THE EFFECT OF HUMAN RESOURCE MANAGEMENT PRACTICE ON

EMPLOYEESPERFORMANCE ATDEVELOPMENT BANK OF ETHIOPIA: IN

CASE OF ADDIS ABABA CITY BRANCHES

By: BEKALU YESHA SIRAYE

Major Adviser: GARI UMETA (ASS.PROF)

Co-Adviser: SHISHAY TEFERE (MA)

HAWASSA UNIVERSITY, HAWASSA, ETHIOPIA

JUNE, 2020

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 THE EFFECT OF HUMAN RESOURCE MANAGEMENT PRACTICE ON
EMPLOYEES PERFORMANCE AT DEVELOPMENT BANK OF ETHIOPIA: IN
CASE OF ADDIS ABABA CITY BRANCHES.

BY

BEKALU YESHA SIRAYE

A THESIS SUBMITTED TO THE

COLLEGE OF BUSINESS AND ECONOMICS,

DEPARTMENT OF COOPERATIVE,

SCHOOL OF GRADUATE STUDIES

HAWASSA UNIVERSITY, HAWASSA, ETHIOPIA

IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE

MASTER OF ARTS IN

COOPERATIVE DEVELOPMENT & LEADERSHIP

JUNE, 2020

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Advisors’ Approval Sheet

This is to certify that the thesis entitled, “THE EFFECT OF HUMAN RESOURCE
MANAGEMENT PRACTICE ON EMPLOYEES PERFORMANCE: THE CASE OF
DEVELOPMENT BANK OF ETHIOPIA‟ ‟submitted in partial fulfilment of the
requirements for the Degree of Master of Arts in Cooperatives Development& Leadership,
the Graduate Program of the Department of Cooperatives, and has been carried out by
BEKALU YESHA under our supervision. Therefore, we recommend that the student has
fulfilled the requirements and hence hereby can submit the thesis to the Department.

Major Advisor Signature Date

Gari Umeta (Ass.Prof) _______________ ____________

Co- Advisor Signature Date

Shishay Tefere (M.A) ________________ ____________

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DECLARATION

I hereby declare that this M.A. thesis entitled, “THE EFFECT OF HUMAN RESOURCE
MANAGEMENT PRACTICE ON EMPLOYEES PERFORMANCE: THE CASE OF
DEVELOPMENT BANK OF ETHIOPIA‟‟ Is my original work and has not been presented
for a Degree/Diploma in any other university, and all sources of material used for this thesis
have been acknowledged.

Name: BEKALU YESHA SIRAYE

Signature: _______________________

This M.A. thesis entitled, “THE EFFECT OF HUMAN RESOURCE MANAGEMENT

PRACTICE ON EMPLOYEES PERFORMANCE: THE CASE OF DEVELOPMENT
BANK OF ETHIOPIA”has been submitted for examination with our approval as Thesis
advisors.

Name of the Advisor: GARIUMETA (ASS.PROF)

Signature: ______________

Name of the Co- Advisor: SHISHAY TEFERE (M.A).

Signature: ______________

Place and Date of Submission: Hawassa University ___________

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 ACKNOWLEDGMENT

{ First and foremost I would like to thank God for lighting my way, granting me the strength,
courage, patience and inspirations in completing this study.

This Work has been a result of a collective Effort of a number of people. The list is too long
to allow individual acknowledgement. I would very much like to express my warm gratitude
to my advisors Gari Utama and Shishay T.for their guidance, encouragement and continuous
patience. I would also like to extend my appreciation to all instructors at Hawassa University
College of Business and Economics sharing their knowledge and experience with us.

I would also like to extend my special appreciation to all the staff of Development Bank of
Ethiopia and who assisted me in conducting my research either by providing me with all
relevant information / being part of the research as a respondent.

Lastly, with no regard to the order, I would like to thank My Family, my close friends, and
also my classmates who took part in this research paper one way or another.

MAY GOD BLESS YOU ALL

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Table of Contents
ACKNOWLEDGMENT .......................................................................................................................... v
Table of Contents .................................................................................................................................... vi
List of figures .......................................................................................................................................... ix
List of Table ............................................................................................................................................ ix
Abbreviations and acronyms .................................................................................................................... x
ABSTRACT ............................................................................................................................................. XII
CHAPTER ONE: INTRODUCTION ...................................................................................................... 1
1.1. Background of the Study ........................................................................................................ 1

1.2. Statement of the Problem ....................................................................................................... 3

1.3. Research Questions ................................................................................................................ 5

1.4. Research Hypothesis .............................................................................................................. 6

1.5. Objectives of the Study .......................................................................................................... 7

1.5.1. General objective ............................................................................................................ 7

1.5.2. Specific objectives.......................................................................................................... 7

1.6. Scope of the Study.................................................................................................................. 7

1.6.1. Content scope ................................................................................................................. 7

1.6.2. Geographical scope ........................................................................................................ 7

1.7. Limitation of the Study .......................................................................................................... 8

1.8. Significance of the Study ....................................................................................................... 8

1.9. Operational definition of concepts ......................................................................................... 9

1.10. Organization of the Paper ................................................................................................... 9

CHAPTER TWO: LITERATURE REVIEW......................................................................................... 10

2.1 The Concept and definition of Employee Performance ....................................................... 10

2.2. The Concept and definition of Human Resource Management ........................................... 10

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 2.3. Human Resource Management Practices concepts and definition. ...................................... 11

2.4. Measures of performance ..................................................................................................... 11

2.5. Determinants of Employees Performance ............................................................................ 13

2.5.1. Training ........................................................................................................................ 13

2.5.2. Working Environment................................................................................................... 17

2.5.3. Leadership .................................................................................................................... 22

2.5.4. Empowerment .............................................................................................................. 24

2.5.5. Reward ......................................................................................................................... 26

2.6. Summary of the Literature review........................................................................................ 29

2.7. Conceptual Framework ........................................................................................................ 30

CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY ................................................ 31

3.1. Research Design ................................................................................................................... 31

3.2. Tools & Methods of Data Collection ................................................................................... 31

3.3. Data Collection..................................................................................................................... 32

3.4. Sampling procedure and techniques ..................................................................................... 32

3.5. Data Processing and Analysing ............................................................................................ 34

3.6. Reliability of the Instrument................................................................................................. 35

3.7. Validity of the Instrument .................................................................................................... 35

CHAPTER FOUR: RESULTS AND DISCUSSION ................................................................... 37

4.1. Demographic Characteristics of Respondents ...................................................................... 38

4.2. The Effect of Human Resource Management Determined Practice on Employee

Performance at Development Bank of Ethiopia. ............................................................................. 42

4.2.1. Descriptive Statistics ........................................................................................................ 42

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 4.2.2. Correlation Analysis ......................................................................................................... 53

4.2.3. Regression Analysis ......................................................................................................... 57

4.2.3.1. Simple Linear Regression Analysis .......................................................................... 57

4.2.3.2. Multiple Linear Regression Analysis ....................................................................... 61

4.2.4. Test of Multi-Collinarity and Hetrosidascity ................................................................... 64

CHAPTER FIVE: SUMMARY, CONCLUSIONS AND RECOMMENDATION ......................... 65

5.1. SUMMARY ......................................................................................................................... 65

5.2. CONCLUSION .................................................................................................................... 67

5.3. RECOMMENDATION ....................................................................................................... 68

5.4. Suggestion for Further Research .......................................................................................... 70

Reference ......................................................................................................................................... 71

Annex – 1 –Questioners............................................................................................................... 75

Annex – 2; Correlation and Regression Analysis ........................................................................ 86

Annex – 3; Normality Assumptions of Multiple Linear Regression; .......................................... 89

Annex – 4; Linearity Assumption of MLR .................................................................................. 90

Annex – 5; Multi-collinearityand Heteroscedasticity assumption ............................................... 91

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 List of figures

Figures No Page No

Figure 2.1: Conceptual Framework…………………………………………………........................…63

Fig. 4.1: Marital status of Respondents……………………………………………............................75
Fig. 4.2: service year of respondents………………………………………......................….76

List of Table

Table No Page No

Table 3.1: List of Sample size…………………………………………………............….....36

Table 3.2: Variables of the study………………………………………………………………….............37
Table 3.3: Reliability Analysis of Variables ……………………………...............................38
Table 4.1: Response Rate…………………………………………………………….............40
Table 4.2: gender distribution of respondents………………………………………………..............42
Table 4.3: Age Distribution…………………………………………………......................................42
Table 4.4: Education Distribution of respondents……………………………………………............43
Table 4.5: Employees response to Training practices……………………………………..........……47
Table 4.6: Employees response to Working environment………………………………...............…..49
Table 4.7: Employees response to Leadership practice…………………………….............51
Table 4.8: Employees response to Empowering practice…………………………………...........…..53
Table 4.9: Employees response to reward practice…………………………………........…..55
Table 4.10: Employees response to their performance…………………………………………..........57
Table 4.11: Correlation Analysis between Independent variables and Dependent Variable…........…60
Table: 4.12 ANOVA Regressions for Training and Employees‟ Job Performance……………..........64
Table: 4.13 ANOVA Regressions for Working environment and Employees‟ Job Performance…....64
Table: 4.14 ANOVA Regressions for Leadership and Employees‟ Job Performance……………......65
Table: 4.15 ANOVA Regressions for empowering and Employees‟ Job Performance……………....66
Table: 4.16 ANOVA Regressions for Reward and Employees‟ Job Performance………………..….67
Table 4.17 Multiple Linear Regression Model Summary……………………………………….……68
Table 4.18 ANOVA………………………………………………………………….……....68
Table 4.19 multiple linear Regression Coefficient………………………………………………....…69
Table 4.20 Summary of Hypothesis testing……………………………………………….....71

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 Abbreviations and acronyms

ANOVA; Analysis of Variance

H1: Alternative Hypothesis

DBE: Development Bank of Ethiopia

HRM: Human Resource Manage

MLRM; Multiple Linear Regression Model

NBE: National Bank of Ethiopia

HO: Null Hypothesis

Q: Question

SLRM: Simple Linear regression Model

SPSS: Statically Package for social since

VIF: Variance Inflation Factor

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ABSTRACT

The purpose of this paper was to examine The Effect of Human Resource Management determined Practice
on Employees Performance in case of Development bank of Ethiopia. Areas of HRM practices relating to
employee‟s training, working environment, leadership, empowerment and reward as covered under the
study. Hence in this present competitive world, management of human resources had been a matter of crucial
determination of success for the banking industry. Primary data were gathered from Addis Ababa city
branches. 132 responses were properly filled and returned. Data collected through structured questionnaires
wXIIere analysed through SPSS. Descriptive and inferential statistics of correlation and regression analysis
were used to analyse the collected data. Majority of respondents don‟t have good attitude toward training,
reward and empowerment. Multiple regression analysis and structural equation modelling were used to
predict the correlations. The findings of the study indicated that there was a strong casual effect between
independent variable (Excluding leadership) and dependant variable (employee’s performance).Pearson
correlation Coefficient (r) was used to determine the relationship between each independent variable with
the dependent variable. The correlation result indicated that there were positive relationship between all of
independent variables and the dependent variable, supporting all alternative hypotheses except hypotheses
3. Therewas no evidence to reject a statement which states leadership had no significant impact on
employee’s performance at DBE. This implies that excluding leadership, any increase or decrease on the
independent variable will bring corresponding change on employees’ job performance and it’s conclude
that that the independent variables has a 51.7% influence on the dependent variable while the remaining
48.3% were influenced by factors which were not covered in this study. The employees of DBE had no good
attitude to training , reward and empowerment Hence the Management should tightly review practiceof
training, empowering and rewarding in order to overcome limitations and to improve performance of
employees.

Keywords: Employees‟ Job Performance, Empowerment, Leadership, Reward, Training and Working
Environment.

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 CHAPTER ONE: INTRODUCTION

1.1. Background of the Study

Human Resource management practices have direct or indirect influence on employee‟s job
performance. Employee performance is a major concern in any economy worldwide(Buyens,
(2008). Different scholars give different definition to what does mean performance. Employee‟s
performance refers to the behaviour or practice that is expected in the line of the organizations
goal and the purpose under control of individual employees. Organizational Performance is the
level of how the activities serve the purpose (Armstrong, (2000). (Choudry, (2009) in his study of
Determinants of Labour Performance, notes that Africa and south Asian countries (except India)
performance in labour performance is not very encouraging. Labour productivity level in 2005 in
sub- Saharan Africa economies was the lowest among all regions. In the case of Ethiopia several
unpublished researches and few published researches have been done on determinant factor of
employees‟ job performance in different organization. One of the studies was conducted by
(Gebregziabher, H. (2009) on 128 Ethiopian Public Organizations and his study shows that the
employees‟ job performance has been affected positively or negatively by different factors.

Performance standards are designed by managements based on information from job analysis and
are a systematic process of determining the characteristics of job, skills and knowledge required to
performing jobs, and evaluate employee‟s performance based on the standard (Kirkpatrick
Donald, (2006). It indicated that there is no one type of system or set of objectives that is best
suited to meet desired performance for all organizations. Managements must design and
administer performance of employees in line with organization purpose and objective and also
they have to asses‟ factors affect employees Performance (Robert, (2010). Thesehelporganization
to achieve its strategic goals and objectives through. .Human resource is the most important
Resource to affect the performance in organizations (Stone, (2008), so they need wise handling by
managements.Organization has many resources among these; employees are the most valuable
assets of any organization without whom there is no productivity(Najanja, Maina and Najagi
(2013).Accordingly; effectively management of human resource should be seen by eyes ofeagle.
Performance of employees has been associated with creativity &innovative, rate of absenteeism
lateness, achievement of target, work on qualitatively and quantitatively, customer satisfaction”
(Mathis, Jackson (2009) and it is alsofollowingof the policies and procedures of the bank to meet
goals and objectives of organization.

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In the recent years, banking sector has been adopted wide-ranging organizational and structural
changes worldwide (GetamesayBirhane, (2016).They are the vital institution in the society as they
significantly contribute to the development of an economy through facilitation of Business. The
far-reaching competition and dynamic business atmospheres have developed and encouraged
demanding customers for better product and services. So it has also increased more demand for
employees to meet the requirements of this competitive Era (Masresha, (2014).Presently the
competition is going on sky high in the banking industry. Every single bank wished to face this
situation and emerge as victorious, but it was not as easy as one could imagine. But this could be
possible somewhat if a desire to work all together for transformation was made. Fast moving and
complex world of new techniques and skills had forced banks to consider it (Haile Kalayu, (2013).
every human being had potential to do remarkable things and to support him to understand,
develop and utilize his/her potential, the bank should provide them knowledge and emerging
climate as well as prospects. And this was possible only if efficient and effective Human Resource
management Practices, which would maximize value and minimize cost within the organization,
should be applied (MahmoodAsad and JomaMahfod, (2015). Hence in this, present competitive
world management of human resources had been a matter of crucial determination of success for
the banking industry

Development bank of Ethiopia (DBE) is one of government owned financial institutions engaged
in providing short, medium and long term development credits by financing viable projects.
DBE‟s distinguished feature is its “project” based lending tradition.

Employee performance has a significant effect on organizational performance. One of the studies
was conducted by Gebregziabher, H. (2009) on 128 Ethiopian Public Organizations and his study
shows that the employees‟ job performance affected mainly by age, ability, and reward in a
positive manner but training and education has adverse effect. Moreover, study employed by
Mulatu, (2014) it is also tested and proved that reward and training has significant positive effect
on employees‟ job performance. Another comparative study on private and public banks by Haile,
(2013) concluded that, training, empowerment, performance appraisal and promotion have
positive significant relationship was achieved with employees‟ performance in the case public
bank.

Accordingly, knowing the effect of human resource management practice on employee‟s

performance within DBE is crucial role because such insight will help them make decisions that
will inculcate improved performance from the employees and to an extension the overall
performance of the organization. Consequently, assessing human resource management practice

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which determines employee‟s performance is vital to meet expected employees performance. The
researcher was intentioned to measure the effect of HRM practice onemployee‟s performance
from view of asset of behaviour which employees show in relation to their job, or efficiency in
his/her job according to legal tasks and the degree of efforts, time management and meeting target.

1.2. Statement of the Problem

Economists classify factors of production in to four categories namely: labour (employee), capital,
entrepreneurship, land and other natural resources(Haque S.M, (2007). Among these, employees
are the most valuable assets of any organization. If Employees are handled effectively, the result
can be greater productivity and increased employee morale. Good employees „performance is the
ingredient for the success of the organization (Demmke, C. (2006). understanding relationship
between case- effect factors is the key to improve the organization„s ability through change
effectively. Job performance problems often start small and develop slowly (Sallehet al., (2011).
In the early stages there may be just a few isolated incidents and these may easily be overlooked.
It is important to deal with a job performance problem in the early warning signals stages while
the issues are small. Poor job performance can place the employee, co-workers and the
organization at risk.

As a matter of fact most managers in organizations face with a crucial question of what factors
influence employee performance and there is inadequate empirical information that might guide
their efforts in enhancing overall job performance among employees (Sallehet al.,
2011).managements have to understand the factors that affect employees „performance because
such insight will help them to make reasonable decisions that will improve the overall
performance of the organization (Mwangi, 2012).Identifying factors that affect employees
„performance can help improve quantity of output, presence/ attendance on the job, efficiency of
the work completed and effectiveness of work completed” (Mathis & Jackson (2009). Not only be
that but Improve creativity & innovative, reduce rate of absenteeism, achievement of target,
quality work, customer satisfaction and it is continual and improvement of employees current and
future career (Janepuengporn and Ussahawanitchakit, (2011).
Accordingly, HRM practices are the corner stone determinants for organization building in the
public sector, which in turn has an impact on the employee‟s performance (Appelbaum , (2001).
Some of HRM practice for instance, training, reward, empowering, leadership and working
environment determine the performance of o employees. Therefore, this research helps the writer
to identify the gaps in DBE.

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Different scholars try to point out the HRM practice that are affecting employees „performance in
case of different sectors throughout different countries. Training has been an important variable in
increasing employee‟s performance. Most of researches including Colombo and Stanca (2008),
Sepulveda (2005) and Konings&Vanormelingen, (2009), showed that training is a fundamental
and effectual instrument in successful accomplishment of the firm‟s goals and objectives, the
absence of training programs will result in unawareness of manager about the skills, knowledge
and competencies that are required for employee motivation. The primary role of training is to
improve the employees‟ skill for current and future duties and responsibilities. Training helps
them to change with aspects like technology and competition (Dessler 2000).

The comfortable working environment also plays an important role in enhancing the employee
performance.The favourable working conditions also involve comfort issues like proper
ventilation, seating, lighting and no noise in the workplace (Yeh, & Lin, 2007). Having of such
condition mainly determine by managements. The Employee expects the availability of resources,
supplies, tools, comfortable seating in order to perform well.Looking at the past studies it was
found that leadership has significant influence on organizational output which is linked with
individual and combined team performance in human resource management (Luthans, Avolio,
Walumbwa, & Li, 2005; Peterson &Luthans, 2003). Likewise, some other researcher (i.e., Howell
&Avolio, 1993) determined that leader‟s role is very important in increasing the performance of
individuals at work place.

There is statistically significant relationships between measures of Employee empowerment and

employee performance Gilaninia (2012), S. Thamizhmanii et al (2010). According to (Bateman
and Snell (2002) empowerment is the process of sharing power with employees, thereby
enhancing their confidence in their ability to perform their jobs and their belief that they are
influential contributions to the Organization. Employees expect financial and non-financial
rewards for their services and efforts. In the absence of equitable pay, bonus and employees get
dissatisfied and do not perform to the standards. The dissatisfaction resulting from the
unavailability of financial and non-financial reward usually leads to high employee turnover,
lateness; many complain and lead to poor performance.

as these relevant studies as well as observation and written information received by the
researcher, He found that it was necessary to conduct assessment with regards to the impact of
training, working environment, leadership, empowering and reward on employees performance of
at the so called Development bank of Ethiopia . In many private and public organizations, similar
study has been done on the tittle the effect of management determinant factors which affect

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 employee‟s performance. Like other organizations, development bank of Ethiopia is one of those
service providing organizations for the public which relies on the performance of its qualified
employees.
Now the question arises what were the effect of determinant factors thathad been determined by
human resource management practice on employee‟s job performance at DBE had not get due
attention by researchers or scholars. so properly managing of those practices which were
determined by management is important to meet the need of jobs via employees .Specifically in
the case of development bank of Ethiopia; the level of employee„s performance and what factors
determine did not get much attention since published study on the case has not been found at DBE
yet. So it was necessary to conduct study on the case. Therefore, the thesis was conducted to
assess the major HRM factors affecting job performance of the employees who are working in
Development bank of Ethiopia through identifying observed potential variables (training,
leadership, working environment, empowerment, and reward).

Therefore this thesis is aimed to generate relevant evidence through detail studyand highlight
solution to improve the performance of employees. The research tried to describe the effect of
HRM determined practiceson employees‟ performance at development Bank of Ethiopia. Hence,
he attempts to examine the effect and relation of training, working environment, leadership,
empowerment andreward on employee‟s performance. Secondly, this study draws some
recommendations and indicates directions for further research.

1.3. Research Questions

The above statements give direction to the researcher for the purpose of build-up research
questions regarding the HRM determined factors which affect the performance of employees of
the bank, the study tried to answer the following main research questions:

 What significant relationship do the selected internal factors have with employees‟ job
performance in development bank of Ethiopia?
 What extent of effect does the overall bundle of the selected determinant factors have on
employees‟ job performance?
 How the observed potential factors (variables) have influenced performance of employees
working at DBE?

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 1.4. Research Hypothesis

Hypothesis is simply an educated and testable guess about the answer to your research question
(Jankowicz, 2000).A hypothesis is often described as an attempt by the researcher to explain the
phenomenon of interest. Hypotheses can take various forms, depending on the question being
asked and the type of study being conducted. A key feature of all hypotheses is that each must
make a prediction. Those hypotheses are the researcher‟s attempt to explain the phenomenon
being studied, and that explanation should involve a prediction about the variables being studied.
These predictions are then tested by gathering and analysing data, and the hypotheses can either be
supported or refuted (falsified) on the basis of the data. Two types of hypotheses with which one
should be familiar are the null hypothesis and the alternate (or experimental) hypothesis. The null
hypothesis always predicts that there will be no differences between the groups being studied. By
contrast, the alternate hypothesis predicts that there will be a difference between the groups
(Geoffrey Marczyk, (2005). Usually a research hypothesis must contain, at least, one independent
and one dependent variable.
The hypotheses assume that employees‟ job performance is affected by and dependent on multiple
management determined factors including leadership, empowerment, working environment,
reward and training. This study aims to figure out the effect of above-mentioned variables on the
performance of employee Based on the problem and the research questions of the study, the
following hypotheses were developed and tested.

Hypothesis: 1

H1: Training has a positive relationship and significant influence on employee‟s job performance.
Hypothesis: 2

H1: There is a significant positive relationship between Working Environments and Performance
of employees.

Hypothesis: 3

H1: Leadership has significant influence on employees‟ performance.

Hypothesis: 4
H1: empowerment has a positive relationship and significant effect on Employees‟ job
performance.
Hypothesis: 5

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 There is a significant positive relationship between Reward and Performance of employees.

Hypothesis: 6

H1: The overall bundles of HRM determined factors have effect on Employees‟ job performance.

1.5. Objectives of the Study

1.5.1. General objective

 The overall objective of the study was to examine the effect of HRMpractice that affect employees
„performance in case of Development Bank of Ethiopia at Addis Ababa city branch.

1.5.2. Specific objectives

To examine having positive or negative relation between practices of Training, Reward,

Empowerment. Leadership and working environment withemployees job Performance in
development bank of Ethiopia.
To investigate the extent of effect of each HRM determinantpracticeson the performance of
employees.
To provide evidence that help managements to make appropriate decision to improve the
performance of their employees.

1.6. Scope of the Study

1.6.1. Content scope

In terms of content scope, this study was to specifically seek to determine the relationship between
training and employee performance, empowerment and employee performance, reward and
employee performance andworking environment and employee‟s performance at Development
bank of Ethiopia, Addis Ababa city branch.

1.6.2. Geographical scope

The study population was drawn from Development bank of Ethiopia, Addis Ababa city branch.
Taking kassanchise as mark point, the targeted branches southAddis, northAddis, east Addis and
west Addis were found in the direction as the same of the name takingkassanchise as departure.

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 1.7. Limitation of the Study

The researcher was weekend student and had many burdens from Monday to
Saturday.Accordingly, he became subjected to time constraints. This made difficulty to conduct
the work. However, the researcher had used maximum effort to do the best research.
Much Study had been conducted on the same title. However, specifically thestudyin case of
development bank of Ethiopia is not conducts yet i.e. the study may had been conducted and
documented but it is difficult to use as reference if not published. The other limitation of the study
was failedto address tall factors that affect the performance of employees due to time constraint.
Due to world-wide danger of COVID-19 employees were unabletofill and return the questionnaire
on time basis.

1.8. Significance of the Study

The study was focus on effect of HRM practice affecting employees‟ job performance in
development bank of Ethiopia in Addis Ababa city branches. So this research was identifying the
factors that determine employees‟ job performance, and moreover, the finding of this study will be
beneficial to the stakeholders including:

a) Academician/Researchers

The findings of this study will assist academicians in broadening of the prospectus with respect to
this study hence providing a deeper understanding of the determinant factors that affect employees
Performance.

b) Development Bank of Ethiopia

The findings of this study will help the human resource management of the organization and
others, within an insight in to the benefits of using different factors that would be studied in this
research to predict the factors that affect the performance of employees and design remedial
actions to exploit their better performance.

Finally, the information produced from this study is expected to be of some value for decision and
policy makers with respect to determinants of employee‟sperformance.

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 1.9. Operational definition of concepts
 Employee performance: refers to measures that could be taken into consideration when measuring
an employee„s performance, for example he / she work with little or no lateness and absence
,complete work accurately and within the time allocated, having logical and creative solution to
problems, meet performance targets, follow the policy and producer of the bank .
 Training; it is teaching, or developing in oneself or others, any skills and knowledge that relate to
specific useful competence.
 Empowerment; Employee empowerment refers to the delegation of power and responsibility
from higher levels in the organizational hierarchy to lower level employees, especially the power
to make decisions; freedom to do, having influential work, having skill to do their responsibility,
do tasks without complex and the like.
 Working Environment; the term work environment is used to describe the surrounding
conditions in which an employee operates. The work environment can be composed of physical
conditions, such Open space, seating arrangement, ventilation and also intellectual conditions like
Supported to do things step by step and having team work with.
 Reward: Finical and non-finical incentives extended to good job performance .it is the
compensation which an employee receives from an organization for exchanging for the service
offered by the employee or as the return for work done .it can be accomplish through different
techniques like salary increment, bonus, commotion and recognition for Excellency.
 Leadership; is the art and method of influencing employees towards achieving a common goal. It
expressed in terms of opportunity to make decision, unbiased advice, division between
subordinates and leaders, punishments related to duties.

1.10. Organization of thePaper

[[ The thesis paper was organized into five chapters. The first chapter was Introduction. Literatures
discussed in chapter two. Chapterthree contains Researchdesign and Methodology aspects and
chapter four embraces data presentation, analyse, interpretation and the final chapter address
summary of findings, conclusions and recommendation.

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CHAPTER TWO: LITERATURE REVIEW

2.1 The Concept and definition of Employee Performance

According to Asa„d (1991) and Chaplin (2005), employee performance is defined as an individual
outcomes based on the size and behavioural standards for the related job, and which led to an
outcome, especially behaviour that can change the environment in certain ways. On the other
hand, Bayley (1990) said that Employee performance is a record of the results produced in a
specific job function or activity during a specific time period associated with organizational
objectives. It is the result produced by a specific functional unit or individual activity over a given
period and not the personal characteristics of employees who performing the work.
Performance is important to us as people and organizations. In fact, most of us believe that we can,
and will, improve at what we do, and we expect others to improve over time as well (Temple,
2002).

2.2. The Concept and definition of Human Resource Management

Employees are resources in organizations, and as such they need to be trained and empowered and
rewarded properly in order to achieve an organization‟s goals and expectations (Brewster, 2007).
The initial development of the HRM concept is based on the effective utilization of people, and to
treat them as resources leading to the realization of business strategies and organizational
objectives (Zhu, Warner & Rowley, 2007). HRM contributes to create high performance work
systems by linking various determinant factors of employee‟s performance (Brewster, 2007).
Organizations use the effectual HRM system to increase their competitiveness by investing in
employee development (Sutiyono, 2007). HRM can be defined as “The process of analysing and
managing an organization‟s human resource needs to ensure satisfaction of its strategic
objectives” (Hellriegel, Jackson, Slocum and Staude, 2008).
All HR activities are dependent upon the manager‟s efforts to formulate and implement the
organization strategy (Wei & Lau, 2005). HRM refers to the policies, practices, and systems in
organizations for recruiting and developing their employees, as well as influencing their
behaviour, attitudes, and performance to achieve the organizations‟ goals (Stone, 2008). HRM
competency contains an organizations‟ ability to recruit, train and develop, maintain and utilize
prospect-oriented employees with their capacities in a way that they comply with their
organizations‟ goals (Zaugg& Thom, 2003).

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 2.3. Human Resource Management Practices concepts and definition.

The real problem of running a bank successfully and viable is that skilled manpower is in short
supply (Gerhart, B., &Wright, P. M. (2007). This point of view that HR resources are becoming
scarce; both in quality and quantity is not acceptable. It is a basic issue that any resource that is in
short supply needs to be properly managed for the benefit of society and, therefore, banks need to
pay attention to the entire Human Resource Management process. The entire spectrum of HRM
practices requires revolutionary changes if the banks have to survive. Managing the people is a
key challenge before the bank managements.
Commercial banks in India are expected to take necessary steps in such a way that their employees
should feel that recruitment, selection, training and development and compensation have become
essential to enhance their productivity and satisfaction (Shalo, 2003). So, in order to retain skilled
and talented employees, banks have started looking towards committed employees and through
many types of research, it has been proved by the researchers that HRM Practices increases the
commitment level of employees. Banks have increasingly recognized the potential of their
existing employees. They have realized that a firm‟s employees can be a unique pool of talent and
can take the organization to greater heights. HRM practices affect such efforts of the employees
by influencing their skills and motivating them. It plays a very crucial role in achieving the
organization‟s goals and sustain the competitive benefit. These HRM practices refer to
organizational activities directed at managing the pool of human resource and ensuring that the
resources are employed towards the fulfilment of organizational goals (Schuler & Jackson 2012).
Human resource management practices are the management of people within the internal
environment of organizations, comprising of the activities, policies, and practices involved in
planning, organizing, developing, utilizing, evaluating, maintaining and holding the appropriate
numbers and skill mix of employees to achieve the organization‟s objectives (Appelbaum 2001).9
For this, all the banks are undertaking exclusive HRM Practices for their most valuable human
assets. These Human Resource Practices are vital not only in inculcating empowerment amongst
the employees but also help in shaping a healthy organizational culture, which leads to higher
growth and performance of banks.
2.4. Measures of performance

According to Armstrong (2005) individual performance can be measured by reference to key

performance indicators (KPIs) and metrics. KPIs define the results or outcomes that are identified
as being crucial to the achievement of high performance. Strictly speaking, metrics are
measurements using a metric system, but the term is used generally for any form of measure. It

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can be argued that what gets measured is often what is easy to measure. And in some jobs what is
meaningful is not measurable and what is measurable is not meaningful. Measuring performance
is relatively easy for those who are responsible for achieving quantified targets, for example sales.
It is more difficult in the case of knowledge workers, such as scientists. But this difficulty is
alleviated if a distinction is made between the two forms of results – outputs and outcomes
(Armstrong, 2005).

Performance means both behaviour and result. Behaviour emanates from the performer and
transforms performance from abstraction into action. Not just a means to an end, the behaviour is
also an outcome in itself, the product of mental and physical effort applied to the task, which can
be judged apart from the result (Armstrong, 2005). As Armstrong (2005) have pointed out that
performance is a multidimensional construct, the measurement of which varies depending on a
variety of factors. A more comprehensive view of performance is achieved if it is defined as
embracing both behaviour and outcomes. Employees‟ performance is an important factor that
contributes to improve the outcomes, behaviour and traits of the employees. It helps to improve
the productivity of the organization.

As it was indicated in Hunger and Wheelen (2000), job performance Controls can be established
to focus either on actual performance results (output) or on the activities that generate the
performance (behaviour). Whereas behaviour controls specify how some thing is to be done
through policies, rules, standards, operating procedures, and orders from a supervisor. Output
controls specify what is to be accomplished by focusing on the end results of the behaviours
through the use of objectives and performance targets or milestones.
There are essentially three types of performance data available (Wheelen, 2000)); these are
measures of output of goods and services, which may be quantitative (units produced, customers
served) or qualitative (number of errors, customer complaints); measures of time, including
lateness, absence, lost working time, failure to meet deadlines); and financial indicators, which
include a large array of possibilities. These may be interrelated; thus absence reduces a unit
production level which reduces profits. Where „hard‟ quantitative data are not available, we may
wish to resort to measures of behaviour. Ideally, we observe people at work, noting whether they
approach customers and offer help, or noting whether they observe safety procedures. Failing that,
we can obtain reports either from an „observer‟, such as the superior or a peer or subordinate, or
from the person under study (John, 2002) Behaviour and output controls are not interchangeable.
Behaviour controls (such as following company procedures and getting to work on time) are most
appropriate when performance results are hard to measure but the cause – effect connection
between activities and results is clear.

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 2.5. Determinants of Employees Performance

AS Le Tran, (2002) mentioned in his journal that there are certain factors individually and
collectively have effect on the performance of employees in a positive or negative way. HR
Director or Manager, who sees to the smooth running of every aspect of employees in the
organization. As such organizations HR department is at the pivot of decision making. Hence
HRM concerns itself with organizational change and industrial relations, or the balancing of
organizational practices arising from its organization goal. For HR practitioners to perform their
strategic role in organizations; they must be ready to contribute their quota to the development and
growth of their organizations via its employee. In other words, they should be ready to add
tangible value to organization‟ effectiveness and efficiency. HR departments are responsible for
overseeing training, working environment, leadership, empowerment and reward, such as
managing pay and benefit systems as discussed below;

2.5.1. Training

TrainingDefinition, Concepts and Review

Human resources are the main asset at modern organizations, which makes the skills mastered
by employees an important factor in determining the current situation as well as the future of an
organization, which are impacted by the performance of the human resources. (Le Tran, (2002)
cited on his journal that the developing process of employees‟ skill in order to improve the
performance is called training. Training is a type of activity which is planned, systematic and it
results in enhanced level of skill, knowledge and competency that are necessary to perform
work effectively. The impact of training on employee job performance research area in HRM.
The way an organization train's its stuff can influence its efficiency (Iqbal et al, (2014),
Padamanaban & Shakeel-Ul-Rehman, 2013; Elanga & Imran, 2013). Several training practices
can be used in order to enhance employee job performance, which results in improving the
performance of the organization as a whole. Thus, training practices can be the main factor for
the success of a firm, which justifies their evaluation through research. Influence of human
resource management and training practices on organizational performance has been an
important topic of research recently (Manning, (2015; Jayakumar & Sulthan, 2014; Treven et
al, 2015). Several advantages can be achieved through training, including the enhancement of
job satisfaction among employees, in addition to commitment and collective empowerment
(Voegtlin et al, 2015; Ajibade & Ayinla 2014; Sung & Choi, 2014). An important factor related

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 to training is the use of modern methods and new learning theories. Successful training depends
on the use of successful training methods which are capable of attracting the attention of
employees and enhancing the learning process (Teck-Hua & Catherine, 2015; Mishra & Smyth,
2015; Alwekaisi, 2015). Attracting the attention of learners in training is related to an important
issue, which forms the basis for the success of training practices, namely the attitudes of
trainees towards the training practices and outcomes. Positive attitudes towards training
practices maximize the benefits gained by trainees (Nu'man, 2006).

Existing literatures present evidence of an existence of obvious effects of training on employee

performance (Swanson, 1999). According to Wright &Geroy (2001) noted that employee

competencies change through effective training programs. Training has been provided to

generate performance improvement related benefits for the employee as well as for the

organization by positively influencing employee performance through the development of

employee knowledge, skills, ability, competencies and behaviour (Appiah 2010; Harrison

2000). Most of managers give training to their employees for three main purposes (Belcourt,

Wright and Saks, 2000), which are:

o To increase productivity or the performance of employees;

o To achieve organizational goals; and
o To invest in employees to succeed in the unpredictable and turbulent business
environment.

Effective training and development programs aimed at improving the employees‟ performance.
Training refers to bridging the gap between the current performance and the standard desired
performance. Training could be given through different methods such as on coaching and
mentoring, peers‟ cooperation and participation by the subordinates. Training programs not only
develops employees but also help an organization to make best use of their human resources in
favour of gaining competitive advantage. Therefore, it seems mandatory by the firm to plan for
such training programs for its employees to enhance their abilities and competencies that are
needed at the workplace, (Jie and Roger, 2005).

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 2.5.1.1. Types and Methods of Training

Training classified into different types based on different criteria. According to (Mathis et al,
2008) training classified based on the content of training or focus of the program such as, personal
computer, team building, sexual harassment, hiring and selection, new equipment operation, Train
the trainer, leadership, conducting performance appraisal, new employees orientation and etc.
According to (Olaniyan and Lucas, 2008) the method of training can be classified as follows:
• On the job training/coaching -This relates to formal training on the job. A worker becomes
experienced on the job over time due to modification of job behaviours at the point of training or
acquisition of skills.
• Induction/orientation - This is carried out for new entrants on the job to make them familiar with
the total corporate requirements like norms, ethics, values, rules and regulations.

• Apprenticeship - A method of training where an unskilled person understudies a skilled person.

• Demonstration-Teaching by example, whereby the skilled worker performs the job and the
unskilled closely observes so as to understand the job.

• Vestibule - This is done through industrial attachment for the purpose of skills and technology
transfer. It is therefore achieved through placement of an individual within another area of relevant
work or organization. The effect is the acquisition of practical and specialized skills or it is a type
of training which occurs in special facilities that replicate the equipment and work demands of
jobs (Mathis, et al, 2008).

• Formal Training - A practical and theoretical teaching process which could be done within or
outside an organization. When training is carried out inside an organization, it is called an in-
housetraining. Off-house training is carried out in professionalized training areas like:
Universities, Polytechnics and Professional Institutes.

2.5.1.2. Training Evaluation

Training effectiveness focuses on the characteristics of individuals, trainings, and organizational

factors that affect training, before, during and after training. It pay more attention on the learning
process as a whole, thus providing a macro view of training outcomes. Conducting a lot of training
does not means that the training programmes were effective if there were no improvements in
performance and productivity. To ascertain the effectiveness of training, an evaluation is required.

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From the results of training evaluation, the organization will be able to ascertain more accurately
whether the training conducted had been effective.

Data concerning the overall effectiveness of training procedures, appropriateness of media and
instruction methods and other issues relating to possible revisions in instructional design may
prove to be very valuable to the training department and will assist them in better serving the
needs of the other stakeholders involved. This information can be obtained through:
Questionnaires, Knowledge Review, Observation, Employee Portfolio and Skill Gap Analysis
(Carr, 2002).

2.5.1.3. Evaluation Challenges in training

According to Ahmed et al, (2010) the most important challenges faced by the organization in
conducting productive assessment and evaluation of training. The biggest challenge faced by the
organizations are time constraint for assessing, determining corrective actions based on these
evaluations, unavailability of proper evaluation method , difficulty in approaching evaluation
professionals, converting results in top management language, getting trainees and managers
involvement, and difficulty of getting top level management involvement in training evaluation.

2.5.1.4. The Relationship between Training and Employees

Performance

Most of the previous studies provide the evidence that there is a strong positive relationship
between human resource management practices and organizational performance (Purcell &Boxall,
2003). As Guest (1997) mentioned in his study that training and development programs as one of
the vital human resource management practice, positively affects the quality of the workers
knowledge, skills and capability and thus results in higher employee performance on job. This
relation ultimately contributes to supreme organizational performance. According to
Swart.(2005), bridging the performance gap refers to implement a relevant training intervention
for the sake of developing particular skills and abilities of the workers and enhancing employee
performance. He further elaborate the concept by stating that training facilitate organization to
recognize that its workers are not performing well and thus their knowledge, skills and attitudes
needs to be moulded according to the firm needs.

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[ There might be various reasons for poor performance of the employees such as workers may not
feel motivated any more to use their competencies, or may be not confident enough on their
capabilities, or they may be facing work- life conflict. All the above aspects must be considered by
the firm while selecting most appropriate training intervention that helps organization to solve all
problems and enhance employee motivational level to participate and meet firm expectations by
showing desired performance. As mentioned by Swart.(2005) this employee superior performance
occur only because of good quality of training program that leads to employee motivation and
their needs fulfilment. According to Wright and Geroy (2001), competencies changes through
effective training programs. It not only improves the overall performance of the employees to
effectively perform the current job but also enhance the knowledge, skills an attitude of the
workers necessary for the future job, thus contributing to superior organizational performance.
Through training the employee competencies are developed and enable them to implement the job
related work efficiently, and achieve firm objectives in a competitive manner.

However, employee performance is also affected by some other factors such as working
environment, leadership, empowerment and reward prevailing in the firm and the group dynamics.
If the above mentioned problems exist in the firm, employee performance decreases not due to
lack of relevant knowledge, skills and attitude, but because of above mentioned hurdles. To make
training effective and to ensure positive effect of training on employee performance these
elements should be taken into consideration Wright and Geroy (2001).

2.5.2. Working Environment

Definition, Concepts and Review

Working environment is a composite of three major sub environments: the technical environment,
the human environment and the organizational environment Opperman (2002). Technical
environment refers to tools, equipment, technological infrastructure and other physical or
technical elements. The technical environment creates elements that enable employees perform
their respective responsibilities and activities. The human environment refers to peers, others with
whom employees relates, team and work groups, interactional issues, the leadership and
management. This environment is designed in such a way that encourages informal interaction in
the work place so that the opportunity to share knowledge and exchange ideas could be enhanced.
This is a basis to attain maximum productivity.

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There are some factors of physical work environment which help employees to perform their job
more effectively and which leads to enhance their job satisfaction, such as lightings, the floor
configuration, office layout and also the furniture layout (Brill et al, 1985). Workplace safety is an
important factor. Under the Occupational Safety and Health Act of 1970, managements have an
obligation to provide a safe working environment for employees. One of the main functions of HR
is to support workplace safety training and maintain federally mandated logs for workplace injury
and fatality reporting. it is argued to impact immensely on employees‟ performance either towards
negative or the positive outcomes (Chandrasekar2001). According to the Vischer (2007), physical
work environment is one of the most important factor which influences on work performance.
Evidence accumulated that the physical work environment in which people work affects both job
performance and job satisfaction. McCoy & Evans (2005) explained that if employees dissatisfy
with their working environment and once the employees become stressors at the work place, the
employees tend to do their work very slowly. This will directly affects for the employees
performance and as well as for the overall productivity of the organization. According to the
Vischer (2007), employees affect by the environment of the place they are working and by having
a good environment, the employees could apply their energy and their full attention to perform
work.

Factors of workplace environment play an important role towards the employee‟s performance. By
having a proper workplace environment, it helps in reducing the number of absenteeism and thus
can increase the employees‟ performance which will lead to the increasing number of productivity
at the workplace (Sinha, 2001).The influence degree of working environment is the counterpart
requirement of a good job performance. A physical work environment can result a person to fit or
misfit to the environment of the workplace and it is also known as an ergonomic workplace. There
are some factors of physical work environment which help employees to perform their job more
effectively and which leads to enhance their job satisfaction, such as lightings, the floor
configuration, office layout and also the furniture layout (Brill et al, 1985). According to the
Vischer (2007), physical work environment is one of the most important factor which influences
on work performance.

Evidence accumulated that the physical work environment in which people work affects both job
performance and job satisfaction. McCoy & Evans (2005) explained that if employees dissatisfy
with their working environment and once the employees become stressors at the work place, the
employees tend to do their work very slowly. This will directly affects for the employees
performance and as well as for the overall productivity of the organization. According to the

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Vischer (2007), employees affect by the environment of the place they are working and by having
a good environment, the employees could apply their energy and their full attention to perform
work.
It will be able to put forward several factors that are included in the working environment and its
effects on job performance. The study of Badayai (2012) has confirmed previous studies and
classified five main factors of uncongenial working environment as shown in figure 1. (Each one
of the factors will be discussed individually using the arguments from different research findings
on the related study).

2.5.2.1. Air factor

The air in the work environment especially its components can play a considerable function in
relation to the work behaviour, specifically job performance. As indicated by Ossama,
GamalandAmal (2006), indoor air quality is very significant to the health, comfort, and job
performance among employees. Indoor contamination levels frequently exceed open air levels and
most of the time workers might spend up to 90% of time alone inside. Most possibly perilous
indoor air pollutants are radon, asbestos, inorganic material, environmental tobacco smoke,
organics, biological and no ionizing radiation. Other pollutants such as odours and dusts can cause
critical discomfort and feelings of unwillingness that may lead to a reduction in productivity and
job performance. (Ossama, Gamal and Amal, 2006)

2.5.2.2. Job aids

Job aids are performance support tools which are used on the job and step-by-step descriptions of
how to do a task. The purpose of a job aid is to guide and facilitate performance and as well as to
support the work activity (Saklani&Jha, 2011). According to Pipe (1986), job aid is being used by
the employees as to support them in term of giving direction or procedure. As a performance
support tool, job aids cause to enhance the performance in three ways as external support,
extrinsic support and intrinsic support. External support means that the employees need to take
leave from work and look for the source as for their reference to their job. The second way is
through the extrinsic support. An extrinsic support means that the job aid is being given within the
system itself. The final way is called the intrinsic support. An intrinsic support is an insider or
software that is being used as for the efficiency of workflow (Cavanaugh, 2004).

Many scholars suggested that there is a positive relationship between the support form supervisor
and the beneficial outcome such as, job commitment, employee retention and moreover

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performance. According to the Gagnon & Michael (2004), when the employees have supportive
relationship with their immediate supervisor it tends to committed to higher performance and
satisfaction .Many authors suggested that employee perceived support form supervisor make the
employee more satisfied and performance oriented in the organization.

2.5.2.3. Temperature Factor

Good room temperature increases productivity and reduces stress in workers as it plays notable
role in workplace environment. Effective temperature indicates how hot or cold our environment
really makes us feel (Aamodt, 2004). High temperatures can affect employee‟s performance,
particularly duties required on cognitive, physical, and perceptual duties. (Badayai, 2012)
Chandrasekar (2011) state that high temperatures can have a direct impact on health and lead to
heat stress and heat exhaustion. Furthermore, Sehgal (2012) clarified that according to a thin
person, a higher temperature may be better. However, for somebody not as thin, a lower
temperature may work better.

2.5.2.4. Sound factor

Noise defined as unwanted sound, is the most common complaint in offices workplace. Many
researchers indicate that noisy places and exposing employees to such conditions can affect their
job performance quality. Melamed, Fried and Froom (2001) confirmed that exposure to high
levels of sound may lead to several diseases such as cardiovascular disease, endocrine and
digestive reactions particularly in complex jobs not in straightforward jobs. Companies today tend
to use an open-office design to increase teamwork, productivity, and communication; however,
researchers‟ studies indicate that these open interactive spaces boost noise in the workplace. Noise
can affect task performance by office workers. According to Kjelberg and Skoldstrom (1991),
study showed that assignments needed reading comprehension and memory is the most sensible to
noise, especially noise sources related to workers‟ conversations. Noise can distract office workers
more likely when workers do not have control of the noise source and it is unpredictable. The
raised noise in the workplace is caused by common office equipment, for example, PCs, printers,
phones, copiers, heating and air conditioning unites, and conversations of office workers.
(Maxwell, 2001) The study of Mital, McGlothlin, and Faard (1992) found that significant noise
sources were individuals arriving/departing, keyboard sounds, and ventilation equipment.

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 2.5.2.5. Light and colour factor

Regardless of fit out design or building type, daylight, is considered to be the number one wanted
natural feature in the workplace as researchers always discovered that exposure to natural light in
an office space impacts employees‟ quality of life. The amount of light needed in the workplace
depends on the kind of tasks being performed, either outdoors or indoors, or when they are
performed, in the day, or at night. As a consequence, it will either increase or decrease the
performance. Inconvenient lighting is a source of distress, thus leading to poor job performance.
That happens when the employee is exposed to uncomfortable working environment in which
there is a high glare, or dim bulk, or a lack of natural light in the office. (Schultz and Schultz,
2006). The brightness of office light influences concentration, alertness, and task performance.
Modifying the quality and nature of light can appreciably enhance working experience and
productivity. (Sehgal, 2012) Moreover, colour has been found to increase productivity and
performance, and raise employees‟ spirits. It plays a role in the workplace by simply providing a
pleasant working environment. Mental reviews have showed that colours can impact individuals'
mood and stimulate feeling (Carruthers, Morris, TarrierandWhorwell, 2010). Cool colours might
awaken unhappy and depressive feelings, while warm colours generally motivate warming and
positive emotions. (Ching and Binggeli, 2012)

2.5.2.6. Space factor

The actual physical layout of an office is highly important when it comes to maximizing
productivity among employees. Nowadays, work environments support new ways of working and
flexible workplaces which displays ease of communication and interpersonal access contrasted
with fully enclosed private offices, and this change to open plan office has boosted employee‟s
productivity paralleled to closed office spaces (Becker, 2002). The individual workstation that is
too crowded and restricted, will lead to stress, pressure and other psychological effect. An
individual employee may feel unstable and have lack of freedom and motivation, on the short-run,
it may lead to a very stressful environment, which decreases the quality of the job performance.
Gifford (1996), stressed that employees whose work requires supervisory-professional and privacy
are unhappy with an open-plan office. Employees adapt to uncongenial work space when spatial
arrangements are inappropriate, and they may even not realize their surroundings could be better.
According to Sehgal (2012), space components like office furniture comprises of desks chairs, the
filing system, shelves, drawers, etc., have a specified part to play in the productivity and the
efficiency of the employees and the suitable functioning of any office. Also, one of the most

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essential things to be guaranteed is whether the workplace furniture is ergonomic or not.
Ergonomic office furniture guarantees that every worker gels well with the things around him, like
chairs, desks, PC arrangement and even environmental factors.

2.5.3. Leadership

DefinitionConcepts and Review

Work engagement (WE) is known as affective motivational and work related condition to fulfil in
the employees which is described as vigour, dedication and absorption together (Schaufeli,Bakker,
& Salanova,2006). The employees who are highly engaged are with high energy, high level of
enthusiastic in work and found engrossed fully towards the job and feel the time is flying all the
way (Macey & Schneider, 2008; May, Gilson, & Harter, 2004). Feedback and social support are
known common antecedents for the work engagement as the characters for job, leadership induce
positive effects and consciousness as dispositional characters (Christian et al., 2011).

Tannenbaum, Weschler and Mussarik (1961) defined leadership as “interpersonal influence

exercised in a situation and directed, through the communication process, toward the attainment of
the specialized goal (cited in Ali, 2012). According to Northouse (2004), leadership is directing a
group of people to accomplish designated goal (cited in Packard, 2009). Yukl (2008) defined
leadership as a process where one person exerted influence intentionally to a group of people in an
organization through relationship, structure, and guide. Leadership, as defined by Gharibvand
(2012) is how the leader communicates in general and relates to people, the way in which the
leader motivates and trains the subordinates and the way leaders provides direction to his/her team
to execute their tasks. Sharma & Jain (2013) defined leadership as a process of which a person
influences other people to accomplish an objective and directing in a way that makes it more
cohesive and coherent.
The realization of business goals is dependent, to some greater extent, on leadership. It calls for
having authority, influence and certain characteristics, abilities, understanding, information and
behaviour characteristics. An individual in leadership position functions inside a social group
context and situations. He exercises authority and influence to be able to correctly lead.
Effective‟s leader in an organization is the fact that leadership that's competent, skilled, capable,
innovative, competitive, motivating and target oriented. The role of the leader is to take all the key
decisions that could help directly in the accomplishment of tasks and attainment of set goals and
along with this the leader also knows the effects of his decisions of the departments as a whole

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(Wolverton, 1990). Actually the concepts of accomplishment and achievement and task
completion and execution, all are originated from the word “performance”. As Iqbal N et. Al.,
(2015), cited in their journal that elaborate by Myron Rush and Cole (2004) the participative style
of leadership has a greater positive effect on employee performance in which situation employee
feel power and confidence in doing their job and in making different decisions. And in autocratic
style leaders only have the authority to take decisions in which employees‟ feels inferior in doing
jobs and decisions. In democratic style employee have to some extent discretionary power to do
work so their performance is better than in autocratic style.
2.5.3.1. Leadership Style

Definition, Concepts and Review

Defined leadership is “interpersonal influence exercised in a situation and directed, through the
communication process, toward the attainment of the specialized goal or goals” (cited in Ali,
2012). Leadership is directing a group of people to accomplish designated goal (cited in Packard,
(2009). Yukl (2008) defined leadership as a process where one person exerted influence
intentionally to a group of people in an organization through relationship, structure, and guide.
Leadership, as defined by Gharibvand (2012) is how the leader communicates in general and
relates to people, the way in which the leader motivates and trains the subordinates and the way
leaders provides direction to his/her team to execute their tasks. Sharma & Jain (2013) defined
leadership as a process of which a person influences other people to accomplish an objective and
directing in a way that makes it more cohesive and coherent.

An effective leader has a responsibility to provide guidance and share the knowledge to the
employee to lead them for better performance and make them expert for maintaining the quality.
And to become a head of all the team members is such a great responsibility. The introduction of
clear standards of leadership promotes the core values and maturity on their role and
responsibility. As the situation affects which functions the leaders carries out, it would also affect
the manner in which the functions are performed.

There are broadly three types of leadership styles according to Carter (2005) and he also explains
the different traits of each style that significantly affect the employee performance.

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 A. Autocratic/Authoritarian:

Both words describe the type of leaders who give orders and expect instant obedient without
argument. Plans and policies are made in isolation from the group. Orders are given without
explanation for the reasons or of future intentions. The autocratic leaders do not become part of
them at all, but merely direct it. Traits of autocratic style: All decision making power is theirs,
unrealistic in demands, uses excessive discipline and punishment, does not allow others to
question decisions or authority, feels he/she is the abilities, critical of differing opinions, rarely
gives recognition, is easily offended is offended, uses others for his/her benefit, actions oriented,
highly competitive, useful in the short term focus (Carter, 2005).

B. Democratic/Passive:

Theoretically the best type of leaders. The democratic leader makes no suggestions but asks for
the groups opinions. The group is left to make its own decisions democratically which, are then
“rubber stamped” by the leader.

C. Participative:
The participative leader is a leadership style in which employees takes part in the decision making
process. Opinions of the group are sought by the participative leader who uses this information to
make decisions. The group is kept informed about the future and are allowed to debate and
proposed Changes to long term policy (Carter, 2005).

2.5.4. Empowerment

Definition, Concepts and Review

Employee empowerment refers to the delegation of power and responsibility from higher levels in
the organizational hierarchy to lower level employees, especially the power to make decisions
(Arneson and Ekberg, 2006).Entrepreneurs, managers and researchers in the field of management
regard the employee as the major resource bringing competitive advantage to establishments, and
they believe the involvement and empowerment of employees is key to the success of
establishments.According to Bateman and Snell (2002) empowerment is the process of sharing
power with employees, thereby enhancing their confidence in their ability to perform their jobs
and their belief that they are influential contributions to the Organization. Empowerment has been
defined by Carver sited in Vikas (2000) as an authority, in terms of encouraging and allowing
individuals to take personal responsibility for improving the way they do their jobs and contribute
to the Organizational goals.Empowerment makes greater use of the knowledge, skills and abilities

24 | P a g e
of the workforce. It encourages team working and if there is meaningful participation, it can lead
to the successful implementation of change programmes.

The meaning of empowerment has been the subject of great debate and remains, at present, a
poorly defined concept. In general terms, empowerment can be defined as a collection of practices
that combine information sharing, delegation of authority, and increased employee autonomy
(Randolph, (2000). Govindarajan and (Natarajan (2009) indicated that employee empowerment
means encouraging and allowing individuals to take personal responsibility for improving the way
they do their jobs and contribute to the Effects of Empowerment on Employee Performance in the
Workplace.
Empowerment of people is a major contributor to the development of subordinates by allowing
them to do extremely well by investing in themselves, even at the risk of making mistakes (Page
and Wong, 2000). Servant leadership theory emphasizes empowering employees, serving them
and being committed to cultivating them (Spear, 2004). Empowering others to act, will lead
followers to do a better job, and will aware them about their full potential (Kouzes and Posner,
2002). Successful leaders and managers help the employees feel competent. Moreover, they
usually consider the interests of others (Kouzes and Posner, 2002). Goodly (2008) considered
developing and empowering others as the main leadership development factors. In addition, he
believed that servant leaders mostly can improve the leadership development factors. Developing
others is one of the social skills of leaders (McCauley and Van Velsor, 2004).

2.5.4.1. Empowerment and job performance

Employee empowerment refers to the delegation of power and responsibility from higher levels in
the organizational hierarchy to lower level employees, especially the power to make decisions
(Arneson and Ekberg, 2006). According to Bateman and Snell (2002) empowerment is the process
of sharing power with employees, thereby enhancing their confidence in their ability to perform
their jobs and their belief that they are influential contributions to the Organization. Employee will
be motivated because management considers them as partners in contributing to organizational
success instead of being seen as mere subordinates and therefore will avoid engaging into
counterproductive behaviours hence improved performance through timely achievement of
organizational goals and objectives (Carrel, Kuzmits& Elbert, 1989).
Empowerment leads employee‟s psychological attachment to the organization that is commitment.
Commitment towards the job is increased as accountability increases. Empowerment also leads to
employee engagement. And when there is a shared purpose, employee becomes a self-directed

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decision maker towards the goals and objectives of the organization. A person feels
psychologically empowered as soon as he/she; i) finds his work meaningful, ii) feels capable with
regard to his/her capability and capacity to perform, iii) enjoys a sense of self-determination about
achieving the desired results, and iv) thinks that he/she has an impact on the work setting. Duvall
(1999) defines success as achievement, accomplishment and attainment which is consequence of
empowerment as follows: (1) Individual success in form of employee‟s role performance, (2)
Organizational success which is achieved as members of the organization accomplish collective
organizational goals and objectives, and (3) As organizational members share a mutually
beneficial and satisfying work experience meeting both social and personal growth needs. Further,
empowerment had significant positive correlations with performance (Bartram and Casimir,
2007). And specifically empowerment is more strongly correlated with the in-role performance of
followers

Empowerment makes greater use of the knowledge, skills and abilities of the workforce. It
encourages team working and if there is meaningful participation, it can lead to the successful
implementation of change programmes. Nixon sited by Mullins (2007) suggested that by
empowering staff right through the organizations structure, every employee will have the power to
be innovative and ensure performance is good. When an opportunity is given to a person with a
right attitude he/she always has done the best of his means and capabilities. Therefore, by
employing empowerment, employee is motivated and given the chance to make the best utilization
of the opportunities given to him. Workplace will provide him freedom and fun and he/she will
get the pleasure of fulfilment of his contribution to work and get full job satisfaction in return.

2.5.5. Reward

Definition, Concepts and Review

Reward is the compensation which an employee receives from an organization for
Exchanging for the service offered by the employee or as the return for work done
(Lin, 2007). It also refers to the collection of brain structures that try to control and
Regulate behaviour by inducing pleasure (Ajila and Abiola, 2004). Human resource
Can be rewarded and optimally utilized through rewarding it using different
Techniques of significance importance.

Carraher et al. (2006) advocates that there should be an effective reward system for
Organization performance and reward should be related to their productivity. Thus,
Organizations must make policies and procedures and formulate such reward system
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Under those policies and procedures which increase employee satisfaction. Bishop
(1987) suggested that pay is directly related with productivity and reward system
Depends upon the size of an organization.
Reward is the compensation which an employee receives from an organization for exchanging for
the service offered by the employee or as the return for work done (Lin, 2007). It also refers to the
collection of brain structures that try to control and regulate behaviour by inducing pleasure (Ajila
and Abiola, 2004). Human resource can be rewarded and optimally utilized through rewarding it
using different techniques of significance importance. Carraher et al. (2006) advocates that there
should be an effective reward system for organization performance and reward should be related
to their productivity. Thus, organizations must make policies and procedures and formulate such
reward system under those policies and procedures which increase employee satisfaction. Bishop
(1987) suggested that pay is directly related with productivity and reward system depends upon
the size of an organization.
2.5.5.1. Types of Rewards

There are several types of reward systems that organisations can use. According to McCormick
and Tifflin (2012), the system of rewards can be classified as intrinsic (finical) or non-finical
(extrinsic). Intrinsic reward system is those that are inherent in the job and which the individual
enjoys as a result of successfully completing the task or attaining his goals. On the other hand
extrinsic reward comes from external and it is tangible in order to appreciate the task performed
by employee. Finical rewards are external to the task of the job, including salary,
commissionandbonuses (Badrinarayan and Tilekar, 2011).

(i) Non-Finical Reward

Non-Finical reward concerns with psychological development of employees (Williamson, Burnett

&Bartol, 2009). They are intangible benefits and include the characteristics Such as thank you,
very done, you are a star, certificate. (Hackman & Oldham, 1976). The intrinsic reward system are
created purposely to appreciate employees in form of self-esteem and related to their feeling of
achievement and growth with organization. Employees are feel satisfy when they have
accomplished something worth in work and orally appreciated by the organization (Nawab,
Ahmad and Shafi, (2011).
(ii) Finical Reward

The Finical Reward cover the basic needs of income to survive (to pay bills), a feeling of stability
and consistency (the job is secure), and recognition (my workplace values my skills). Hellriegel

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(1999) say afinical reward is outcomes supplied by the organization, and includes finical rewards
are external to the task of the job, including salary, commission and bonuses.

2.5.5.2. Reward and job performance

Rewarding employees for their work is a function that is impossible to miss. Rewards include
salary but also growth and career opportunities, status, recognition, a good organizational culture,
and a satisfying work-life balance. Human resource management determines what is to be paid for
different type of jobs. Human resource management decides employees compensation which
includes wage administration, salary administration, incentives, bonuses, fringe benefits, and etc,
rewards are more than just money. They can also be relational and psychological outcomes.
Maintenance - Human resource is considered as asset for the organization. Employee turnover is
not considered good for the organization. Human resource management always try to keep their
best performing employees with the organization.

The intrinsic rewards have been found to have an effect on both individual and organizational
performance. For example, the employees in an organization have reached the esteem stage of
development and possibly the self-actualization phase through the impact of intrinsic rewards
(Mikander, 2010). The intrinsic rewards encourage and enhance both employees and employer to
be able to challenge them and accomplish new tasks and cooperate with others to work in a
harmony environment (Ong and the, 2012). Apart from that, intrinsic rewards enable the
employees to have greater concentration and keep them in energizing and self-managing
(Yasmeen, Faroog&Asghar, 2013). By having the high levels of intrinsic rewards, employees
become the informal recruiters and marketers for their organization in which they recommend
their friends to work in the organization and recommend product and services to potential
customers. According to Thomas (2009), non-finical rewards create a win-win situation for
organization and its employees. The employees feel happy and satisfied as they experience,
feelings of achievement and self-worth, which create job satisfaction and translates into improved
work performance Furthermore, intrinsic rewards facilitate greater levels of satisfaction and
competency.

As results, employees have more interest, excitement, fun and confidence in performing tasks
which leads to enhanced organizational performance. However, research by Uco (1992) suggested
that organizations should pay employees equitable salaries, not tied to performance, so as to attract
and ensure participation, and to rely more on intrinsic motivational techniques to improve
performance (Uco, 1992).

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 The finical rewards cover the basic needs of income to survive (to pay bills), a feeling of stability
and consistency (the job is secure), and recognition (my workplace values my skills).
(Hellriegel,(1999) say afinical reward is outcomes supplied by the organization. One can compare
these rewards to the job context items that Herzberg called hygiene (maintenance) factors.
Queresh, Zaman& Ali (2010) indicated that financial rewards and social recognition rewards
impacted on employees' performance. Generally as, an effort to stimulate employees‟ creativity,
many managers have used finical rewards (e.g. monetary incentives) to motivate their employees
(Fairbank and Williams, 2001; Van Dijk and Van den Ende, 2002). While empirical research has
shown that extrinsic rewards help enhance individuals‟ creative performance and which contribute
ultimately towards organisation performance.

Sajuyigbe, Bosede and Adeyemi (2013), found that reward dimensions have significant effect on
employees‟ performance. In particular, they found that pay, performance bonus, recognition and
praise are the tools that management can use to motivate employees in order for them to perform
effectively and efficiently. Thus, workers reward package matters a lot and should be a concern of
both the employers and employees.

2.6. Summary of the Literature review

[ Human resource management (HRM or HR) is the strategic approach to the effective management
of people in a company or organization such that they help their business gain a competitive
advantage. It is designed to maximize employee performance in service of an employer's strategic
objectives and primarily concerned with the management of people within organizations, focusing
on policies and systems. HR departments are responsible for overseeing training, working
environment, leadership, empowerment and reward, such as managing pay and benefit systems.
HRM also concerns itself with organizational change and industrial relations, or the balancing of
organizational practices with requirements arising from its organization goal.The overall purpose
of human resources (HR) is to ensure that the organization is able to achieve success through
people. There are four core function of HRM namely planning, organizing, directing and
controlling and so there are so many sub division function within the four core function of HRM,
from which the five stated factors had been managed by HRM. The above stated management
determined factors namely. Training, working environment, leadership, empowerment and reward
can affect the performance of employees positively or negatively.

Therefore, from above all literature review discussion we can observe that job performance of
employees can be affected by numerous factors. Among that factors which were included in this

29 | P a g e
 research such as training, working environment, leadership, empowerment, and reward have effect
on employees‟ job performance. This guide researcher what he has to attain on the research i.e.
helps to identify what issues should be address with in quaternary.

2.7. Conceptual Framework

The research was manly based on the conceptual framework which adopted from Owusu-Boateng
(2014), Awadh and Saad (2013), Nassazi (2013) and some modification by the researcher was
taken as depicted in figure1.1 below. Based on the conceptual framework, the earlier hypothesis
was developed. This research study has mainly five independent variables namely Training,
Leadership, working environment, empowerment and reward and one dependant variable i.e.
Employee performance. The purpose of the study as mentioned above was to find out the
relationship between independent variables and dependent variable. Moreover, to see to what
extent Training, Leadership, working environment, , empowerment and reward factors affect
employees‟ performance in development Bank and which factor contribute significantly.

(Independent
(Dependent variable)
variables)
o Employees’ performance

o Training  no lateness and absence

 do work without complain
o Working  complete work with in time
allocated
environment
 creative solution to the

o Leadership problem
 meet the target
o Empowerment  do works qualitatively and
quantitatively
o Reward
 follow the policy and

Source; Adopted from Owusu-Boateng (2014), Awadh and Saad (2013), Nassazi (2013) and modified by the
(Researcher, 2020).

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CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY

3.1. Research Design

Research design is the blueprint for fulfilling research objectives and answering research questions
(John et al., 2007:20-84). It ensures that the study would be relevant to the problem and that it
uses economical procedures. In this study, a quantitative approach of doing research was
employed, which has been practiced, as recommended by Creswell (2009:203-216).Descriptive
study approach has been followed to accomplish the study. In short, the study employed a survey
design administered through structured questionnaire and cross sectional data had been founded
from DBE documented notes as well as litterateurs which related with the case study.
These research use mixed qualitative and quantitative data approach to measure the effect of all
explanatory variable on employee‟s performance. Survey was employed in order to generalize
from a sample to population. This Method is preferred because of its high-speed in data collection
and its being economical.

3.2. Tools & Methods of Data Collection

Study used well-designed questionnaire as best instrument. Questionnaires were distributed to

sample determined, this technique preferred to assist in minimizing bias when dealing with the
population. The layout of the questionnaire was kept very simple to encourage meaningful
participation by the Respondents. The questions were kept as concise as possible with care
taken to the actual wording and phrasing of the questions. The reason for the appearance and
layout of the questionnaire are of Great importance in any survey where the questionnaire is to
be completed by the respondent (John Et al., (2007:128-42). The questionnaires wereadopted
from (Getamesay Birane, (2016), (Mulatu Mersha, (2014) and (Ronah Tugume, 2015) and also
modified by reasercher.. The questions that were used in the questionnaire are five-point liker
scale type. The type of scales used to measure the items on the instrument was ordinal scales
(Strongly disagree to strongly agree).

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 3.3. Data Collection

The study employed both primary and secondary sources of data collection.

I. Primary Sources

In order to realize the target, the study used well-designed questionnaire as best instrument. This
was completed by employees of the selected organization.

II. Secondary Sources

Is the analysis of different documents to get information related to important themes from various
materials in libraries and online sources (Scott, 2006). From this method the researcher was
reviewed different documents employee‟s performance related to training, working environment,
leadership, empowerment and rewards to make the Study fruitful.

3.4. Sampling procedure and techniques

Kothari (2004) defines sampling as the process of selecting a sample from a population.
Researchers select a sample due to various limitations that may not allow researching the whole
population (Mugenda&Mugenda, 2003). In sampling, a section of the population that is selected
represents the entire population. The researcher used purposive sampling to obtain clusters
(branches)and DBE employees who were served two and more years. Accordingly, the study had
selectedAddis Ababa districtand its branches whowere working at different job position. Why
because it was to nearest to the area where researcher reside that helps the researcher to minimize
cost of time and finance. The researcher excluded non-professional employees like securities,
messengers and also employees who had less than two year service were excluded from target
population since their frequent turn over and new entry may made difficult to get reliable data .

The classes were Addis Ababa districts and those 4branches which were found within the district
and had total of 219 professional employees.

The researcherused stratified random sampling technique to select respondents from each classes
of the population and structured questionnaires were distributedthen afterthe required raw data
was collected from the samples determined.

Sample determination

Number of respondents had been determined using Yamane formula.

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• ASSUMPTION:
• 95% confidence level
P = .5
Where n is the sample size.
N; is the population size.
E; is the level of precision.
Using the above formula, the total No samples is 138

Table 3.1: List of Sample size

Name Of district/ Populatio % Share Selected

Branch n sample size
1. Addis Ababa(D) 61 0.28 38
2.South Addis (Branch) 41 0.19 26
3. North Addis(Branch) 35 0.16 22
4. East Addis(Branch) 39 0.18 25
5. West Addis 43 0.20 27
Total 219 1.00 138
Source; sample survey 2020

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 3.5. Data Processing and Analysing

a. Data Processing

The method of data processing in this study was computerized system. In the data processing
procedure editing, coding, classification and tabulation of the collected data were used. Data
processing has two phases namely: data clean-up and data reduction. During data clean-up the
collected raw data was edited to detect anomalies, errors and omissions in responses and checking
that the questions are answered accurately and uniformly. After this, the processes of classification
or arranging large volume of raw data into classes or groups on the basis of common
characteristics were applied. Data having the common characteristics was placed together.

b. Data analysis

Data from questionnaires were analysed through both descriptive and inferential statistics using
SPSS software (Statistical Package for Social Science). The descriptive statistics (frequency
distribution, percentile, minimum, maximum, mean and standard deviation) were used to examine
the general level of job performance as well as the level of determinant factors of performance.
This was the further transformation of the processed data to look for patterns and relationship
between and/or among data groups by using descriptive and inferential (statistical) analysis. The
SPSS was used to analyse the data obtained from primary sources. Specifically, descriptive
statistics (mean, standard deviation) and inferential statistics (correlation and regression analysis)
was employed in this study.
c. Regression Mathematical Model

The equation of multiple regressions on this study was generally built on around two sets of
variables, namely dependent variables (employee job performance) and independent variables
(training, working environment, leadership, empowering and reward). The basic objective of using
regression equation on this study was to make the researcher more effective at describing,
understanding, predicting, and controlling the stated variables.
Employee performance = f (T, WE, L, E, R and)
EP= β0+β1T+β2WE+β3L+β4E+β5R+E
Where:-
EP= Employees‟ Job performance
T= training
WE= working environment
L= leadership

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 E= Empowerment
R= Reward and
E= Error term

3.6. Reliability of the Instrument

Reliability and validity are the two most important quality control objects in research.According to
Kothari (2004), a measuring instrument is reliable if it provides consistent results. Validityof the
Instrumentmean that the degree to which study accurately reflect or assesses the specific concepts which
the researcher is attempting to measure (Fidel, 1993).
Coronaches alpha is a coefficient of reliability. One of the most commonly used indicators of
internal consistency is Cronbach‟s alpha coefficient. Ideally, the Cronbach alpha coefficient of a
scale should be above 0.7 (Pallant, 2005). It is commonly used as a measure of the internal
Consistency or reliability of a psychometric test score for a sample of examinees. For testing the
Reliability of the data instrument, Cronbach‟s Alpha was calculated.
According to Zikmund, Babin and Griffin (2010) scales with coefficient alpha between 0.8 and
0.95 are considered to have very good quality, scales with coefficient alpha between 0.7 and 0.8
are considered to have good reliability, and coefficient alpha between 0.6 and 0.7 indicates fair
reliability. Being of that,the reliability of the construct items were evaluated using Cronbach‟s
coefficient alpha. The result of the reliability test was 0.778which exceeded the minimum
acceptable cut-off point. All 53 items measured to Test reliability showed that there was internal
consistency as indicated in Table 3.2 below reference development bank.This suggested that the
internal reliability in this study was acceptable and signified be as good.

Table 3.3: Reliability Analysis of Variables

Reliability Statistics

Cronbach's Alpha N of Items

.778 53
Source: Sample survey 2020
3.7. Validity of the Instrument

Validation procedures involved initial consultation of the questionnaire. The expert‟s advice
(adviser comment) also judged the face and content validity of the questionnaires as adequate.
Hence, researchers satisfied content and construct validity. Content validity involves the degree to
which the study is measuring what it is supposed to measure. More simply, it focuses on the
accuracy of the measurement (John et.al, 2007). All measures used to construct the instruments

35 | P a g e
have shown acceptable level of construct and content validity in previous Studies and are used in
this study with slight modification. The questioners are adapted from journal Of Asad&Mahfod
(2015); Rashid Saeed et.al.(2013); Agusioma (2014); and Veronica Celattia (2011) and thesis
conducted by Mulatu Masresha (2014), and Getamesay Birhane(2016 under related research title.
Sample questionnaires were administered before distributing finalized one for 11 respondents and
adjustments were made to the questionnaire items based on the comments of the respondents.
Additionally, several measures were employed to ensure that the results are free from material
errors, from the design of the questionnaire. Such measures are clarity of instructions, clarity of
the Questions, the layout of the questionnaire and other comments.

3.8. Ethical Consideration

According to Creswell (2012) “as the researchers‟ anticipate data collectors, they need to respect
the Participants and sites for the research‟‟. Accordingly, the researcher maintained objectivity,
courtesy and high professional standards through scientific process and no falsification, alteration
or Misrepresentation of data for biased or other purposes. The study was conducted by
considering ethical responsibility. This includes providing information to the respondents the
purpose of the study and the use of the information as well. Information Obtained was held in
strict confidentiality by the researcher. Respondents‟ anonymity was kept so that Participants
would feel free and safe to express their ideas.

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 CHAPTER FOUR: RESULTS AND DISCUSSION

The data collected from selected respondents was presented and analysed in this chapter. This
section of the study deals with the statistical testing of hypothesis and interpretation of the result
using statically package for social science (SPSS).As stated in the previous chapters of this paper,
questionnaire were designed and distributed to a total of 138 employees of the development Bank
of Ethiopia located in Addis Ababa city. Accordingly, 132 questionnaires were appropriately filled
and returned which gives 95.65% return rate. Even though, some variation was showed between
expected and actual sample size. But, a total of 132 employee respondents‟ responses were
collected successfully. So, the response rate was enough to carry out the analysis. This chapter
mainly compressed the demographic characteristics of respondents, the descriptive statistics; and
the inferential statistics including correlation analysis and also simple and multiple regression
analysis.

Table 4.1: Response Rate

Name Of district/ Branch Expected Sample Actual Responded Percentage
Size
2. Addis Ababa(D) 38 36 94.74%

2.South Addis (Branch) 26 26 100%

3. North Addis(Branch) 22 20 90.91%
4. East Addis(Branch) 25 25 100%
5. West Addis 27 25 92.59%
Total 138 132 95.65%

According to Table 4.1 above, out of the 138 questionnaires administered, 132 were returned fully
completed. Out of 38 respondents targeted for Addis Ababa district, 36 of them were actually
questioned, implying a response rate of 94.74%. North Addis and south Addis branches
respondents fully fill structured questioners i.e. Meet 100% of expected. At west Addis branch
92.59 % of the questioners were filled by targeted respondents. The overall response rate of the
respondents was thus 95.65%. With that high response rate of the findings of the study were
representative of the actual population.

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 4.1. Demographic Characteristics of Respondents

The first part of the questionnaire consists of five items about the demographic information of the
respondents. It covers the personal data of respondents, such as gender, age, level of educational,
marital status and year of service. The following tables, graphs and figures depicted the each
demographic characteristic of the respondents.

4.1.1. Sex of Respondents

Sex is natural determination of being male or female. Distribution of male and female within an
organization has great impact on job activity of organization. So having fair distribution with an
organization is crucial to have sense of equality.
Table 4.2: sex distribution of respondents

Gender

Frequency Percent

Valid Male 93 70.5

Female 39 29.5

Total 132 100.0

Source; own survey April 2020

The demographic data for gender shows that out of the 132 respondents there were93 males and
39Female. Table 4.2 shows that the male respondents formed majority of the target population
with a percentage of 70.5%, while female respondents were representing 29.5%.
From the above table we can understand that there is male number domination within an
organization. Female have undermine role within an organization but DBE fail to do so.

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 4.1.2. Age of respondents

Age is the length of year someone alive. Age has its contribution for the success of an organization. Long
live alive is important to meet the goal and objective of an organization beyond to serving himself.When
someone ages, or when something ages them, they seem much older and less strong or less alert.
Table 4.3: Age Distribution

Frequency Percent
Valid 25-30 42 31.8
31-36 59 44.7
37-42 21 15.9
above 43 10 7.6
Total 132 100.0
Source; own survey April 2020

The sample population age distribution was clearly depicted at above table is largely dominated by
Respondents who are at the age of 31 – 36 years old covering 59 (44.7 %). The next higher group
was 42 (31.8%) fall under age categories of between 25- 30. The remaining groups 21 (15.9%), 10
(7.6%) were under the age categories of 37-42 and above 43 years respectively. Here the data
indicated that most of the employees in the bank are in the maturity age that are productive and
can contribute for the achievement of DBE goal and objective.
From the above table we can conclude people are more likely to change jobs when they are younger and
well educated because they are more open to a new experience. So DBE has good age distribution toward
earning desired employees performance.
4.1.3. Educational Qualification of Respondents
Education is the process of facilitating learning, or the acquisition of knowledge, skills, values, beliefs, and
habits. Education can take place in formal or informal settings and any experience that has a formative
effect on the way one thinks, feels, or acts may be considered educational.
Table 4.4: Education Distribution of respondents

Frequency Percent

Valid bachelor agree 73 55.3

Master 59 44.7

Total 132 100.0

Source: Own Survey April, 2020

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It can be seen from table 4.4 that respondents hold a range of educational qualification from
bachelor degree to master‟s degree. The majority of the sample group holds a first degree which
accounted 120 respondents hold a master‟s degree.Since the majority of the respondents were
educated, it can be concluded that almost all employees are capable of using new technology,
realizing and meeting the objective of the bank.
In general, people with higher levels of education have better job prospects, so too more of
employees are bachelor holders. It opens your mind to different ways of knowing, which helps in
problem-solving effectively through life's problems, and thinking critically about life and the world.

4.1.4. Marital status of Respondents

Maritalstatus are the distinct options that describe a person's relationship with a significant other. Married,
single, divorced, and widowed are examples of marital status.

The table 4.4 below indicates, single respondents dominated which covers 67 (50.8%), followed
by married respondents which stands second highest number 51 (38.6 %) ,12(9.1%) wereDivorce
and the remaining 2 (1.5%) of participate as a respondent in the research were widowed. Having
more single employees is important to have high concentration on their job.

Source: own Survey April, 2020

Fig. 4.1: Marital status of Respondents

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 4.1.5. Service Year of Respondents

Table 4.3 shows that the respondents have served in development bank of Ethiopia from two

year up to above 40 years. From the respondents, 53 (40.1 %) of them have worked more than

20 years in the Bank. The majority of the respondents have served the organization between 2

and 9 years which consists 42 (31.8 %) of the study group. The other 37 (28%) respondents

worked between 10 - 20 years. According to this figure, employees‟ of the bank are largely

dominated by workers who have been working in the bank for less than 10 years. Since most of

the respondents are youngsters they have few years of work experience. These majority

employees young so they may not know well how to do jobs and may adversely affect their

jobs.

Source: own Survey April, 2020

Fig. 4.2: service year of respondents.

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 4.2. The Effect of Human Resource Management Determined Practice
on Employee Performance at Development Bank of Ethiopia.

4.2.1. Descriptive Statistics

In this section various statistical data analysis tools such as mean, standard deviation, frequency
and Percentile are used to analyse the collected data. The summary of descriptive statistics of all
variables that are evaluated based on a 5-point Likert scale (“1” being “strongly disagreed” to “5”
being “agreed”). (Rao and Abraham, 1991) cited in MulatuTakele (2013) as the score 1
corresponds to 0%, 2 represents 25%, 3 corresponds to 50%, 4 represents 75% and 5 represents
100%. According to Zaidaton&Bagheri (2009), the mean score below 3.00 was considered as low,
the mean Score from 3 up to 3.49was considered as moderate and the mean score 3.5 and above
was considers as high illustrated by Comparison bases of mean of score of five point Likert scale
instrument. Thus, detail of the analysis is presented as follows:
To analyse the findings, employees who strongly disagreed and those who disagreed were
combined into one category of who opposed the items. In addition, employees who strongly
agreed and those who agreed were combined into another category of those who concurred with
the items. Another category was that of those employees who neither agreed nor disagreed was
considered undecided‖ with the items. Thus, the three categories of employees were compared.
Then after, the Interpretation was drawn from the comparisons of the categories.

4.2.1.1. Training

This section attempts to ascertain the level of knowledge and skills of employees for

implementation of the goals of the organization. Respondents were asked the training practice

in development bank of Ethiopia with ten items according to five alternative ratings and their

average response as indicated in the following table.

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 Table 4.5: Employees response to Training practices
Strongly St.De
Disagree Neutral Strongly Agree Agree Mean
Disagree v
Items
Fre Fre
% % Freq. % Freq. % Freq. %
q. q.

Q.1 19 23 47 35.6 14 29 22 3.08 1.32

14.4 17.4 10.6

Q.2 18 17 12.88 48 36.36 15 34 3.23 1.334

13.64 11.36 25.76

Q.3 33 25 34 25.8 32 24.2 16 12.1 17 12.9 2.62 1.328

Q.4 22 36 27.27 34 25.76 10 7.58 30 2.92 1.39

16.67 22.73

Q.5 17 12.88 53 40.15 38 10 14 2.63

28.79 7.58 10.61 1.135

Q.6 22 43 32.58 29 21.97 19 14.39 19 14.39 2.77

16.67 1.294

Q.7 25 18.94 42 31.82 30 7 28 21.21 2.78 1.394

22.73 5.3

Q.8 26 34 25.76 41 13 18 13.64 2.72 1.274

19.7 31.06 9.85

Q.9 16 12.12 35 26.52 49 37.12 15 11.36 17 12.88 2.86 1.171

Q.10 8 6.06 12 9.09 31 23 17.42 58 2.94 1.253

23.48 43.94

Averag
15.61 2.86
e 24.93 28.7 10.76 20

Over All Average Mean = 2.86 , Disagree = 40.53 , Agree = 30.76 , Undecided= 28.71

Source: Sample Survey may, 2020

43 | P a g e
The study respondents noted that DBE had clear training path that allows employees to grow
(Q1,mean=3.08), meaning that a set of lessons or interactive content items such as videos, images,
assessments and other training materials that are combined together to be the training clear. These
help employees to gain critical knowledge. The respondents also agreed that dbe had an annual
employee training plan (Q2, mean=3.23), meaning that there was seasonal training at dbe.Having
training sessions were set to allow them to reach optimal performance at employees target events
and achieve their goals. There were no good opportunities for continuing education (Q3,
mean=2.62), implies that therewas no adequate opportunity to becomes skilled at their job through
creating education opportunity. These lead the more work couldn‟t be done in less time.
Consequently, such situations negatively affect be employee‟s performance.They also noted that
Incompetent employees were not identified and provided with the necessary support (Q4,
mean=2.92), which implies that dbe had limitation to identify who were incompetent to perform
his/her job and has to take training . This again has negative contribution to their (employees)
performance.Employees showed a low concern of seeing that the necessary training was given to
ensure their job effectiveness (Q5, mean=2.63).
As can be seen in Table 4.5, the majority respondents disagreed to the practice that Employees
feel a strong desire to apply what they have learned during the training(Q6,mean=2.77).These
imply that employees was feel trainingas meaningless.Un-Committed Employees are therefore
less likely to perform better.The respondents to the study also disagreed that In-service/on-the job
training practice adequately addresses the skill gaps (Q7, mean=2.78), implies that on-job training
had been ignored .these directly affect employees day to day operation.The study respondents dis-
agreed with the statement ofTraining Leads the employee reduce their mistakes (Q8, mean=2.72),
one of the major intentions of training is not to repeat and make mistakes. Majority of trainings at
dbe were off- job training. Consequently, trainings were not fit with day to day operation. So we
can understand that the existing training practice couldn‟t reduce job errors of dbe employee.
Development bank of Ethiopia had poor habit of following employee's performance after training
(Q9, mean=2.86.What facts, knowledge and experiences did the learner gain had been ignored.
Neglecting to make any attempt of evaluation of training reflects disinterest and lack of
professionalism. The effort that was put into the design of any evaluation would pay rich outcome.
The respondents also disagreed that Trainings provided enables to boost their performance
positively (Q10, average mean=2.86).These implies that there was more wastage of time, money
and resources since employees were not properly trained.

44 | P a g e
From the above table 4.5analyse we can conclude that the average mean score of training at
development bank of Ethiopia is 2.86which is low mean score. This implies that training programs
which has been given by the bank had poor contribution to improve employees job performance
i.e. the existing training practice has no a good opportunity to improve staff job performance. But
still we can understand in some extent there is implementing of this specific practice. This also
explained by average percentile 40.53% (53) are disagree to the current training practice and
30.76 % (41) are agreed while the remaining 28.71 % (38) are undecided (neutral= agree
disagree).

4.2.1.2. Working environment

When pertaining to a place of employment, the work environment involves the physical
geographical location as well as the immediate surroundings of the workplace, such as a
construction site or office building. A positive work environment makes employees feel good
about coming to work, and this provides the motivation to sustain them throughout the day.
Table 4.6: Employees response to Working environment
Strongly Strongly St.De
Disagree Neutral Agree Mean
Item Disagree Agree v
s Fre Fre Fre Fre Fre
% % % % %
q. q. q. q. q.

Q.11 12 9.1 31 23.48 40 30.3 20 15.15 29 21.97 3.04 1.367

Q.12 15 11.36 26 19.7 35 26.52 23 17.42 33 25 3.11 1.465

Q.13 16 12.12 33 25 35 26.52 19 14.40 29 21.97 3.11 1.385

Q.14 19 14.4 25 18.94 43 32.58 16 12.12 29 21.97 3.06 1.271

Q.15 17 12.88 26 19.7 45 34.1 13 9.8 31 23.48 3.09 1.245

Q.16 15 11.36 24 18.18 27 20.45 27 20.45 39 29.55 2.77 1.385

Aver
11.87 20.83 28.42 14.89 23.99 3.03
age

Over All Average Mean = 3.03 , Disagree = 32.7%, Undecided= 28.42% , Agree =
38.88%

Source: Sample Survey May 2020

45 | P a g e
As can be seen in Table 4.6, the study respondents satisfied with the existing temperature factors, job
aids, light and sounds (Q11,mean=3.04), They also noted thatphysical surrounding where they were
working was comfortable and convenient to perform their job (Q12,mean= 3.11).The respondents
reported that theyhad gotten the opportunity to work in team with their colleagues and to
communicate on aspects of their job (Q13, mean=3.11).This means that team work at dbewasfair not
only but also they believed in teamwork, the "what's in it for us" approach rather than "what's in it for
me"(Q14, mean= 3.06).Majority of the employees have recorded positive attitudes toward supports
had been done by step-by-step descriptions of how to do a task during complex (Q15, mean=
3.09).Such environment important to facilitate performance. Respondents agreed thatthe existing
bank‟s environment inspire them for high level of performance (Q16, Average mean= 3.03).

Totally from table 4.6, we can infer that employees of the bank had good attitude towards the
prevailing working environment. the working environment in development bank of Ethiopia 32.7 %
(43) of the respondents were disagreed, 38.88 %( 51) were agree and the remaining 28.42 %( 38)
were undecided. The result mean 3.03 shows that working environment at development bank of
Ethiopia was moderate.

4.2.1.3. Leadership

Leadership is the art of motivating a group of people to act toward achieving a common goal. In a

business setting, this can mean directing workers and colleagues with a strategy to meet the

organization needs.As well as providing direction, inspiration, and guidance, good leaders exhibit

courage, passion, confidence, commitment, and ambition. They nurture the strengths and talents

of their people and build teams committed to achieving common goals.

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 Table 4.7: Employees response to Leadership practice

Strongly Strongly Mea St.De

Disagree Neutral Agree
Disagree Agree n v
Items
Fre Fre Fre Fre Fre
% % % % %
q. q. q. q. q.

Q.17 42 31.82 32 24.24 26 19.7 12 9.09 20 15.15 2.52 1.41

Q.18 13 9.85 41 31.06 32 24.24 13 9.85 33 25 3.09 1.35

Q.19 15 28 21.21 21 15.91 24 18.18 44 33.33 3.41 1.43

11.36

Q.20 35 26.52 15 11.36 14 10.61 1 0.76 67 50.76 3.38 1.76

Q.21 1 0.76 11 8.33 61 46.21 27 20.45 32 24.24 3.59 0.97

Q.22 23 17.42 43 32.58 26 19.7 9 6.82 31 23.48 2.86 1.42

Q.23 16 12.12 39 29.55 35 26.52 9 6.82 33 25 3.03 1.36

Averag
15.69 22.62 23.27 10.28 28.14 3.13
e

Over All Average Mean = 3.13 , Disagree = 38.31% , Undecided= 23.27%, Agree = 38.42%.

Source: Sample Survey May, 2020

According to the results in Table 4.7, the study respondents noted that they had no opportunity to
take part when decisions were made (Q17, mean=2.52), these implies that they participated only
when the matter concern them. Such leadership practice can‟t boost decision making
experience;their leaderswere unbiased, advice and treats every employee without
discrimination(Q18,mean = 3.09);respondents had beenencouraged by their leaders to participate
in concerned activity (Q19, mean = 3.41).The study respondents moderately agreed that there was
a clear division between the leader and the followers (Q20, mean=3.38), these was improved by
question 17 respondents i.e. leaders didn‟t give chance to participate at a time of decision.
The study findings in Table 4.7 shows that their supervisor values Rewards or punishments in
order to get better performance (Q21, mean=3.59).these implies there was autocratic leadership

47 | P a g e
practice .a such type of practice has negative impact on employees performance. Respondents
were disagree which had been a clear expectations provided from their leader for what, when and
how needs to be done (Q22, mean=2.86).According to the study respondents, the existing
Leadership practice inspired employees for high level of performance (Q23, average mean=3.13)
When we conclude the above table 4.7, leadership practice at dbe was moderately positive
(aggregated mean 3.13). When employees feel that their leaders be as four eye, they are more
likely to work towards achieving organizational goals and objectives since they feel that their
decisions are valued.

Strongly Strongly Mea

Disagree Neutral Agree St.Dev
Item Disagree Agree n
s Fre Fre Fre
% % Freq. % Freq. % %
q. q. q.

Q.24 33 25.00 43 32.58 37 28.03 10 7.58 9 6.82 2.39 1.14

Q.25 30 22.73 28 21.21 33 25 19 14.39 22 16.67 2.86 1.59

Q.26 26 19.70 39 29.55 34 25.76 13 9.85 20 15.15 2.71 1.31

Q.27 27 20.45 35 26.52 33 25 12 9.09 25 18.94 2.80 1.38

Q.28 22 16.67 36 27.27 48 36.36 11 8.33 15 11.36 2.70 1.18

Q.29 23 17.42 22 16.67 42 31.82 26 19.7 19 14.39 2.97 1.28

Q.30 23 17.42 19 14.39 48 36.36 21 15.91 21 15.91 2.98 1.28

Q.31 23 17.42 46 34.85 28 21.21 21 15.91 14 10.61 2.67 1.24

Q.32 28 21.21 27 20.45 37 28.03 24 18.18 16 12.12 2.8 1.3

Q.33 20 15.15 35 26.52 34 25.76 20 15.15 23 17.42 3.05 2.04

48 | P a g e
 Aver
19.32 25.00 28.33 13.41 13.94 2.79
age

Over All Average Mean = 2.79 , Disagree = 44.32% , Undecided= 28.33 % , Agree = 27.35 % ,

4.2.1.4. Empowering

[[

Empowerment is a buzz term that we hear a lot about in leadership. A culture that embraces employee
empowerment, understands the role workers have by taking care of the needs of the customers they
serve.Empowerment is a way to give employees greater authority and responsibility to take care of the
needs of the customer and to provide employees with the means for making influential decisions.
Table4.8: Employees response to Empowering practice.

As Table 4.8 shows more of the respondents 44.32% (59) have no freedom to determine how to do
theirjob (Q24, mean=2.39) i.e.As the majority of the respondents are not familiar on issue,; have
no influence on their work job but only 27.35 % (36) of the respondent agreed with this idea and
the remaining 28.33% (37) are undecided (Q25, mean= 2.86). The study respondents also
disagreed with they had a chance to use personal initiative in their work (Q26, mean=
2.71).According to the study respondents, their job were not well within their scope of abilities (Q27,
mean=2.8). They also noted that they couldn‟t perform their day to day task without complexity
(Q28, mean= 2.7);they couldn‟t be confident about their ability to do their job (Q29, mean=2.97);
accordingly theyneed upper management intervention (Q30, mean=2.98); they found the work that
they did to be full of meaning and purpose (Q31 mean= 2.67). Had been that they care about what
theydid on their job (Q32, mean=2.8).

All the values for each items are below the average as well as the overall mean value is 2.79. This
was an indicator that shows the employees of the bank had poor perception on empowerment. This
practise leadsto not too good job performance. Leaders have to empower their employees since
empowering is gain rather than loss of power. When the employees empowered to take action, it
gives them the ownership of job. The empowerment helps employees to take responsibility of
their job and impact of their performance on the organization. But as shown table4.8, DBE had
neglect contribution of empowerment for improved performance of employees.

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 4.2.1.5. Reward

Something that is given in return for good or evil done or received or that is offered or given for
some service or attainment. The achievement and benefit received by employees for their job
performance in an organization are known as reward. Employees join the organization within
certain expectation of reward. This will motivate employees to make their effort in achieving
organizational goal.
Table 4.9: Employees response to reward practice.
Strongly Strongly Mea St.
Disagree Neutral Agree
Item Disagree Agree n Dev
s Fr Fre Fre Fre Fr
% % % % %
eq. q. q. q. eq.

Q.34 35 26.52 38 28.79 34 25.76 15 11.36 10 7.58 2.45 1.21

Q.35 36 27.27 25 18.94 32 24.24 13 9.85 26 19.7 2.76 1.46

Q.36 16 12.12 51 38.64 35 26.52 12 9.09 18 13.64 2.73 1.2

Q.37 29 21.97 31 23.48 34 25.76 22 16.67 16 12.12 2.73 1.31

Q.38 25 18.94 34 25.76 35 26.52 11 8.33 27 20.45 2.86 1.38

Q.39 17 12.88 33 25 43 32.58 16 12.12 23 17.42 2.96 1.26

Q.40 18 13.64 23 17.42 49 37.12 20 15.15 22 16.67 3.04 1.24

Q.41 24 18.18 51 38.64 29 21.97 7 5.3 21 15.91 2.62 1.29

Aver 10.9 15.4

18.94 27.08 27.56 2.77
age 8 4
Over All Average Mean = 2.77 , Disagree = 46.02%, Undecided= 27.56%, Agree
=26.42%.

50 | P a g e
Table 4.9 indicates that study respondents were unsatisfied on the Salary of DBE (Q34,
mean=2.45) and also they noted that Bonus was not above competitors (Q35, mean=2.76);
respondents agreed that Commission was not excellent and couldn‟t inspire them for better
performance (Q36, mean=2.73).According to the study respondents, the staff were not satisfied on
finical rewards practice of DBE since the average mean of the respondent 2.65was below the
average value.
The study respondents disagreed with Formal Recognition such as certificate was given to good
performance (Q38, mean= 2.86), means that appreciate employees in form of self-esteem and
related to their feeling of achievement and growth was ignored.The result on table 4.11 indicates
that A family day offered by the bank to employees was poor practice (Q39, mean=2.96).
However, respondents noted that they had been satisfied with Informal recognition (Such as thank
you, very done, you are a star) is given to the job well done (Q40, mean= 3.04).According to the
study respondents, the staff were not satisfied on finical rewards practice of DBE since the
average mean of the respondent 2.96was below the average value.
Table 4.9 results showthat employees were not happy or satisfied with the current finical and non-
finical rewards.Human performance of any sort is improved by increased motivation but HRM
had been failed to have such environment.

4.2.1.6. Employee’s performance.

It is how an employee fulfils their job duties and executes their required tasks. It refers to the
effectiveness, quality, and efficiency of their output. Performance also contributes to assessment
of how valuable an employee is to the organization.
Table 4.10: Employees response to their performance.
Strongly Strongly
Disagree Neutral Agree Mean St.Dev
Disagree Agree
Items
Fre Fre Fre Fre Fre
% % % % %
q. q. q. q. q.

Q.42 20 15.15 28 21.2 37 28 15 11.4 32 24.24 3.08 1.38

Q.43 8 6.06 32 24.2 25 19 14 10.6 53 40.15 3.55 1.38

Q.44 18 13.64 14 10.6 52 39 23 17.4 25 18.94 3.17 1.25

Q.45 18 13.64 17 12.9 34 26 22 16.7 41 31.06 3.39 1.40

51 | P a g e
 Q.46 30 22.73 18 13.6 28 21 13 9.85 43 32.58 3.46 2.97

Q.47 11 8.33 31 23.5 26 20 17 12.9 47 35.61 3.44 1.39

Q.48 12 9.09 21 15.9 42 32 16 12.1 41 31.06 3.40 1.32

Q.49 20 15.15 12 9.09 34 26 24 18.2 42 31.82 3.7 2.89

Q.50 13 9.85 36 27.3 21 16 16 12.1 46 34.85 3.35 1.44

Q.51 19 14.39 18 13.6 39 30 23 17.4 33 25 3.25 1.36

Q.52 19 14.39 24 18.2 30 23 30 22.7 29 21.97 3.25 1.55

Q.53 22 16.67 18 13.6 35 27 24 18.2 33 25 3.24 1.36

Avera 16.9 25. 14.9

13.26 29.36 3.36
ge 8 44 6

Over All Average Mean = 3.36 , Disagree = 30.24%, Undecided = 25.44 %, Agree = 44.32%
,

According to the results in Table 4.10, the study respondents noted that they had been present on
work on time without absenteeism (Q42, mean= 3.08); and also they did their work effectively
without complaining (Q43, mean= 3.55);the study respondents also agreed that they completed
their work in the time allocated to them (Q44, mean=3.17);they could develop logical and creative
solutions to problems (Q45, mean=3.39);and also they agreed that they always met their
performance targets i.e. targets were realistic (Q46, mean=3.46); The above findings show that
they performed their day to day task qualitatively i.e. customers served) and quantitatively i.e.
minimum number of errors (Q47, mean= 3.44); and they strictly followed the policies and
procedures of the bank (Q48,mean=3.4). Study respondents agreed that Employee‟s job
performance was affected by training (Q49, mean=3.7); and they agreed that finical and non-
finical reward were helping to motivate them for higher level of performance (Q50,
mean=3.35);the banking work environment was good for employees in terms of enabling them to
perform well (Q51, mean=3.25); and also they agreed that their performances were not limited by
poor leadership (Q52, mean=3.25);The existing empowerment practice helped them to boost their
performance (Q53, mean=3.24).The results show that employee performance at development bank
of Ethiopia was generally moderate (average mean=3.36).

52 | P a g e
From the descriptive analysis of the study, researcher concludes that average mean of training,
empowerment and reward was 2.86, 2.79, and 2.77 respectively, Accordingly the researcher infer
that the average mean of each variable (training, empowerment, and reward) was below average
mean of 3. So, the researcher found that development bank of Ethiopia had poor practice on
training, empowerment and reward. From which reward was too poor. Whereas the average mean
of working environment, leadership and employees performance was 3.03, 3.13 and 3.36
respectively. These show that the employees of the bank had moderate attitude on working
environment, leadership and employees performance. From which the dependant variable
(employee‟s performance) was the best accomplished.

Standarddevation show the desperation of mean around the mean. Standardevetion do not show
the case effect relation. The standarddevation of all scores were not 0 rather it was above 1. These
implies that the response of employees were not exactly the mean since there were no redundant
of questions.

4.2.2. Correlation Analysis

In order to determine the influence of internal factors on employee performance at DBE,

correlation and regression analysis were conducted. Pearson correlation coefficient (r) was used to
determine the strength of the relationship between internal factors (training, working environment,
leadership, empowerment and reward) and employee performance at DBE. The coefficient of
determination was used to determine the effect of internal factors on employee performance.
Regression analysis was employed to determine the extent to which observed internal factors
influences employee performance. The significance of the coefficient (p) was used to test the
objective by comparing p to the critical significance level at 0.05.The hypotheses discussed in the
first chapter aimed to investigate the relationship between Independent variables (training,
working environment, leadership, empowering and Reward)and dependent variable (employees‟
job performance) in development bank of Ethiopia. Correlation analysis is done to examine this
relationship. The Pearson Product-Moment Correlation Coefficient is a statistic that indicates the
degree to which two variables are related to one another. The sign of a correlation coefficient (+ or
-) indicates the Direction of the relationship between -1.00 and +1.00(Ruud et. al.
2012).Determining the degree of association between the selected HRM determinant factors
(training, working environment, leadership, empowering, reward and) and employees‟ job
performance was the Main purpose of conducting an analysis using Pearson correlation. So, in this

53 | P a g e
 section the first five Hypotheses were tested based on the correlation result summarized in table
4.14 below.
Table 4.11: Correlation Analysis between Independent variables and Dependent Variable

Correlations

Working employees
Training Environment leadership empowering reward performance

Training Pearson
1 .284** .083 .332** .491** .566**
Correlation

Sig. (2-tailed) .001 .344 .000 .000 .000

Working Pearson
.284** 1 .189* .205* .164 .343**
Environm Correlation
ent Sig. (2-tailed) .001 .030 .018 .060 .000

Leadershi Pearson
.083 .189* 1 .006 .089 .122
p Correlation

Sig. (2-tailed) .344 .030 .948 .310 .164

Empoweri Pearson
.332** .205* .006 1 .450** .520**
ng Correlation

Sig. (2-tailed) .000 .018 .948 .000 .000

Reward Pearson
.491** .164 .089 .450** 1 .563**
Correlation

Sig. (2-tailed) .000 .060 .310 .000 .000

Employee Pearson
.566** .343* .122 .520* .563** 1
s Correlation
performan Sig. (2-tailed)
.000 .000 .164 .000 .000
ce

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

54 | P a g e
 4.2.2.1. Correlation Analysis between Training and Employee Job

performance

Hypothesis: 1

training has a positive relationship and significant influence on employees‟ job performance.
The result on the above table 4.11 shows that the existing training practice of the bank (r= .566,
p<0.01) has association and statistical significant at confidence interval of 99% (p<0.01). This
means an increase in training activities will bring an increment in employees‟ job performance.
Therefore, the null hypothesis (H0) is rejected. Correlation coefficient of .566 means that training
relationship with employee‟s performance is account 56.6%.
4.2.2.2. Correlation Analysis between working environment and

Employee performance

Hypothesis: 2

• H1: Working Environment has a positive relationship and significant influence on employees‟ job
performance

As indicated in the above table 4.11 the correlation coefficient result of working environment
practice in development bank is (r= .343, p<0.01). This implies the presence of moderate
relationship between working environment and employees‟ job performance which is statistically
significant at 99 %( p<0.01) and Correlation coefficient of .343 means that working environment
relationship with employee‟s performance is account 34.3%.The hypothesis stated that
organizational communication would have a significant influence on employee performance is
accepted. This means that organizational communication has a significant effect on employee
performance at DBE. This practically implies that employee performance at DBE improves with
better organizational communication. Therefore, the null hypothesis (H0) is rejected.

55 | P a g e
 4.2.2.3. Correlation Analysis between Leadership and Employee Job

performance

Hypothesis: 3

H1: Leadership practice has a positive relationship and significant influence on employees‟ job
performance.

From the above table 4.11, it can be seen that leadership practice (r=0.122, p>0.05).it implies that
leadership has low association with performance of employees and Thus, the hypothesis stated
that the Leadership practice would have a significant influence on employee performance is not
accepted. This means that Leadership practice has insignificant effect on employee performance at
DBE. Therefore, the alternative hypothesis (H1) is rejected.

4.2.2.4. Correlation Analysis between empowering and Employee Job

performance

Hypothesis: 4
H1: Empowerment has a positive relationship and significant influence on employees‟ job
performance.

The above table 4.11, it can be shows that empowering(r=0.520, p<0.01) is positively correlated
with employee performance. Correlation coefficient of .520 means that empowering relationship
with employee‟s performance is account 52%.This implies the presence of moderate relationship
between Empowering and employees‟ job performance in the Bank which is statistically
significant at 99 % confidence interval. Change in Empowerment given to employees has a
corresponding effect on job performance of employees. Therefore, the null hypothesis (H0) is
rejected.
4.2.2.5. Correlation Analysis between Reward and Employee Job

performance

Hypothesis: 5

H1: Reward has a positive relationship and significant influence on employees‟ job performance

56 | P a g e
The above table 4.11 it can be shows that reward(r=0.563, p<0.01) is positively correlated with
employee performance. Correlation coefficient of .563 means that reward relationship with
employee‟s performance is account 56.3%.This implies the presence of moderate relationship
betweenRewardand employees‟ job performance in the Bank which is statistically 99 %
significant. And change in Reward has a corresponding effect on job performance of Employees.
Therefore, the null hypothesis (H0) is not accepted (rejected).

Thus, we can conclude from the correlation results corresponding change in the independent
variables such as increase relevant training, increase reward practice, improvement in
empowerment, and improvement in the working environment will have a positive and moderate
relative impact on the dependent variable of employees‟ job performance. However, if the changes
in the individual independent constructs are not in a positive manner, then its effect on the
dependent variable will be negative but leadership practice doesn‟t significantly affect employees
performance i.e.it doesn‟t mean that leadership has no contribution to improve employee‟s
performance.

4.2.3. Regression Analysis

4.2.3.1. Simple Linear Regression Analysis

Regression is average value of y is a function of x. Linear regression analysis is used to measure

the statistical significance of the effect of each individual independent variable on the dependent
variable through F and P value. This measurement is made by inferring the value of R2 to explain
the magnitude of the effect of the independent variable on the dependent variable. Here below
depicted and explained are the linear regression of various independent variables and dependent
variable.

57 | P a g e
4.2.3.1.1. Training and Employees’ Job Performance

Table: 4.12 ANOVA Regressions for Training and Employees‟ Job Performance

ANOVAb

Sum of
Model Squares Df Mean Square F Sig.

1 Regression 26.452 1 26.452 61.272 .000a

Residual 56.122 130 .432

Total 82.574 131

a. Predictors: (Constant), Training

b. Dependent Variable: Employees Performance
Source: Sample Survey May, 2020

Based on the above table 4.12, the relationship between training and employees‟ job performance
is significant (P<0.01). F value, which is the ratio of variance between groups and variance within
groups, is well above 1 (if F value is close to 1, it implies that the null hypothesis is accepted). As
a result, the null hypothesis (Ho) which states that training has no effect on employees‟ job
performance is rejected.

4.2.3.1.2. Working Environment and Employees’ Job Performance

Table: 4.13 ANOVA Regressions for Working environment and Employees‟ Job Performance.

ANOVAb

Sum of
Model Squares Df Mean Square F Sig.

1 Regression 9.719 1 9.719 17.342 .000a

Residual 72.855 130 .560

Total 82.574 131

a. Predictors: (Constant), WORKINGENVIROMENT

b. Dependent Variable: EMPLOYEESPERFORMANCE
Source: Sample Survey May, 2020

58 | P a g e
As table 4.13 shows that the relationship between working environment and employees‟ job
performance is significant (P<0.01, F >1), which ultimately depicts that the null hypothesis (Ho)
which states that working environment has no effect on employees‟ job performance is rejected.

4.2.3.1.3. Leadership and Employees’ Job Performance

Table: 4.14 ANOVA Regressions for Leadership and Employees’ Job Performance

ANOVAb

Model Sum of Squares Df Mean Square F Sig.

1 Regression 1.229 1 1.229 1.963 .164a

Residual 81.345 130 .626

Total 82.574 131

a. Predictors: (Constant), LEADERSHIP

b. Dependent Variable: EMPLOYEESPERFORMANCE

As can be observed from the above table 4.14 above, there is no significant relationship between
leadership and employees‟ job performance (P>0.05), (F≈ 1).The study found no significant
relationship between leadership and employee performance at dbe. This implies that employee
performance at dbe does not improve by leadership practice. The relationship between leadership
and employee
Performance is there but very insignificant at p=0.164. Here is no evidence to reject null
hypothesis. Hence, it is concluded that the alternative hypothesis (H1) which states that leadership
has effect on employees‟ job performance is not accepted.
4.2.3.1.4. Empowering and Employees’ Job Performance
Table: 4.15 ANOVA Regressions for empowering and Employees’ Job Performance
ANOVAb
Sum of
Model Squares df Mean Square F Sig.
1 Regression
22.337 1 22.337 48.206 .000a

Residual 60.237 130 .463

Total 82.574 131

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 ANOVAb
Sum of
Model Squares df Mean Square F Sig.
1 Regression
22.337 1 22.337 48.206 .000a

Residual 60.237 130 .463

Total 82.574 131
a. Predictors: (Constant), EMPOWERING

Source: Sample Survey May, 2020

It can be observed from the above table 4.15 that there is a significant relationship between
empowering and employees‟ job performance (P<0.01, F>1). Hence, it is concluded that the null
hypothesis (Ho) which states that empowering has no effect on employees‟ job performance is
rejected.

4.2.3.1.5. Reward and Employees’ Job Performance

Table: 4.16 ANOVA Regressions for Reward and Employees’ Job Performance

ANOVAb

Sum of
Model Squares Df Mean Square F Sig.

1 Regression 26.220 1 26.220 60.484 .000a

Residual 56.354 130 .433

Total 82.574 131

a. Predictors: (Constant), REWARD

b. Dependent Variable: EMPLOYEESPERFORMANCE
Source: Sample Survey May, 2020

As we can observe from the above table 4.16, there is a significant relationship between reward
and employees‟ job performance (P<0.01, F>1). Hence, it is concluded that the null Hypothesis
(Ho) which states that reward has no effect on employees‟ job performance is rejected.

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 4.2.3.2. Multiple Linear Regression Analysis

Regression analysis is a systematic method that can be used to investigate the effect of one or
more predictor variables on dependent variable. That is, it allows us to make statements about how
well one or more independent variables will predict the value of a dependent variable. Specifically
this multiple regression was conducted in order to investigate the effect overall bundle of selected
determinant factors on employees‟ job performance which is clearly stated at hypothesis 6.

Hypothesis: 6

on employees‟ job performance

Table 4.17 Multiple Linear Regression Model Summary

Model Summary

Std. Error of the

Model R R Square Adjusted R Square Estimate

1 .719a .517 .498 .56269

a. Predictors: (Constant), REWARD, LEADERSHIP, WORKINGENVIROMENT,

EMPOWERING, TRANING

Source: Sample Survey May, 2020

As shown in the above table 4.17 the overall bundle of determinant factors of the five independent
variables such training, working environment, leadership, empowerment and reward explains 51.7
% (R2 = 0.517) of the dependent variable (employees‟ job performance). This suggests that 51.7
% of employees‟ job performance level in the bank clearly depends on the independent variables
while the remaining 48.3% is determined by other influencing factor which were not covered by
this study (error term).

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Table 4.18 ANOVA

ANOVAb
Sum of
Model Squares df Mean Square F Sig.
1 Regression 42.680 5 8.536 26.959 .000a
Residual 39.894 127 .317
Total 82.574 132
a. Predictors: (Constant), REWARD, LEADERSHIP, WORKINGENVIROMENT,
EMPOWERING, TRANING
b. Dependent Variable: EMPLOYEESPERFORMANCE
Source: Sample Survey May, 2020

The above table 4.18has revealed that 82.574 from total sum of squares, 42.680 can be explained
by regression and 39.894 are explained by residual value. Hence, the model is statistically
significant as relatively large portion of model is explained by regression. ANOVA was used to
test the combined dependant variable has significant effect, if p value more 5% the study will be
rejected .Asshown on table 4.26, the result F= 26.959 which is greater than 1 and P<0.01 we can
conclude that the combination of HRM determined factors have positive effect on employees‟ job
performance which is statistically significant and confident at 99%. Thus, this study rejects H0
(the overall bundle of determinant factors has no Effect on employees‟ job performance has been
rejected).

Table 4.19 multiple linearRegression Coefficient

Coefficientsa
Standard
ized
Unstandardized Coeffici
Coefficients ents Collinearity Statistics
Std. Toleranc
Model B Error Beta T Sig. e VIF
1 (Constant) -.967 .458 -2.112 .037
WORKINGENVIR
.205 .090 .151 2.282 .024 .876 1.141
OMENT
TRANING .528 .130 .299 4.060 .000 .707 1.413
REWARD .339 .097 .267 3.513 .001 .663 1.507
LEADERSHIP .067 .098 .043 .685 .495 .956 1.046
EMPOWERING .407 .107 .269 3.809 .000 .767 1.305

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 Coefficientsa
Standard
ized
Unstandardized Coeffici
Coefficients ents Collinearity Statistics
Std. Toleranc
Model B Error Beta T Sig. e VIF
1 (Constant) -.967 .458 -2.112 .037
WORKINGENVIR
.205 .090 .151 2.282 .024 .876 1.141
OMENT
TRANING .528 .130 .299 4.060 .000 .707 1.413
REWARD .339 .097 .267 3.513 .001 .663 1.507
LEADERSHIP .067 .098 .043 .685 .495 .956 1.046
EMPOWERING .407 .107 .269 3.809 .000 .767 1.305

a. Dependent Variable
EMPLOYEESPERFORMANCE
Source: Sample Survey May, 2020

From the above table 4.19, we can easily compare the relative contribution of each of the different
variables by taking the beta value under the unstandardized coefficients. The higher the beta value,
the strongest its contribution becomes. Accordingly, training (Beta=.528) makes the strongest
unique contribution to explaining the dependent variable in which the results revealed that, a one
unit increase or positive change in "training" would lead to a 0.528 unit increase the level of
employees‟ job performance when all of other variables remain constant Thus, if training is
increased by 1 unit this will result in 0.528unit increase in performance. This relationship is
positive and significant as shown. And then the contribution followed by empowering (B=.407),
then reward (B=.339). On the other hand, working environment and leadership are contributors to
explaining the dependent variable with beta values of 0.205 and 0.067 respectively. When we see
the statistical significance of each variable from the above coefficients table 4.19, training (Sig. =
.00), reward (Sig. = .001), and empowering (Sig=.00) have statistically significant contribution at
1% confidence interval (Sig<=01) while working environment have a statistically significant
contribution to employees performance in DBE at 5% confidence interval (Sig. < .05). However
Leadership (Sig. = .495) refer that statistically less effect to make any significant prediction on
employees performance.

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Mathematically;

Employees’ job performance = -0.967 + 0.528Training + 0.205Working

environment+ 0.067 Leadership +0.407Empowerment + 0.339Reward.

4.2.4. Test of Multi-Collinarity and Hetrosidascity

Ho, 2006 define multicollinearity as a situation in which the independent variable is highly
correlated. raykove and marcoulides(2006) states that in regression analysis the presence of
multicolinearity implies that one is using redundant information in the model which can lead to
unstable model or multicollinearity is independent variables similarity among each other is very
high. Multicolinearity can be tasted through correlation analysis, value of tolerance and through
employing variance inflation factor (VIF) marcoulides(2006).

If correlation coefficient between two predictor is 1, there is complete collinarity. If correlation

coefficient between two predictor is 0, there is no co linearity at all. Standing from this review,
table 4.14 the coefficient of correlation between each two independent variable is closest to 0, so
there is no collinenarity at all and also if the value of tolerance is greater than 0.1 or 10%, there is
colinarity issue. As shown in table4.19 tolerance of predictors‟ namely working environment,
training, reward, leadership, empowering is 0.876, 0.707, 0.663, 0.956 and 0.767 respectively.
These imply predictors are free from collinarity. The other and commonly way employed to
detecting multicolinarity in different study was VIF. If the value of VIF for each explanatory
variable is < 10 there is no colinarity, unless colinarity is encountered. As shown Table 4.19, the
variance inflation factor for each dependent variable is less than 10. So we can conclude,
multicolinarity is not problem at all.
Hetroscidacity is a violation of multicollinearity assumption which implies not having a constant
variance across independent variable or it is no constant variance among explanatory variables.
The scatter plot in the annex 5 shows that the observations are closest to the mean value. So not
only multicollinarity but also heteroscedasticit is not problem on the study.

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 CHAPTER FIVE: SUMMARY, CONCLUSIONS ANDRECOMMENDATION

5.1. SUMMARY

From the average mean values generated by the descriptive statistics, it shows that training
(mean=2.95), empowerment (mean=2.79), and reward (mean=2.77) are below the average cut-off
point of 3. While other factors such as work environment (mean=3.31), leadership (mean=3.13)
are above the average cut-off point. From this we can understand that employees of development
bank are moderately agreed or satisfied with the internal factors practices which are determined by
HRM. Especially training practice of the bank, empowerment and reward which have the lowest
mean values. And, job performance of employees in the bank under this study is good since the
mean score for job performance is 3.36 which are greater than cut-offvalueand closer to agreement
in the likert scale.
The values generated in the Pearson correlation for training (r=.566, P<0.01) are significantly and
positively correlated with employees‟ job performance. In a related study, Nassazi (2013)
examined the effects of training on employee performance at telecommunication industry depicts
the positive correlation between training and employee performance as r=.233 sig=.000 his study
found out that organizations without viable training programs would fail to get better employees
performance and also the argument supported by (GetamesayBirhane,(2016) on determinants of
employees performance in case of ethio-telecom with r=.359, P<0.01 prove that there positive
relation between training and employees performance. However the finding was disprove by
Gebregziabher, H. (2009) studded on three Ethiopian Public Organizations that training has
adverse effect on employee‟s performance. The finding Vischer (2007) beta =0.48 with sig= .00
and Maree (2007) beta=0.43 with sig=.00. Moreover, study employed by Mulatu, (2014), it was
also tested and proved that training had significant positive effect on employees‟ job performance.
Additionally, the regression result shows the relative contribution of training i.e(Beta=0.528) with
(Sig. = .00) makes the moderate contribution to explaining the dependent variable employees‟ job
performance.This means that change on training by 1 unit can contribute 52.8 unit change in
employee‟s performance.

Working environment has Pearson correlation coefficient (r= 0.343, p<0.01) which show positive
and Significant relation with employees‟ job performance hypothesized as H1 with the Regression
result (Beta=.205) with (Sig. = 0.024). The finding is supported by previous studies made by
(Fisher, 2010) r=0.875 with p=0.00. And alsoIn a related study,Hafeez and Akbar (2015)
examined the impact of working environment on employee performance in the four companies as
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shown there was significant and positive relationship between working environment and
employees‟ performance. Generally wecan infer that Working environment has positive and
significant effect on employees‟ job performance as stated in the alternative hypothesis.
On the other hand leadership practice has a correlation result (r=0.122, p=0.164) and regression
result (Beta=0.067) with (Sig. = 0.495) in which we can conclude that leadership practice is
statically insignificant to predict the dependent variable employees‟ job performance.
Consequently, the alternative hypothesis (H1) is rejected. The result of the finding shows that
leadership practice has less contribution to performance of employees at dbe. However, these
finding contradict against the finding of leaders role is very important in increasing the
performance of individuals at work place (Luthans, Avolio, Walumbwa, & Li, 2005; Peterson
&Luthans, 2003).But not happened at dbe why because 73 (55.3%) of respondents were first
degree holders and the rest 59 (44.7%) of respondents were second degree holders. these implies
that majority of employees at DBE are highly literate. literate peoples know well what they have
to do and do their day to day activity with great responsibility. Consequently, leadership practice
has low contribution to employee‟s performance development at DBE. Hence, there is no evidence
to reject null hypothesis.

Empowerment has (r=0.520, p<0.01), which implies that there is positive significant relationship
with employees‟ job performance as well as (Beta=0.407) with (Sig. = 0.00) which infer that there
is positive effect and has high level of contribution to have good employees performance. The
finding of this study confirms the finding of Chen (2011) noticed that employees performance
improves significantly (beta= 0.438 with sig=0.00) when they are empowered with autonomy,
freedom and opportunities to influence decision making in their jobs or organization. and also
anther comparative study on private and public banks by Haile, (2013) concluded that
empowerment have positive significant relationship with employees‟ performance in the case
public bank. Hence, the null hypothesis (H0) is rejected.

In the descriptive analyse of this study, Reward had been investigated through classifying finical
and non- finical reward and when it combined at regression analysis, it had Pearson coefficient
(r=0.563p<0.01) which shows a positive correlation with employees‟ job performance. This
implies Rewards statically significant for employees‟ job performance in DBE at 99 % confidence
interval. Even though, the regression result (Beta=0.339) with (p<0.01) we can conclude that a
positive change in reward has a corresponding positive change in performance of employees‟ job.
With the null hypothesis (H0) is rejected. The finding supports the studies of (Luthans, 2000) that
finical reward (r=0.549) have direct relationship with employees performance.

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Finally, overall bundles of HRM determined factors which includes training, working
environment, leadership, empowerment andreward have51.7% of the variation on employees‟ job
performance and is contributed in development bank of Ethiopia.

5.2. CONCLUSION

Determinant factors examined in this study, especially training, empowerment, and reward in
development bank of Ethiopia are not being implemented properly as they have to be put into
effect. That means there are still limitations in implementing these practice. Regardless of poor
implementation of HRM determine factors, the job performance of employees is moderate.
However, the bank still not get (utilize) the full potentials of its human recourses due to the poor
implementation of stated determinant factors. As we shown from correlation and regression
results that training has significant positive relation and positive significant effect on employees‟
job performance in Development bank of Ethiopia.

From the statistical analysis the researcher found that working environment has a significant
positive relationship with and as well as significant positive effect on employees‟ job performance
in the bank. Thus, we can conclude that a positive change in working environment can bring
positive improvement on employees‟ job performance. On the other hand, leadership is statically
insignificant to predict the contribution on employee‟s job performance at DBE. In this regard the
bank has no opportunity to get high level of employees‟ job performance since it has no better
contribution than other factors in this study.
Additionally, empowerment has a positive relationship and significant effect on employees‟ job
performance. Accordingly, a positive change in the empowerment has a corresponding positive
change in performance of employees‟ job which is statistically acceptable and validated. Based on
the result we can also infer that there is promising chance to alleviate the current employees‟ job
performance because it has the second greater contribution than other internal factors in this study.
Reward is significantly and positively affects employee‟s performance at development bank of
Ethiopia.
Moreover, the overall bundles of determinant factors incorporated in this study have positive
effect on employees‟ job performance. For that reason, some extent (51.7%) of the employees‟ job
performance is explained by training, working environment, leadership, empowerment andreward
in the study bank.

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 5.3. RECOMMENDATION

The study investigate that the bank has limitations in properly implementing of HRM determined
factors assessed in this research which are training, working environment, leadership,
empowerment and reward. Hence, the management of the bank should review their Human
resource management implementations. In doing so ensuring the participation of identified
employees in the organization is indispensable because it is essential to get enough direct input
concerning the human resource related factors that affect employee‟s performance. Employees
should be inspired for enhanced job performance. If not employees may no longer stay working in
this bank where: they do not get adequate training to reduce difficulties in order to discharging
their responsibilities, there is no equitable salary and no fair bonus, no culture of encouraging for
an employee who score high level of job performance, and poorly designed office layout which
may lead to risk for that specific job.

 Since training was found to be a positive predictor of employees‟ job performance. The practise
of training has been challenged. Accordingly, managements of the Bank should engage in having
annual and clear training program, incompetence employees should be identified and provided the
necessary trainings so as to increase their employee‟s performance which helps to make best use
of its human resources in favour of gaining competitive advantage; enhance employees‟ ability to
adapt to the changing and challenging business environment and technology for better
performance; increase their knowledge to develop creative and problem solving skills; also
important for the survival of the bank. The training practice in development bank is found in low
implementation .as we observed from the descriptive analysis output almost half of the
respondents are dissatisfied and neutral in their response related to training questions. Therefore,
HRM should assure the training needs have been identified using the various analyses through
gathering data to compile all skill gaps which must be identifies the distance between the current
performance and the standard desired performance, they should be set the training objectives that
are close to the gaps and then priorities must be established. After that, decision should be made to
use fitness of training on the objectives of the training program, the trainees selected, and the type
of training intended.

Lastly, they should be measure the success of training in terms of the objectives which are already
stated in advance. The training department should gather the information concerning the training
procedures, appropriateness of media and instruction methods and other relating issues to
determine the overall effectiveness of training through formal questionnaires, Knowledge Review,
Observation, Employee discussion and Skill Gap Analysis.

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 Working environment has positive significant relationship with employees‟ job performance. As
we observe from descriptive analyses, working environment at DBE is moderate with its
limitation to have best working environment. accordingly, managements should provide a better
working environment to its employees, which is adequate in terms of offering adequate facilities
and resources to do their job effectively; and conducive in terms of space, seating arrangement
(ergonomic), ventilation, and lighting for maximum comfort, efficiency, safety, and ease of use
which particularly true for those employees who spend most of the day operating a computer
terminal. And also the bank should make the layout and seating arrangement apply in a consistent
way with clear procedure through all branches in order to be standardized and that will give a
unique icon for the bank. Additional, the management should arrange team work for employees in
order to fulfil their personal affair and to have better duty delegation, interpersonal relationship
and communication among all staffs in work place. This will contribute towards increase the level
of satisfaction and also improvement in employees‟ job performance.

 The study concludes leadership has insignificant contribution for variance in job Performance.
The researcher therefore, recommends that the managements should invest more on training,
Working environment, empowerment and reward than to leadership practice.

 Empowerment has significant and positive influence on employee‟s performance at DBE. But the
descriptive analysis output shows majority of respondents has no freedom to determine how to do,
they perform their tasks with complexity, the job is beyond their scope, they are not confident.
Empowerment is not lose of power rather it is gaining of power. Accordingly, management of the
bank should; recognize the ability of employees and provide authority to use their ability, create
feeling of organization is actually owning them, should recognizing individual employees'
opinions as input ,continuously improve their freedom to do and should facility conditions which
can create confident on their day to day tasks.

 The research revealed that the present salary level offered to employees of commercial banks is
very low and employees are not satisfied. This has led to low workers‟ motivation and employee
turnover. A positive reward practice can be achieved through that: management should pay salary
in accordance with work experience and in equitable manner within the bank and equitable when
compare to others which are in the same industry on the basis assessments of the job relative
internal value and of the external relativity‟s i.e. market rate. So With matter of urgency,
management should make upward adjustment in salary. Besides to equitable, formal and informal
recognition should be regularly considered to recognize good job performer of the bank. Bonuses

69 | P a g e
 should be award based on employee‟s performance evaluation score in a fair and transparent way
in which considers all employees equally without any discrimination.

In conclusion, the bank can even get superior employees‟ job performance than what they are
obtaining if they manage, revise and identify their weak sides in exercising the factors practices.
Because, inappropriate practice of the above five HRM determined factors except leadership
practice can obviously discourage employees from utilizing their potential which in return
negatively affect their job performance and organizational performance as a whole. HRM should
takes a deep care about their employee‟s matters even if the matters look simple. Therefore,
development bank of Ethiopia should get its employees satisfied for higher level of job
performance and organizational performance as a whole this may achieved through the above all
recommendations.

5.4. Suggestion for Further Research

This study only focused on five factors of HRM determined factors that affect employees
performances at DBE and according to the findings on table 4.25shown, 51.7% of employee
performance had been contributed by stated factors. This implies that there are other factors that
affect employee performance at DBE other than training, working environment, leadership,
empowering and reward. Therefore, future research should focus on these other factors which
affect Employees performance like organizational policies, abuse and breaking intervention of
government and managements of the bank, and others.

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 ANNEX;
Annex – 1 –Questioners

HAWASSA UNIVERISTY

SCHOOL OF BUSSNES AND ECONOMICS

MASTERS IN COOPERATIVE DEVELOPMENT AND LEADERSHIP

RESEARCH QUESTIONNAIRES

Research Topic: Effect Of Human resource management practices on Employees‟ Job

Performance

Researcher Name: BekaluYesha

Dear sir/madam

I am a post graduate student of cooperative development and leadership in Hawassa University.

Currently, I am undertaking a research entitled „‟Effect of Human resource management practices
on Employees‟ Job Performance‟‟. You are one of the respondents selected to participate on this
study. Please assist me in giving correct and complete information to present a representative
finding on the current status of the factors affecting employees‟ performance in development Bank
of Ethiopia within Addis Ababa City Branches. Your participation is entirely voluntary and the
questionnaire is completely anonymous.

Finally, I confirm you that the information that you share me will be kept confidential and only
used for the academic purpose. No individual„s responses will be identified as such and the
identity of persons responding will not be published or released to anyone. All information will be
used for academic purposes only.

Thank you in advance for your kind cooperation and dedicating your time.

Sincerely, BekaluYesha

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 Instructions

 No need of writing your name

 For Likert scale type statements indicate your answers with a check mark (√) in the appropriate
box.

Note: Questionnaires are prepared only for employee who has two year and above length of
service; and employees who are non- managerial position.

SECTION A: GENERAL INFORMATION (DEMOGRAPHIC DATA)

Fill in the blanks provided by a means of a cross (√) by indicating your correct choice.

A. Gender:

1= Male
2=Female

B. Age

1=25- 30
2= 31- 36
3= 37 - 42
4= Above 43

C. level of education

1=Bachelor Degree
2= Master
3=PhD
4=other sate here:

D. Marital Status

1=Single
2= Married
3=Divorce
4=Widowed

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 E. Year of service you have work in development bank of Ethiopia?

1=2 – 9years
2= 10 – 20years
3=21– 30 years
4= 31-40 year
5=above 40 years

SECTION B: JOB RELATED QUESTIONS

I. Questions Related to Training

Please indicate your responses to each of the following statements regarding training.
Indicate with a (√) in the appropriate answer box, according to the following code
definitions:

Please rate your response as follows:

1= Strongly Disagree (SD)

2= Disagree (D)

3= Neutral (N)

4= Strongly Agree (SA)

5= Agree (A

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Q.No Statements 1 2 3 4 5

SD D N SA A

The organization has a clear path training that allows

1.
employees to grow.

The organization has an annual employee training

2.
plan

Good opportunities for continuing education are

3.
available.

Incompetent employees are identified and provided

4.
with the necessary support

The necessary training is given to ensure my job

5.
effectiveness.

Employees feel a strong desire to apply what they

6.
have learned during the training.

In-service/on-the job training adequately addresses

7.
the skill gaps.

8. Training Leads the employee reduce their mistakes

The bank follows employee's performance after

9.
training

Trainings that provided are enables to boost my

10.
performance and affect my performance positively.

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II. Questions Related to Working Environment

Please iur responses to each of the following statements regarding working environment. Indicate
with a (√) in the appropriate answer box, according to the following code definitions:

Please rate your response as follows:

1= Strongly Disagree (SD)

2= Disagree (D)

3= Neutral (N)

4= Strongly Agree (SA)

5= Agree (A)

No Statements 1 2 3 4 5

SD D N SA A

11. Job aid, temperature, sound, Open space, seating

arrangement andventilation helped me to do my duties
in better way.

12. The physical surrounding where I am working is

comfortable and convenient to perform my job

13. I get the opportunity to work in team with my

colleagues and to communicate on aspects of our job

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 14. I believe in teamwork, the "what's in it for us"
approach rather than "what's in it for me".

15. I am supported by step-by-step descriptions of how to

do a task during complex.

16. The existing bank‟s environment inspire employees

for high level of performance

III. Questions Related to Leadership

Please indicate your responses to each of the following statements regarding Leadership. Indicate
with a (√) in the appropriate answer box, according to the following code definitions:

Please rate your response as follows:

1= Strongly Disagree (SD)

2= Disagree (D)

3= Neutral

4= Strongly Agree (SA)

5= Agree (A)

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 No Statements 1 2 3 4 5

SD D N SA A

17. I have the opportunity to take part when decisions are

made

18. My leader is unbiased, advice and treats every

employee without discrimination.

19. encourage group members to participate in concerned

activity

20. There is a clear division between the leader and the

followers

21. My supervisor values Rewards or punishments in

order to get better performance

22. I have provided clear expectations from my leader for

what, when and how needs to be done.

23. The existing Leadership practice inspire employees

for high level of performance.

IV. Questions Related to Empowering

Please indicate your responses to each of the following statements regarding empowering. Indicate
with a (√) in the appropriate answer box, according to the following code definitions:

Please rate your response as follows:

1= Strongly Disagree (SD)

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 2= Disagree (D)

3= Neutral

4= Strongly Agree (SA)

5= Agree (A)

No Statements 1 2 3 4 5

SD D N SA A

24. 24 I have freedom to determine how to do my job

25.
26. 25 I have an influence over what happens in my work

27. 26 I have a chance to use personal initiative in my work

28. 27 My job is well within my scope of abilities

29. 28 I perform my day to day task without complexity

30. 29 I am confident about my ability to do my job

31. 30 No need of upper management support to accomplish my

duty

32. 31 My job activities are meaningful to me

33. 32 I care about what I do on my job

34. 33 At all, Empowering improve my performance

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V. Questions Related to Reward

Please indicate your responses to each of the following statements regarding Reward. Indicate
with a (√) in the appropriate answer box, according to the following code definitions:

Please rate your response as follows:

1= Strongly Disagree (SD)

2= Disagree (D)

3= Neutral

4=Strongly Agree (SA)

5=Agree (A)

Please indicate the extent you agree or disagree with each of the following statement using
the given scale

No Statements 1 2 3 4 5

Finical Reward SD D N SA A

Salary is 34.
excellent and inspire me for
better performance

35. Bonus is above competitors and

inspire me for better performance

36. Commission is excellent and inspire

me for better performance

37. Overall financial (intrinsic) rewards

encourages employees to improve
bank performance

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 No Statements 1 2 3 4 5

Non-Finical Rewards SD D N SA A

38. Formal Recognition such as certificate is

given to good performance

39. A family day offered by the bank to

employees really motivates us to work
harder during the year

40. Informal recognition (Such as thank you,

very done, you are a star ) is given to the
job well done

41. Overall non-financial (intrinsic) rewards

encourages employees to improve bank
performance

VI. Questions Related to Employees Performance

Please indicate your responses to each of the following statements regarding employee‟s
performance. Indicate with a (√) in the appropriate answer box, according to the following code
definitions:

Please rate your response as follows:

1= Strongly Disagree (SD)

2= Disagree (D)

3= Neutral

4= Strongly Agree (SA)

5= Agree (A)

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 No Statements 1 2 3 4 5
SD D N SA A

42. I have no lateness and absence from my job

43. I do my work effectively without complaining

I complete my work accurately within the time

44.
allocated

I develop logical and creative solution to

45.
problems

I always meet my performance targets (targets

46.
are realistic).

I perform my day to day task qualitatively

47. (customers served) and quantitatively(minimum
number of errors)

I strictly follow the policies and procedures of

48.
the bank

49. my job performance is affected by training

The existing reward packages like finical and

non-finical reward are helping to motivate me
50.
for higher level of performance

The banking work environment is good for me

51. in terms of enabling to perform well.

My performance is not limited by poor

52. leadership of my supervisor.

The existing empowerment practice help to

53. boost my performance.

Thank you for your involvement and precious time!!!!!

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 Annex – 2; Correlation and Regression Analysis

Correlations
WORK EMPLO
INGEN EMP YEESPE
TRANI VIRO LEADE OWE REWAR RFORM
NG MENT RSHIP RING D ANCE
TRANING Pearson
1 .284** .083 .332** .491** .566**
Correlation
Sig. (2-tailed) .001 .344 .000 .000 .000
N 132 132 132 132 132 132
WORKINGENVIR Pearson
.284** 1 .189* .205* .164 .343**
OMENT Correlation
Sig. (2-tailed) .001 .030 .018 .060 .000
N 132 132 132 132 132 132
LEADERSHIP Pearson
.083 .189* 1 .006 .089 .122
Correlation
Sig. (2-tailed) .344 .030 .948 .310 .164
N 132 132 132 132 132 132
EMPOWERING Pearson
.332** .205* .006 1 .450** .520**
Correlation
Sig. (2-tailed) .000 .018 .948 .000 .000
N 132 132 132 132 132 132
REWARD Pearson
.491** .164 .089 .450** 1 .563**
Correlation
Sig. (2-tailed) .000 .060 .310 .000 .000
N 132 132 132 132 132 132
EMPLOYEESPER Pearson
.566** .343** .122 .520** .563** 1
FORMANCE Correlation
Sig. (2-tailed) .000 .000 .164 .000 .000
N 132 132 132 132 132 132
**. Correlation is significant at the 0.01 level
(2-tailed).
*. Correlation is significant at the 0.05 level
(2-tailed).

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 ANOVAb

Sum of Mean
Model Squares df Square F Sig.

1 Regression 42.680 6 8.536 26.959 .000a

Residual 39.894 122 .317

Total 82.574 132

a. Predictors: (Constant), EMPOWERING, LEADERSHIP,

WORKINGENVIROMENT, TRANING, REWARD
b. Dependent Variable: EMPLOYEESPERFORMANCE

CollinearityDiagnosticsa

Variance Proportions

Condit WORKING LEA

Dimensi Eigenvalu ion (Consta ENVIROM TRANIN REWAR DERS EMPOW
Model on e Index nt) ENT G D HIP ERING

1 1 5.884 1.000 .00 .00 .00 .00 .00 .00

2 .042 11.843 .01 .13 .01 .33 .14 .06

3 .026 14.975 .01 .57 .00 .04 .39 .05

4 .022 16.262 .01 .12 .07 .26 .00 .74

5 .017 18.696 .02 .17 .74 .34 .06 .01

6 .009 26.019 .95 .01 .18 .03 .41 .14

a. Dependent Variable:
EMPLOYEESPERFORMANCE

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 Coefficientsa

Standardize
d
Unstandardized Coefficient
Coefficients s Collinearity Statistics

Model B Std. Error Beta t Sig. Tolerance VIF

1 (Constant) -.967 .458 -2.112 .037

WORKINGENVIR
.205 .090 .151 2.282 .024 .876 1.141
OMENT

TRANING .528 .130 .299 4.060 .000 .707 1.413

REWARD .339 .097 .267 3.513 .001 .663 1.507

LEADERSHIP .067 .098 .043 .685 .495 .956 1.046

EMPOWERING .407 .107 .269 3.809 .000 .767 1.305

a. Dependent Variable:
EMPLOYEESPERFORMANCE

Residuals Statisticsa

Minimu Maximu Std.

m m Mean Deviation N

Predicted Value 1.7072 4.5330 3.3567 .57079 132

Residual -1.23304 2.32419 .00000 .55185 132
Std. Predicted
-2.890 2.061 .000 1.000 132
Value
Std. Residual -2.191 4.130 .000 .981 132

a. Dependent Variable: EMPLOYEESPERFORMANCE

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Annex – 3; Normality Assumptions of Multiple Linear Regression;

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Annex – 4; LinearityAssumption of MLR

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Annex – 5; Multi-collinearityand Heteroscedasticityassumption

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