and elements of the development plan the subordinate will complete during the
year Grote (2002).
While conducting the performance planning cycle, there are some responsibilities which will be
expected both from the supervisor and the employee before the discussion and during the
discussion. The obligations of the supervisor before the meeting is first to review the
organization’s mission, vision and values statement and department’s goal, the second one is
reading the workers job description and thinking about the goals and objectives which the
employees is anticipated to attain in the appraisal period. The third and the fourth responsibilities
of the supervisor is identifying the most vital capabilities and deciding what reflection
should be taken to the successfulness of execution in each area respectively.
3.2. Ongoing performance feedback and coaching: The employee should not wait until the
review cycle is over to solicit performance feedback. Also, the employee should not wait until a
serious problem develops to ask for coaching. The employee needs to take a proactive role in
soliciting performance feedback and coaching from her supervisor.
3.3. Communication with supervisor: Supervisors are busy with multiple obligations. The burden
is on the employee to communicate openly and regularly with the supervisor.
3.4. Collecting and sharing performance data: The employee should provide the supervisor with
regular updates on progress toward goal achievement, in terms of both behaviors and results.
3.5. Preparing for performance reviews: The employee should not wait until the end of the
review cycle approaches to prepare for the review. On the contrary, the employee should engage
in an ongoing and realistic self-appraisal so that immediate corrective action can be taken if
necessary. The usefulness of the self-appraisal process can be enhanced by gathering informal
performance information from peers and customers (both internal and external).
On the other hand, Smither & London (2009), has mentioned the following responsibilities
of supervisor in the execution stage of performance management system:
‘’It is important that both the employee and the manager take ownership of the assessment
process. The manager fills out her appraisal form, and the employee should also fill out his
form. The fact that both parties are involved in the assessment provides good information to
be used in the review phase. When both the employee and the supervisor are active
participants in the evaluation process, there is a greater likelihood that the information will
be used productively in the future. Specifically, the inclusion of self-ratings helps emphasize
possible discrepancies between self-views and the views that important others (i.e.,
supervisors) have of our behavior’’ Auginis(2014).
Employee involvement in the process increases employee ownership and commitment to the
system. The benefit of self-appraisal is to reduce an employee’s defensiveness during the
assessment meeting and also increase employee’s satisfaction and trust in the performance
management system. The time for the formal performance appraisal nears, the manager reflects
on how well the subordinate has performed over the course of the year, assembles the various
forms and paperwork that the organization provides to make this assessment, and fills them out.
Performance assessment is one of the most important processes in PMS in which supervisors are
assessing their subordinates regarding their performance in the past which lays a ground for
keeping the strength and improving on the weaknesses and working on the development plan for
the future. Managers often complain that evaluating someone’s performance is difficult. The
reason that they find it difficult is usually that they have not done a good job of performance
planning at the beginning of the year. If a manager has not held a planning discussion at that
time, it’s difficult to evaluate performance at the end of the year.
360-Degree Feedback System
The360-degree feedback system has become a better device for helping difference employees,
especially those in supervisory roles, improve execution by gathering information on their
execution from diverse groups. These systems are known as 360- degree systems since
information is accumulated from people all around the worker. Particularly, information on what
performance measurements may well be moved forward is accumulated from bosses, peers,
clients, and subordinates. This information is as a rule collected namelessly/ secretly to minimize
rating inflation. Employees also rate themselves on the different execution measurements and
compare self-perceptions with the information given by others. A gap investigation is conducted
to look at the areas for which there are huge inconsistencies between self-perceptions and the
recognitions of others. A 360-degree feedback system report usually includes information on
dimensions for which there is agreement that further development is needed Auginis (2014).
23
Providing feedback in an effective manner is extremely important because it leads not only to
performance development but also to employee satisfaction with the system, through which the
five primary performance management elements measurement, feedback, positive reinforcement,
exchange of views, and agreement can be put to good use. Individuals should be encouraged to
assess their own performance and become active agents for change in improving their results.
Among distinctive objective of performance review the followings are a few of them which can
be said as the foremost vital one Smither & London (2009).
1. It gives motivation to provide positive feedback, recognition, praise and opportunities for
growth; to clarify expectations; to empower people by encouraging them to take control over
their own performance and development.
2. It encourages development by providing a basis for developing and broadening capabilities
significant both to the current role and any future role that the employee may have the potential
to carry out. Note that improvement can be centered on the current part, empowering individuals
to broaden and enhance the extent of their duties and the aptitudes they require, and to be
remunerated in like manner.
3. It gives a chance for communication to serve as a two-way channel for talking about roles,
expectations (objectives and capability requirements), relationships, work, problems and
aspirations.
This final stage of performance management process is similar to the performance planning
component. The main difference is that the renewal and re-contracting stage uses the insights and
information gained from the above-mentioned phases. The researcher has drawn a lesson from
these processes that performance management process includes a cycle that starts with
prerequisites and ends with performance renewal and re-contracting. The cycle is not over after
the renewal and re-contracting stage. Of course, the process starts all over again: which means
there needs to be a discussion of prerequisites, including the organization’s mission and strategic
goals.
This is due to markets change, customers’ preferences and needs change, and products change,
there is a need to continuously monitor the prerequisites so that performance planning, and all
the sub- sequent stages, are consistent with the organization’s strategic objectives Aguinis
(2014).
There are numerous preferences related with the usage of a PMS within the organizations.
According to Aguinis (2009) a PMS can make the following vital contributions:
Self-esteem is increased. Accepting input around one’s performance fulfills an essential have to
be acknowledged and esteemed at work. This, in turn, is likely to extend employees’ self-
esteem.
Managers gain insight about subordinates. Direct supervisors and other managers in charge of
the appraisal gain new insights into the person being appraised.
The definition of job and criteria are clarified. The work of the individual being assessed may be
clarified and characterized more clearly. In other words, employees gain a better understanding
of the behaviors and results required of their specific position
Self-insight and advancement are improved. The participants in the system are likely to develop
a better understanding of themselves and of the kind of development activities of value to them
as they progress through the organization. Participants in the system also gain a better
understanding of their strengths and weaknesses, which can help them better define future career
paths.
Administrative actions are fairer and more appropriate. Performance management systems
provide valid information about performance that can be used for administrative actions such
a
merit increases, promotions, and transfers as well as terminations. Organizational goals are made clear.
The objectives of the unit and the organization are made clear, and the representative gets it the
connect between what he or she does and organizational victory. Usually a commitment to the
communication of what the unit and the organization are all almost and how organizational objectives
cascade down to the unit and the person representative. PMSs can offer assistance progress worker
acknowledgment of these more extensive objectives (i.e.,
organizational and unit level). employees by establishing developmental plans.
There is better protection from lawsuits. Data collected through PMSs can help document
compliance with regulations. When PMSs are not in place, arbitrary performance evaluations
are more likely, resulting in an increased exposure to litigation.
Employee misconduct is minimized. Employee misconduct is an increasingly pervasive
phenomenon that has received widespread media coverage. Such misconduct includes
accounting irregularities, churning customer accounts, abusing overtime policies, giving
inappropriate gifts to clients and potential clients hoping to secure their business, and using
company resources for personal use.
There is better and timelier differentiation between good and poor performers. PMSs allow
for a quicker identification of good and poor performers. Also, they force supervisors to face
up to and address performance problems on a timely basis (i.e., before the problem is too
costly and cannot be remedied).
Supervisors’ views of performance are communicated more clearly. PMSs allow managers to
communicate to their subordinates their judgments regarding performance. Thus, there is greater
accountability in how managers discuss performance expectations and provide feedback.
Organizational change is facilitated. PMSs can be a useful tool to drive organizational change.
Employees are provided with training in the necessary skills, and are also rewarded for improved
performance so that they have both the knowledge and the motivation to improve product quality
and customer service. Finally, motivation, commitment, and intentions to stay in the organization are
enhanced
Conceptual Framework
Almost all the literature review and the existing ‘Coaching for performance’ model agree on
areas that performance management is concerned with identification of organizational visions,
missions and goals, bringing managers and employees on the same side towards the achievement
of organizational strategic objectives/alignment, provision of coaching and periodic performance
review, final performance evaluation, and attaching results with reward and/or punishment
depending on the nature of result.
The variables under study will be represented diagrammatically to show the performance
management system as drawn from the literature review here under.
✔ and objectives. This is the performance planning process where individual objectives are
Change signs from Performance Management: This is where individuals change their behaviors
according to their expected satisfaction in attaining convinced goals. a good PMS increases motivation
and self-esteem, helps improve performance, clarifies job tasks and duties, provides self-insight and
development opportunities, decrease employee turnover and clarifies supervisors’ expectations Aguinis
(2013).
Leadership commitment to performance Management- The success of performance management practices
in any organization depend upon the commitment and involvement of the different stakeholders like top
management, line managers and supervisors.
Communication of strategy and Performance Management: Organizations often design a communication
strategy to ensure that information regarding the performance management system is widely disseminated
in the organization
Source: Adopted from the literature,
M. Khasro Miah and Chowdhury Golam Hossan (2012) have conducted an empirical study on
performance management system in UK retail industry found that implementation of
CHAPTER THREE
RESEARCH METHODOLOGY
The purpose of this research will be to assess the opportunities and problems of employee
performance management system of Awash Bank District of Harar City. This chapter provides
an overview of the rationale and the theoretical justification for the study design, materials and
methods that will used. It will encompass discussion on data type, source and collection
techniques, methods of analysis and presentation used to qualify the data.
3.1. Research Design
Research design will be defined as;
“A research design is the arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in procedure”.
Kothari (2004)
A descriptive survey is a design that involves establishing what is happening as far as a particular
variable is concerned. For this purpose, both primary and secondary data will be conducted.
Primary data sources will be used that include managers, middle level management, and support
employees in all. The descriptive research methods will used to describe as well as explain the
assessment of employee performance management system, in the case of Awash Bank Harar
City district.
The five-point Likert scales (i.e., Strongly Agree, Agree, Moderate Agree, Disagree, Strongly
Disagree) have been introduced in the questionnaire to obtain and measure the responses of
the respondents. Finally, based on the data type acquired, tables will be introduced to present
the data in such a way that they will give meanings for the study. Based on the data type,
tables will be introduced to present the data in such a way that they will give meanings for the
study.
3.2. Data Source
Data will be collected from primary sources using questionnaires. Secondary data will be
gathered from published and unpublished theoretical literatures. Books, research findings,
internet sources, articles & journal will be reviewed as secondary sources to get various concepts
and ideas related with study. Specifically, Primary sources will be used to acquire from the
Awash Bank employee’s response.
3.3. Method of Data Analysis
The study will be applied a descriptive type of analysis using SPSS software version 21. The
collected data will coded and edited carefully. A descriptive analysis will be used to describe the
features of variables. In order to posit the responses quantitatively, the study used percentage,
frequency and mean using tabular form.
3.4. Data Collection Methods
Data will be collected by way of a survey questionnaire that will be adopted by the researcher to
allow responses gathered in a standard way, bringing out objectivity and to present data
numerically. The questionnaire used a five-point Likert scale. The advantages of using the Likert
is that it is simple to construct questionnaire, easy to read and complete.
There are several methods for determining the sample size. In this paper the researcher will
presente a simple formula from (Yamane 1967) to determine the sample size. This formula can
be used to determine the minimal sample size for a given population size.
n= 1/1+N(e)2
Where:
n = sample size
N = population size
e = the level of precision
This formula assumes a degree of variability (i.e. proportion) of 0.5 and a confidence level of 95%.
n= 203/1+203(0.05)2
CHAPTER FOUR
WORK PLAN
The following table shows the timeline to be followed to complete this proposed study.
Table 2: Work Plan
S.N. Activities Time
1. Conducting literature review and preparing and presenting April 2023
research proposal
2. Preparing data collection instruments and getting approval of
advisors
3. Contacting and getting permission from sample universities May 2023
BUDGET BREAKDOWN
The budget for this study will be obtained from personal expense
Table 3: Budget Breakdown
Personnel Expenses
Transport Costs
No. Mode of No. of Departure Destination Unit Total
Transportation Days/Rounds price Cost
1. Vehicles/Car - - - - 4,200.00
Rent/Transport
Sub-total 4,200.00
Budget Summary
No. Categories Sub-total/in Birr
1. Personnel Expenses 40,800.00
Appendix A
APPENDICES