ADMAS UNIVERSITY

SCHOOL OF POSTGRADUATE STUDIES

THE INVESTIGATION OF EMPLOYEE PERFORMANCE APPRAISAL
SYSTEM: THE CASE OF ETHIOPIAN ROADS AUTHORITY

HUMAN RESOURCE MANAGEMENT

TERM PAPER

PREPARED BY

KIDANEWORK ZEWUDE

4117/21

JULY, 2022

ADDIS ABABA, ETHIOPIA

 Contents
List of Tables..................................................................................................................................iii
ACRONYMS AND ABBREVIATIONS.......................................................................................iv
CHAPTER ONE..............................................................................................................................1
1. INTRODUCTION...................................................................................................................1
1.1. Background of Study........................................................................................................1
1.1.1. Background of the organization.................................................................................2
1.2. Objective of the Study.......................................................................................................3
1.2.1. General objective.......................................................................................................3
1.2.2. Specific Objectives....................................................................................................3
1.3. Research Questions...........................................................................................................3
1.4. Significance of the Study..................................................................................................3
1.5. Limitation of the Study.....................................................................................................4
1.6. Organization of the Study.................................................................................................4
CHAPTER TWO.............................................................................................................................5
2. REVIEW OF RELATED LITERATURE...............................................................................5
2.1. The Concept of Performance appraisal.............................................................................5
2.1.1. Objectives of Performance Appraisal........................................................................5
2.1.2. Effectiveness of Performance appraisal.....................................................................6
2.1.3. Challenges of Performance Appraisal.......................................................................7
2.1.4. Limiting the Effects of Supervisory Bias..................................................................7
2.1.5. Performance Appraisal Techniques...........................................................................8
2.2. Empirical Review..............................................................................................................9
CHAPTER THREE.......................................................................................................................11
3. Research Methodology..........................................................................................................11
3.1. Research Design..............................................................................................................11
3.2. Research Approach.........................................................................................................11
3.3. Data Type and Data Source............................................................................................11
3.3.1. Primary Sources.......................................................................................................11
3.3.2. Secondary sources...................................................................................................11

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 3.3.3. Data Collection Method...........................................................................................11
3.4. Population and Sampling................................................................................................12
3.4.1. Target population.....................................................................................................12
3.4.2. Sampling Techniques...............................................................................................12
3.5. Variable Measurement and Instrument...........................................................................12
3.6. Source of Data and Methods of Data Collection............................................................12
3.6.1. Data Source..............................................................................................................12
3.7. Method of data Analysis.................................................................................................13
CHAPTER FOUR.........................................................................................................................14
4. DATA ANALYSIS AND INTERPRETATION...................................................................14
4.1. Data Analysis Pertaining to the Study............................................................................14
4.1.1. Formulation of the Current Performance Appraisal System...................................14
4.1.2. Level of Effectiveness of the Current Performance Appraisal System...................16
4.1.3. Employees’ Perception towards the Current Performance Appraisal System.........26
CHAPTER FIVE...........................................................................................................................28
5. CONCLUSIONS AND RECOMMENDATIONS................................................................28
5.1. Conclusion......................................................................................................................28
5.2. Recommendations...........................................................................................................29
APPENDICES...............................................................................................................................34

List of Tables
Table 4.2 1 Descriptive Data on Formulation of the current Performance Appraisal System in
ERA...............................................................................................................................................14

Table 4.3 1 Descriptive data on Objective Setting 16

Table 4.4 1 Descriptive data on Performance Standard 18

Table 4.5 1 Descriptive data on Communication 19

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Table 4.6 1 Descriptive data on Measuring Performance 20

Table 4.7 1 Descriptive data on Measuring Performance 22

Table 4.8 1 Descriptive data on Feedback 23

Table 4.9 1 Descriptive data on Action 24

iv
 ACRONYMS AND ABBREVIATIONS
BSC Balanced Score Card
ERA Ethiopian Roads Authority
FDRE Federal Democratic Republic Of Ethiopia
HRM Human Resource Management
HR Human Resource
KPI Key Performance Indicator
PA Performance Appraisal
PAS Performance Appraisal System

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 CHAPTER ONE

1. INTRODUCTION
1.1. Background of Study
The concept of performance appraisal has become the most controversial issue in management
scope. In order to achieve organizational goals, managers must be able to determine and assess
performance levels of both an organization and its individual employees (Kurt, 2004) as cited on
(Sualihu Bintu, 2014). Failing to provide a well-structured appraisal system leads to
unauthorized personnel to judge the performance of their staffs, subordinates in the way which is
informal, arbitrary, and illegally. The human inclination to judge can create serious motivational,
ethical and legal problems in the workplace. Without a structured appraisal system, there is little
chance of ensuring that the judgments made will be lawful, fair, defensible and accurate
(Jansirani et.al, 2013).

Organizational effectiveness is highly dependent on organization’s practice of performance

appraisal in utilizing the maximum effort of their employees. Performance appraisal is a
continuous process of setting objective and standard, communicating the standard, evaluating
actual performance, giving feedback and taking corrective action on the performance of
individual employees and teams by aligning performance with the strategic goals of the
organization.

For instance Noe; et al (2011), noticed that various decisive human resource practices that should
support the organization’s strategy through different ways for instance analyzing work and
designing jobs, deciding employee size, with specific knowledge and skills are needed, attracting
potential employees, choosing employees, teaching employees how to perform their jobs and
preparing them for the future, evaluating their performance, rewarding employees, and creating a
positive work environment. Effective and efficient management of these practices allow
organizations to perform well.

Most of all, performance appraisal is the key ingredient of performance management (Varsha
Dixit, 2007). In a workgroup, members, consciously or unconsciously, make opinion about
others. The opinion may be about their quality, behavior, way of working, etc. Such an opinion
becomes basis for interpersonal interaction. In the same way, superiors form some opinions

1
about their subordinates for determining many things like salary increase, promotion, transfer,
etc. In large organizations this is formalized and takes the form of performance appraisal.

1.1.1. Background of the organization

ERA since 1951 has been established and re-established in different proclamation number to
accomplish the specific purpose. Now, ERA has re-established as regulatory body by the council
of Ministries Regulation No.247/2011 with responsibility to plan and manage the road network
and supervise road works and accountable to Ministry of Transport. The organization Head
office situated in the middle of the city around Mexico in front of Shebelle Hotel.

Performance appraisal in ERA seems to be mandatory as it grants good working environment for
all concerned in the organization. As it has been discussed above appraisal systems are
advantageous for all parties, i.e. employees, mangers, and organizations itself in achieving
prestated goals and objectives in motivating employees, assessing the current status, organizing
documents on the performance of employees from which the managers made organizational
decisions.

Application of performance appraisal by itself doesn’t guarantee good organizational

performance. Consideration of factors which are important in determining effective utilization
performance appraisal systems would be appropriate. In this regard, performance appraisal
systems effectiveness is evaluated in terms of; 1) setting clear objective and standard of
performance, 2) communication, 3) measurement of actual performance, 4) comparison of actual
and standardized performance, 5) giving feedbacks to respective actions accordingly.

Overall, the major factors associated with effective performance appraisal allows continuous
assessment of employee’s performance and such an act allows the organization to pinpoint the
gaps and come up with appropriate corrective actions.

The research strives to find out the major problems and challenges in effectiveness of
performance appraisal systems of the organization under study. In doing so, the paper provided
detailed information on best possible performance appraisal practices and recommend best
2
possible practices which will be used to fill the existing gaps and take corrective measures which
will have significant contribution in achieving organizational objectives.

1.2. Objective of the Study

1.2.1. General objective
The main objective of this study was assessing effectiveness of the employee performance
appraisal system in the case of Ethiopian Roads Authority at the head office level.

1.2.2. Specific Objectives

 To examine how the current performance appraisal system is formulated at Ethiopian
Road Authority.
 To identify presence of effective Implementation of the seven processes of performance
appraisal system in Ethiopian Road Authority.
 To identify the perception of employees towards the current performance appraisal
system.

1.3. Research Questions

The following answers will be answered after the study is conducted;

1. What is current performance appraisal system formulated at Ethiopian Road Authority?

2. What are the deviations in effectiveness of the performance appraisal system relative to
seven performance appraisal processes at Ethiopian Road Authority?
3. What is the perception of employees towards the current performance appraisal system?

1.4. Significance of the Study

Effective completion of this research will be helpful in following ways;

 The researcher will be enriched with concepts related to performance appraisal which
will be beneficial in building effective career.
 The organization will look deep into the current performance appraisal system through
assessment and evaluation in finding out the problems and challenges hindering its
effectiveness.
 Most of all the findings will be used in derivation of correction of problems associated
with current appraisal system.

3
  Finally, the research can be used as a source for further studies in the area under study.

1.5. Limitation of the Study

It is obvious that limitations are one of the common features of most researches and the
researcher has also met with some limitations in conducting this study. Some of the employees
were not reluctant to fill the questionnaire because they were busy of their daily routine. And
also, punctuality has been the other problem regarding respondents. Most of all it has been
difficult to find related studies as previous studies on the subject matter were few in number and
it has limited researcher’s point of view of subject matter. Further, challenges like time and
budget \have limited the range that the researcher could travel in coming with more inclusive and
widened scope of study.

1.6. Organization of the Study

This research study is organized in five chapters. The first chapter are introduction, includes
background of the study and the company, statement of the problem, objective of the study,
research question, significance of the study, and scope of study. Chapter two present review of
relevant literature. Chapter three focus on research design and methodology of the study. Chapter
four demonstrate research finding, analysis and interpret data obtained from respondent. Chapter
five focus on conclusion and recommendation.

4
 CHAPTER TWO

2. REVIEW OF RELATED LITERATURE

2.1. The Concept of Performance appraisal
Performance is an outcome, or result of an individual’s actions. An individual’s performance
therefore becomes a function of ability and motivation (Ainsworth et al., 2002). Performance
Assessment (also performance appraisal, evaluation, measurement) becomes a continual review
of the job-related task accomplishments or failures of the individuals within the organization. A
major consideration in performance improvement involves the creation and use of performance
measures or indicators; which are measurable characteristics of products, services, processes, and
operations the company uses to track and improve performance.

Shelley (1999) describes performance appraisal as the process of obtaining, analyzing and
recording information about the relative worth of an employee. The focus of the performance
appraisal is measuring and improving the actual performance of the employee and also the future
potential of the employee. Its aim is to measure what an employee does. Shelley again considers
PA as a systematic way of reviewing and assessing the performance of an employee during a
given period of time and planning for his future. It is a powerful tool to calibrate, refine and
reward the performance of the employee. By focusing the attention on performance, performance
appraisal goes to the heart of HR management and reflects the management's interest in the
progress of the employees.

Again, Moats State that performance appraisals and standards have also reflected a move toward
decentralization. In other words, the responsibility for managing the entire appraisal process has
moved closer to the employees who are being evaluated; whereas past performance reviews were
often developed and administered by centralized human resources departments or upper-level
managers, appraisals in the 1990s were much more likely to be conducted by line managers
directly above the appraisee.

2.1.1. Objectives of Performance Appraisal

The objectives of the appraisal scheme should be determined before the system is designed in
detail. The objectives will to a large extent dictate the methods and performance criteria for
appraisal so they should be discussed with employees, managers and trade unions to obtain their

5
views and commitment (Fletcher, 1994). The main objectives of an appraisal system are usually
to review performance, potential and identify training and career planning needs. In addition the
appraisal system may be used to determine whether employees should receive an element of
financial reward for their performance (Derven, 1990).

Wesley (2004) also identifies some objectives of performance appraisal s indicated below: 1) to
review the performance of the employees over a given period of time. 2) To judge the gap
between the actual and the desired performance. 3) To help the management in exercising
organizational control. 4) Helps to strengthen the relationship and communication between
superior – subordinates and management – employees. 5) To diagnose the strengths and
weaknesses of the individuals so as to identify the training and development needs of the future.
6) To provide feedback to the employees regarding their past performance. 7) Provide
information to assist in the other personal decisions in the organization. 8) Provide clarity of the
expectations and responsibilities of the functions to be performed by the employees. 9) To judge
the effectiveness of the other human resource functions of the organization such as recruitment,
selection, training and development. 10) And last but not least to reduce the grievances of the
employees.

2.1.2. Effectiveness of Performance appraisal

The effectiveness of a system is defined as an external standard “of how well the system is
meeting the demands of the various groups and organizations that are concerned with its
activities” (Pfeffer and Salancik 1978) which approximately is a construct “for doing the right
things” or having validity of outcome (Hines et al. 2000).

Effectiveness is by definition a qualitative measure set by evaluator. Möller and Törrönen (2003)
argue that effectiveness “refers to the system’s ability to invent and produce solutions that
provide more value to stakeholders of the institution”.

Moats stresses again that the uniformity of the appraisal structure is vital because it ensures that
all employees are evaluated on a standardized scale. Appraisals that are not uniform are less
effective because the criteria for success or failure become arbitrary and meaningless.
Furthermore, uniformity allows a company to systematically compare the appraisals of different
employees with each other. Moats contend that companies must address four decisions when

6
structuring their appraisal systems: (1) what should be assessed? (2) Who should make the
appraisal? (3) Which procedure(s) should be utilized? And (4) how will the results be
communicated? In determining what to evaluate, designers of an appraisal system usually
consider not only results, but also the behaviors that lead to the results (Bodil, 1997)

2.1.3. Challenges of Performance Appraisal

There are chances of opposition for valuation due to fear. If the evaluation system is poor, it will
not give adequate effect. Rater’s problems like leniency or harshness error, central tendency
error, personal bias error, contrast error are also affecting the performance appraisal of an
employee (Rasch 2004).

Each employee should evaluate by his supervisor and to discuss each other to set objectives for
upcoming evaluation. This discussion should cover the review of overall progress, problems
encountered, performance improvement possibilities, long term career goals, specific action plan
about job description and responsibilities, employee development interest and needs, to
concentrate specific areas of development, to review performance objectives and performance
standard, ongoing feedback and periodic discussions

2.1.4. Limiting the Effects of Supervisory Bias

McNamara suggests reasonable steps which can be taken to limit the effects of supervisory bias.

a. Awareness Training: Supervisors need to be informed of the types of subtle bias that can
interfere with their performance as appraisers. They need to understand that the
in-group/out-group bias, for instance, reduces the morale and motivation of their
subordinates.
b. Developing Poor Performers: Incentives, financial or non-financial, may be offered to
encourage supervisors to make special efforts to help poor performers improve.
Supervisory appraisals, for example, might stress the importance of working with poor
performers to upgrade their performance. The possibilities are extensive.
c. Counseling, Transfer, and Termination: There is always the possibility that an employee
who receives poor appraisal results is in fact a chronic poor performer. No employer is
obliged to tolerate poor performance forever. Consistently poor appraisal results will
indicate a need for counseling, transfer or termination. The exact remedy will depend on
the circumstances.

7
 2.1.5. Performance Appraisal Techniques
As Moats (1999) points out, different performance appraisal techniques can be classified as
either past-oriented or future-oriented.

2.1.5.1. Past-Oriented Techniques

According to Moats, past-oriented techniques assess behavior that has already occurred. They
focus on providing feedback to employees about their actions, feedback that is used to achieve
greater success in the future. Moats present techniques under this form as discussed below:

Rating Scales and Checklists: According to Moats, some of the traditional forms of performance
appraisals such as rating scales and checklists remain popular despite their inherent flaws. They
entail an assessor providing a subjective assessment of an individual's performance based on a
scale effectively ranging from good to bad or on a checklist of characteristics. Typically, basic
criteria such as dependability, attitude, and attendance are listed.

2.1.5.2. Behaviorally Anchored Rating Scales (BARS)

According to Moats a fairer approach to performance appraisal is behaviorally anchored rating
scales (BARSs), which are designed to identify job-related activities and responsibilities and to
describe the more effective and less effective behaviors that lead to success in specific jobs. The
rater observes a worker and then records his or her behavior on a BAR. The system is similar to
checklist methods in that statements are essentially checked off as true or false. Moats points out
however that, BARS differ in that they use combinations of job-related statements that allow the
assessor to differentiate between behavior, performance, and results.

2.1.5.3. Forced-Choice Appraisals

Forced-choice appraisals consist of a list of paired (or larger groups of) statements. According to
Moats the statements in each pair may both be negative or positive, or one could be positive and
the other negative. The evaluator is forced to choose one statement from each pair that most
closely describes the individual He contends that Forced-choice appraisals are typically easy to
understand and inexpensive to administer, but they lack job relatedness and provide little
opportunity for constructive feedback.

2.1.5.4. Critical Incident Evaluation Techniques

Critical incident evaluation techniques require the assessor to record statements that describe
good and bad job-related behavior (critical incidents) exhibited by the employee. According to

8
Moats, the statements are grouped by categories such as cooperation, timeliness, and attitude. An
advantage of this system is that it can be used very successfully to give feedback to employees.
Furthermore, it is less susceptible to some forms of bias. On the other hand, critical incident
assessments are difficult because they require ongoing, close observation and because they do
not lend themselves to standardization and are time consuming (Kurt 2004).

Field Review Appraisal Techniques: Field review appraisal techniques entail the use of human
resource professionals to assist managers in conducting appraisals. Moats says that the specialist
asks the manager and sometime coworkers’ questions about an employee's performance, records
the answers, prepares an evaluation, and sends it to the manager to review and discuss with the
employee. This type of system improves reliability and standardization because a personnel
professional is doing the assessment. For the same reason, it is less susceptible to bias or to legal
problems. But field reviews are generally expensive and impractical for most firms, and are
typically utilized only in special instances—to counteract charges of bias, for example
( McNamara 2000).

2.1.5.5. Future-Oriented Techniques

In contrast, Moats says that future-oriented appraisal techniques emphasize future performance
by assessing employees' potential for achievement and by setting targets for both short- and
long-term performance. He discusses these forms of techniques as presented below:

2.2. Empirical Review

Performance appraisal sounds simple but researches tell us that it is commonly used in
performance feedback and identify individual employee’s strengths and weaknesses (Ruddin,
2005). For example, studies were done using a direct effects model to investigate communication
openness based on different samples, such as perceptions of 229 workers of public listed
companies in Klang Valley, Malaysia (Sudin, 2011) and perceptions of 133 employees of
multinational companies in Malaysia (Darehzereshki, 2013). Outcomes of these studies found
that perceived value of outcome and perceived fair treatment had increased when the appraisers
able to clearly giving explanations about the appraisal system goals, policies and procedures, as
well as adequately providing feedback in determining employee performance scores.

9
Also another research has broadly analyzed the impact of the social context of performance
appraisals on employee reactions to these appraisals (Pichler, 2012). For instance, employees‟
satisfaction with the performance appraisal process as a whole, the performance appraisal
feedback, or employees‟ evaluations of the perceived quality, justice, and fairness of the
performance appraisal regime (Greenberg, 1986: Gupta & Kumar, 2013). Furthermore, employee
participation in the performance appraisal process is positively related to the satisfaction
with the performance appraisal system, perceived fairness, and acceptance of such a practice
(Cawley et al., 1998).

Brown et al. (2010) analyze the relationship between performance appraisal quality measured by
clarity, communication, trust, and fairness of the performance appraisal process and job
satisfaction and commitment based on a sample of more than 2,300 Australian non-managerial
employees of a large public sector organization. They find that employees who report a low
performance appraisal quality (lowest levels of trust in supervisor, poor communication, and lack
of clarity about expectations, perception of a less fair performance appraisal process) also report
lower levels of job satisfaction and commitment.

Furthermore, (Cawley et al., 1998) found that clarity of performance expectations affected the
motivation to a great extent. Feedback mechanism and open door policy affected motivation to a
great extent. Integrity and fairness affected job perform and employees motivation to a great
extent. In addition, distributive fairness affected job performance to a moderate extent. The study
found that ideas and innovations, absenteeism/tardiness and timeliness had improved for the last
five years. The study found that appraisal motivates staff by clarifying objectives and setting
clear future objectives with provision for training and development needs to establish the
performance objective. Communication provides employees with the chance of exercising a level
of process control. Trust in supervisors is important for determining satisfaction with the
appraisal system. Contemporary research studies have also linked performance appraisal to
performance of employees as Resella, 2011 revealed that performance evaluation practices
have a significant and positive impact on the performance of employees. Najeeb (2011) studied
Performance Appraisal in Habib Bank Limited and concluded that transparent appraisal system
is vital to an organization and the results of the appraisal affect the performance of any employee
heavily.

10
 CHAPTER THREE

3. Research Methodology
3.1. Research Design
Descriptive study was used in this study, because, the researcher has no control or effect on the
variables of the study. Descriptive research method was used to describe the phenomena in
gathering, summarizing, presenting and interpreting the information on a specified subject. Thus,
descriptive study was applied to assess the effectiveness of existing performance appraisal
system in the organization under study. The researcher has also utilized the survey strategy for
this study because it creates room for gathering large amounts of data from a sizeable population
in a cost-effective manner. Hence, the convenient research design considered suitable for this
study was descriptive case study.

3.2. Research Approach

In terms of approach a research can be divided into qualitative and quantitative. Qualitative
research is concerned with subjective assessment of attitudes, opinions and behavior.
Quantitative research method involves a numeric or statistical approach to the research. Aiming
to achieve the objectives of the study, both quantitative and qualitative methods have been
chosen.

3.3. Data Type and Data Source

3.3.1. Primary Sources
This study applied primary data, which will be collected through survey method using a
questionnaire and semi-structure interview.

3.3.2. Secondary sources

Appropriate secondary data examined from the organization publication and report produced
books, literatures, websites (internet) and available source for conducting the research.

3.3.3. Data Collection Method

The study was conducted through self-administered questionnaire and semi-structured interview
to assess effectiveness of performance appraisal systems in ERA. The questionnaire and semi-
structured interview were used as primary data collection methods as both methods have their
own advantage because of it is low cost, it was also proven to be free from bias of the

11
respondents, it also gave the correspondence adequate time to give well thought answers and
since large samples could be made use of, the results more dependable and reliable (Kothari,
2004). Additionally, the study has reviewed previous studies, journals to come up with inclusive
scope.

3.4. Population and Sampling

3.4.1. Target population
ERA comprises different interrelated directorates. This classification is made based on variety in
nature of their tasks. As of now the organization has number of permanent employees of 1300
and this number would be the total population of the study. Samples from each stratum i.e.
human resource, finance, technical support and others have been taken. But, this number would
eb too much to investigate this term paper. Then, the researcher decided to allow 50 employees
of ERA to take part in the study.

3.4.2. Sampling Techniques

Random sampling technique was used to allow employees to participate in the study in
distributing questionnaire.

3.5. Variable Measurement and Instrument

Objective setting, performance standard, communication, measuring performance, compare
actual performance against standard, feedback and action was used as variables in measuring the
effectiveness of performance appraisal systems in ERA in view of study participants.

Each instrument has its own importance, this study has made use questionnaire to be filled by the
study participants. In doing so, the questionnaire was distributed to all 50 selected employees of
ERA from the head office. Additionally, the study has employed semi-structured interview with
HR director of the organization to have specific additional information.

3.6. Source of Data and Methods of Data Collection

3.6.1. Data Source
The study used data from both primary and secondary sources.

3.6.1.1. Primary Sources

This study applied primary data, which was collected through survey method using a
questionnaire and semi-structure interview.

12
 3.6.1.2. Secondary sources
Secondary data was collected from previous studies, reports, literatures, and websites.

3.7. Method of data Analysis

After collection of data, field and in-house editing and coding has been made. The data entry has
been done by using Statistical Process for Social Science (SPSS). As well as tables, frequencies
and percentages are used to display the survey results.

Both qualitative and quantitative analysis techniques will be employed to demonstrate processed
data through the use of descriptive statistical tools such as frequency, valid percentages,
minimum and maximum value of results with the help of SPSS. Descriptive analysis used to
describe the data collected from questionnaire in terms of frequency, percentage, and
qualitatively analyze the findings from the questionnaire and semi-structured interview.

13
 CHAPTER FOUR

4. DATA ANALYSIS AND INTERPRETATION

4.1. Data Analysis Pertaining to the Study
4.1.1. Formulation of the Current Performance Appraisal System
Table 4.2 1 Descriptive Data on Formulation of the current Performance Appraisal System in
ERA

Disagree

Strongly
Disagree
Strongly

Agree
Neutral

Agree
No.
Statements

1 The current PAS is directly related to the job and F 8 13 17 39 3

the goal of the organization % 16 26.5 33 19.5 5

2 The PA is easy to use and understood by both F 8 17 15 9 1

supervisors and subordinates % 16 33 30 19 2

3 The PAS was developed with inputs from the F 12 19 14 4 1

staff. % 23 38 28 8 2

Provision of coaching, counseling and F 14 15 13 6 1

4 support when there is performance problem. % 29 29 27 12 2

Good performance is recognized 15 18 10 6 1

5 F
% 30 35.5 20 11 2
Possibility of appeal for biased or inaccurate 7 18 17 7 1
6 performance rating. F
%
13.5 36 34 13.5 2
Source: Own Survey, 2022

Agreeing to the respondent’s see, the pertinence of the current execution examination framework
to the targets of the work and objectives of the organization, 42.5% of the respondents answered
that the current execution evaluation framework is defined without considering the objective of
work and objectives of the organization. On the other hand, 24.5% of the respondents accepted
that the current execution examination framework is built by taking under consideration
particular work goals and broader objectives of the organization. The remaining 33%
respondents react has a normal of the two sides. From this investigation, it is clear that the lion's
share rate of the respondent’s punted that the current execution examination framework isn't
related to the goals of employees’ employments and the objectives of the organization.

14
With respect to effortlessness and understandability of the execution evaluation framework to
utilize by bosses and subordinates, 49% of the respondents answered that the current execution
examination framework isn't easy to utilize conjointly not well-understood by both bosses and
subordinates. On the other hand, 21% of respondents accept that the current execution evaluation
framework is simple to utilize and is well caught on by administrators and subordinates. The rest
30% respondents are within the center of the street; they remain with normal state of mind
towards the thing. From this elucidation it is conceivable to comprehend that most of the
respondents felt that the current execution evaluation framework was not simple to utilize and
reasonable by both the administrator and themselves. In this manner, it is anticipated from Time
to guarantee that the current Dad framework is simple to utilize and well characterized to meet
this necessity and overcome misconception by all partners related with the organization on the
subject matter.

Concerning employee’s engagement within the advancement prepare of the current execution
evaluation framework, 61.5% replied that the framework was created ineffectively or without
permitting employees to require portion within formulation. In differentiate, 11% of the
respondents have said that there a hone of taking inputs from representatives. The other 27.5%
of respondents found to be unbiased. In like manner, it is fair to say the current performance
appraisal framework is created with a really negligible support of representatives within the
organization beneath study.

On the question about the presence of coaching and counseling of underperforming

employees, 61.5% of the respondents responded that there has been no experience of coaching
and counseling intervention at all in the organization, whereas 15% of respondents replied that
they have got the necessary coaching and counseling when they face such kind of performance
problems. The other 27% of the respondents said that they are in the middle of the agreement
about the presence of such an intervention. Form the result; one can infer that the current
performance appraisal system is not properly formulated in a way which enables too closely
follow the performance of employees and take the appropriate coaching and counseling as a
corrective action when it is needed.

Concerning the recognition of workers, whether great execution is recognized or not within the
organization, 65.5% of the respondents have affirmed that Time doesn’t recognize great

15
exhibitions. On the other side, 14.5% of the respondents accept that legitimate accentuation
would be given for great exhibitions. The remaining 19.5% of the respondents found on the
normal or didn’t choose either of the two sides. By and large, it is conceivable to summarize
that the current execution examination framework in Period won’t provide appropriate
accentuation for great exhibitions.

With respect to the ultimate address which is the nearness of a organized way to offer
execution rating issues when workers feel it is one-sided or wrong, around 49% respondents
replied that there's no reasonable environment to offer to higher authorities though 16% of the
respondents answered the nearness of methods to request to the following boss who is
prevalent to the rater. But, the rest 34.5% respondents have nothing to say on the thing. For the
most part, there's no common understanding among workers almost the issue of appealing.

By and large, on the premise of comes about over taking the cruel of all six questions utilized to
survey the definition of current performance evaluation framework, most of the respondents i.e.
54.25% reflected that the current performance evaluation framework in Time isn't suitably
defined or nearly is inadmissible. On the other hand, as it were 17% of the respondents found to
have great state of mind towards the current formulation of PAS. Typically, a colossal sign that
the current performance appraisal framework adequacy is at stake without making advance
burrowing as the detailing is found to be tricky.

4.1.2. Level of Effectiveness of the Current Performance Appraisal System

4.1.2.1. Objective Setting
Table 4.3 1 Descriptive data on Objective Setting

Statements
Disagree
Disagree
Strongly

Strongly
Neutral

Agree

Agree
Des.

Performance objectives are clearly defined in F 2 18 14 13 3

the appraisal process % 4 36.5 28.5 25 6.5
My performance objective is directly related to F 2 21 16 7 4
the objectives of the organization % 4.5 42.5 32 13 8
Discussion is made between the raters and me F 1 19 14 12 5
on the objectives % 2 37 28 23.5 9

16
I’m encouraged to participate during objective F 2 19 63 16 3
setting % 4 38 31.5 19.5 6.5
Source: Own Survey, 2022

With respect to the address around setting clear definitions, larger part (40%) of respondents
accepts as the organization doesn’t have well characterized and clear performance goals within
the examination handle. Other 31.5% of the respondents have said that there are clearly
characterized performance destinations. The remaining 28.5% of the respondent chose to remain
unbiased. Subsequently, viability of current performance examination framework imperiled by
nonappearance of clear and well characterized performance destinations which can be utilized as
direction to its workers.

Relevance of performance objectives of employees and organizational objectives in the

organization examined and 47% of the respondents replied adequate consideration of
organizational and specific objectives has never been given in formulation of the system.
Whereas, 21% of the respondents believed that the current performance appraisal system is
developed on the basis of both specific jobs and organizational objectives. And the remaining
32% of respondents stayed in between the two sides. The survey result indicates that only few
respondents believe that the appraisal system and goals and objectives of the organization are
aligned with specific objectives of employees whereas significant number of employees does not
agree with the statement.

Employee respondents were too inquired in case dialog is made between them and the rater on
organizational destinations and as a result 39.5% of the respondents answered that no discourse
has been experienced. On the other way, 32.5% of the respondents accepted that there exists a
discourse between employees and their particular rater. Also, the rest 28% of respondents picked
not one or the other of the two sides. The comes about appear that still moderately little number
of workers feels the presence of the specified discourse on targets. Consequently, from this truth,
one can get it that viability of the current performance evaluation framework of Time is found to
have deviations because it needs the nearness of satisfactory discourses on organizational goals.

Workers forward their demeanor towards support from the organization on employee’s interest
on objective setting. Larger part or 42% of respondents have answered that they have never taken
part within the objective setting handle. Within the opposite, 26% of the respondents have
17
concurred that the current performance examination framework gives chance for employees’
support. The remaining 32% of respondent’s state of mind is found in-between. Thus, it is
conceivable to say that the current execution examination framework has holes with respect to
employees’ interest amid objective setting.

4.1.2.2. Performance Standard

Table 4.4 1 Descriptive data on Performance Standard

Disagree
Disagree
Strongly

Strongly
Neutral
Statements

Agree
Agree
Des.
The performance standards of my job are F 5 16 15 12 2
realistic % 10.5 32 29 24.5 4
Clear performance standards are set before 5 17 16 10 2
F
proceeding the performance appraisal process
10 34 32 19 4
%

The organization gives me standards which are F 10 74 63 43 10

related with my job % 5 37. 31.5 21.5 5
The performance standards make me stretch 7 16 15 10 2
F
and use my full potential
% 14 32 30 20 4

Source: Own Survey, 2022

Agreeing to the study result within the over table with respect to the address on whether the
performnace measures are practical or not, lion's share (42.5%) of the respondents reacted that
their performance guidelines are distant from being reasonable. On the opposite, 28.5% of the
respondents have answered as their execution benchmarks are reasonable and the rest of 29% of
the respondents are impassive almost the articulation or unbiased. Based on the extent of the
result of respondent the performance standards are not reasonable, we will say that achievability
of execution benchmarks didn’t get the desired accentuation within the organization.

Almost the hone of setting clear execution benchmarks some time recently continuing to the
execution assessment, 44.5% of the respondents have instructed that the organization doesn’t set
clear execution benchmarks. It is the conviction of the other 22.5% of respondents reflected that

18
the organization clearly set the specified performance standards considering that it may be a
prerequisite to achieve the assessment exercises. The remaining 33% of respondents are in-
between. Depending on the over comes about; it is conceivable to say most of the execution
assessments are conducted without having clearly pre-established execution criteria.

Hopping to the 3rd itemed address, workers were inquired to reflect their deliberate in case the
measures from the organization are related with their work. Appropriately, 42% of the
respondents said that the execution guidelines and their work are disconnected. While, 26.5% of
the respondents have concurred that the existing execution benchmarks are related with the given
work. In between these two levels of assention, the remaining 31.5% of respondents are impartial
on this point of see. Taking this truth, it can be said that the execution guidelines are arranged
without considering the genuine highlights of the work and the existing setting.

4.1.2.3. Communication
Table 4.5 1 Descriptive data on Communication

Statements

Disagree
Disagree
Strongly

Strongly
Neutral

Agree
Agree
Des.

I am clearly communicated about the purpose F 18 13 13 4 2

of performance appraisal % 36 26 26 8 4
Formal communication processes are in place F 9 23 14 5 2
to ensure that I understand the organization’s % 18 46 24 10 4
objective.
There is a transparent discussion across the F 15 16 3 14 2
organization on performance appraisal issues. % 30 32 6 28 4
Source: Own Survey, 2022
On the basis of data from the above table, 62% of respondents have agreed on the absence of
clear communication about purpose of the current performance appraisal system. On the other
way, 12% of respondents believed that they are clearly communicated about the current
performance appraisal purpose and 26% of respondents are neither of the two sides.

64% of respondents have replied no formal communication processes is in place to ensure that
employees understand the organization’s objective, whereas 14% of the respondents are replied
that there is formal communication processes to ensure that they understand the organization’s

19
objective and 24% of the respondents neither of the two option. These results show that majority
of the employees have agreed that they are not clearly communicated on the purpose of the
appraisal system and absence of formal communication process which enables to make
employees aware of the objectives of the organization. This implies that effectiveness of the
appraisal system is negatively affected because of lack of communication on performance
appraisal purpose and on understanding of the organization objective.

On the ultimate explanation of the over table i.e. related to straightforwardness, the analyst
inquired representatives to put forward their state of mind on straightforwardness of discourse on
execution examination framework and 62% of respondents have answered straightforwardness
discourse has never been issued on execution evaluation things. On the other conclusion, 32% of
the respondents accept that the organization embrace straightforward discourse on execution
examination. The rest 6% of respondents choose not one or the other of the two sides. Taking
this in to account, the researcher is persuaded as there's no straightforward talk. For the most part
talking, this can be another green light which suggests viability of the existing performance
evaluation framework is exceedingly influenced since of need of straightforwardness related
with the framework.

4.1.2.4. Measuring Performance

Table 4.6 1 Descriptive data on Measuring Performance

Statements
Disagree
Disagree
Strongly

Strongly
Neutral

Agree
Agree
Des.

My immediate boss discusses regularly my job F 11 16 12 7 4

performance with me % 22 32 24 14 8
The performance rating is conducted as per the F 4 19 9 15 3
given standard % 8 38 18 30 6
My immediate boss usually keeps a file on F 3 18 16 11 2
what I have done during the appraisal period to % 6 36 32 22 4
evaluate my performance
I am satisfied with the number of times I am F 12 72 64 43 9
appraised during the course of the year % 6 36 32 21.5 4.5
The performance rating is conducted as per the 23 100 36 35 6

20
given schedule/ period 11.5 50 18 17.5 3
Source; Own Survey, 2022
Customary discourse with quick boss on the work execution of workers is one of the things
utilized to degree execution. In like manner, 54% appeared their difference, 22% were in
adjusting, and the remaining 24% concurred on the articulation. The result over portrays that
there's no standard dialog between lion's share of the workers and their prompt boss. In this
manner, nonappearance of frequently talk between quick bosses clearly influences the objective
of performance evaluation system.

The researcher needed to know in the event that the execution if rating is conducted entirely
takes after the given standard. The result on the individual explanation appears that 46% of
workers answered as need of relationship between execution rating and foreordained measures
and on the other point of view 36% of respondents have concurred on it and 18% couldn’t
choose either of the two sides. These come about infer that since noteworthy extent of the
workers accept that their execution rating isn't conducted as per the given standard. In this
manner, it is conceivable to gather that the rating handle is powerless for predispositions and
suitable accentuation hasn’t been given to execution rating measures by the organization.

Recording a record on the execution of employees amid examination period assess their
execution, 42% of respondents has declared that they never experienced such a hone of recording
records amid examination periods. Though, 25.5% of respondents endorses presence of record
keeping hone amid examination periods. Separated from this, 32.5% of respondents found to be
unbiased. Based on outlines over, since most of respondents concurred on the nonattendance of
execution record keeping amid assessment period, the organization ought to reinforce the
assessment discoveries on employee’s execution by keeping records.

With respect to forward address on the over table, 42% of respondents answered that the existing
rate of repeat of the execution survey isn't palatable to well oversee execution of the
representatives. On the other conclusion, 25.5% of respondents accepted that visit execution
examination is being attempted pointing to progress the execution of workers over the given
year. Past that, 32% of respondents chose not to choose either of the two sides. This is often a
clear sign that bigger extents of representatives are not fulfilled with the existing recurrence of
examination in a year.

21
On the address approximately, the execution rating is conducted as per the given plan, 62% of
employees reacted that those workers on the premise of foreordained plans. On the other hand,
20.5% of respondent’s concurred assessments made taking after those plans and 18% proffered
to remain impartial. Larger part of the workers appeared their resistance towards the explanation.
It is conceivable to conclude that Time does not perform execution assessment on the premise
foreordained plans.

On the question about the performance rating is conducted as per the given schedule, 62% of
employees responded that employees on the basis of predetermined schedules. On the other
hand, 20.5% of respondents agreed evaluations made following those schedules and 18%
proffered to stay neutral. Majority of the employees showed their opposition towards the
statement. It is possible to conclude that ERA does not perform performance evaluation on the
basis predetermined schedules.

4.1.2.5. Compare Actual Performance against Standard

Table 4.7 1 Descriptive data on Measuring Performance

Statements
Disagree
Disagree
Strongly

Strongly
Neutral

Agree
Agree
Des.

My immediate boss compares my actual F 3 18 15 11 3

performance with the standard in a fairly % 6 36 30 22 6
manner
The comparison between actual performance F 3 15 16 14 2
and standards clearly justifies the deviation % 6 30 32 28 4
My actual performance is actually compared F 15 16 3 14 2
with the predetermined performance standard % 30 32 6 28 4
Source: Own Survey, 2022

Concerning the decency of comparison of the genuine performance with the standard, 42% of
respondents have oppose this idea as they accept the comparison needs farness. Generally, 28%
of respondents have upheld that their performance is measured by comparing real with the given
standard in a decently way whereas 30% of respondents are detached. Subsequently, this study
result demonstrates reasonableness is one of those things what the current execution rating
framework is fizzled to include.

22
Employees’ state of mind moreover inquired on whether the comparison between genuine
performance and benchmarks clearly legitimizes the deviation. In like manner, 36% of
respondents don’t accept that it clearly legitimizes the deviation between the real exhibitions and
standard. On the opposite, 32% accepted that the assessment is upheld by clear defense. The rest
32% of the respondents answered as unbiased.

The other address was around on the off chance that real performance is really compared with
the foreordained performance standard. 62% of the respondents answered that correct
comparison of genuine execution with standard performance has never been made. On the other
hand, 32% of respondents uncovered that they are assessed as per the pre-established execution
guidelines. The remaining 6% of respondents not one or the other oppose this idea nor concur.
Considering these come about, one can find that genuine performance of most of the
representatives is mistakenly compared to the genuine performance.

4.1.2.6. Feedback
Table 4.8 1 Descriptive data on Feedback

Statements
Disagree
Disagree
Strongly

Strongly
Neutral

Agree
Agree
Des.

My immediate boss gives me feedback on the F 15 15 10 16 4

moment I need coaching, appreciation, and % 30 30 20 12 8
counseling
I have been receiving continuous feedback F 10 14 17 5 4
from my rater % 20 28 34 10 8
After the appraisal result my rater gives me a F 11 20 10 6 3
constructive feedback % 22 40 20 12 6
Source; Own Survey, 2022

Workers inquired in case their rater gives them criticism on the minute they require coaching,
appreciation, and counseling and appropriately, 60% of them didn’t concur that there's coaching,
acknowledgment and counseling while 20% answered that they gotten vital coaching and
counseling whereas they experience performance crevices. The remaining 20.0% of the
respondents favored to choose none those assertion scales.

23
The researcher needed to know the nearness of nonstop input from their individual bosses and
48% of respondents have concurred on the nonattendance of ceaseless input from their quick
boss individually. On the opposite, 18% of respondents have concurred that the desired level of
ceaseless input from immediate boss is there within the organization. At last, 34% of respondents
are in between meaning they are not one or the other neither concur nor oppose this idea on the
issue.

Moreover, workers were inquired in case their prompt boss gives them a useful input after
completion of performance rating and 62% of respondents appeared their contradiction on the
cause and 18% were concurred whereas the remaining 20% are unbiased. From this, it is
conceivable to say that raters didn’t donate useful input and the framework is found to have
organizational shortcomings to forward useful feedbacks in a compassionate way.

4.1.2.7. Action
Table 4.9 1 Descriptive data on Action

Statements

Disagree
Disagree
Strongly

Strongly
Neutral

Agree
Agree
Des.

The performance rating result is used as a F 12 13 18 4 2

determinant factor for compensation and % 24 26 36 8 4
benefit
Promotion is purely based on Performance F 17 13 10 8 3
Appraisal result % 34 26 20 16 6
Information gathered through performance F 4 11 16 15 4
evaluation is used to motivate subordinates % 9 22 32 30 8
through recognition and support
After knowing the appraisal result the rater F 15 14 14 5 2
take the necessary action based on the given % 30 28 28 10 4
result
The performance appraisal rating is used as an F 15 13 11 6 5
input for coaching and development % 30 26 22 12 10
Source: Own Survey, 2022

24
On the address almost, employees’ performance rating result is utilized as a determinant
calculate for stipend and advantage related choices 50% of the respondents have answered
contemplations of employees’ execution never been made on making choices on such things.
Relative to that, few or 12% of the workers have accepted that stipend and advantage are
decided on the premise of execution comes about. 36% of the respondents proffered to say
nothing. This result lead to translation that Period isn't utilizing performance appraisals as a
base to decide employees’ emolument and benefits.

Researcher inquired in the event that advancement is made as a result of execution and 60% of
the representatives reacted that execution evaluation comes about never been the cause for
advancements whereas on the other corner as it were 21% of the respondents answered that
execution rating result is utilized as a figure to decide advancement of representatives. And, the
rest 19% of the respondents found within the center of the two sides. So, one can watch that
larger part of the representatives accept that Time does not consider execution examination
comes about as a major criterion to decide representative advancement inside the organization.

With respect to the address around data accumulated through performance assessment is
utilized to persuade subordinates through acknowledgment and back, 51% of the respondents
have reflected that the organization doesn’t recognize or propel great exhibitions. On the other
hand, 17% of the organization respondent gives as there's appropriate accentuation for great
performers. The remaining 32% didn’t take either of the two sides. Hence, we will reach an
agreement that the current performance examination framework is built without giving a
legitimate consideration for great execution acknowledgment as a component for a successful
execution evaluation framework.

Workers were inquired for after knowing the evaluation result the raters take the essential
activity appropriately and 58% of the respondent replied that the rater didn’t take any activity
after the examination whereas 13% of respondents answered that activity was based on the
evaluation result. The rest 29% of respondents affirm that they are not one or the other
concurred nor oppose this idea almost the presence of such issue. From the result, it is
conceivable gather that the current execution evaluation framework isn't appropriately defined
and arranged in a way which encourages to require the fundamental activity based on the
execution result of workers.

25
The other address was raised to know on the off chance that the performanec evaluation rating
is utilized as an input for advancement, and 58% of workers said that there's no self-evident
relationship between performance examination and advancement. Moderately, other 20.5% of
respondents answered that they have got the vital improvement agreeing to their performance
rating and 21.5% were impartial. It is conceivable to conclude that the current performance
appraisal system detailing isn't compelling to follow and utilize performance of workers to
create encourage improvement of redresses at whatever point fundamental

4.1.3. Employees’ Perception towards the Current Performance Appraisal System

Table 4.10 Descriptive data on Employees Perception towards Current PAS

Statements

Disagree
Disagree
Strongly

Strongly
Neutral

Agree
Agree
The current performance appraisal system is Des.
F 2 21 13 10 4
directly related to the objectives of the job and % 4 42 26 20 8
of the organization
The performance appraisal is easy to use and F 5 22 12 10 1
understood by both immediate boss and % 10 44 24 20 2
employees
The performance appraisal system was F 5 17 12 14 1
developed with inputs from the employee % 10 34 24 28 2
Source: Own Survey, 2022

Employees put forward their instructed on whether the current performance evaluation
framework is specifically related to the targets of the work and of the organization or not, and
46% of the respondents answered that the current performance evaluation framework is defined
without thought of both work and organizational destinations. On the opposite, 28%
representatives said that the current execution evaluation framework is developed in thought of
both work and organizational targets. 26% of respondents are not one or the other of the two
sides. The result over appears that larger part of employees gets it the performance examination
framework because it is failed to adjust with both work and organizational goals.

With respect to the address for employees to put forward their instructed-on effectiveness of the
performance evaluation framework to utilize and whether it is well caught on by the raters and

26
subordinates, 54% of the respondents reflected that the current PAS is way complex to be caught
on by all partners within the organization. Though, 22% of representatives concurred on
effortlessness of the current performance examination framework because it is effortlessly
reasonable by the raters and workers. Other 24 % of the respondents were at the center. This
permits the analyst to comprehend that as it were few workers are concurred on the effectiveness
and understandability of current PAS framework. Noteworthy number of members feels the
current PAS is way complex and troublesome to get it because it takes after its disgraceful
detailing.

The researcher also wanted to know employee’s say if they allowed to be engaged on current
PAS development. 46% of respondents depicted that the system was developed without their
engagement at all. In contrast, 29% of the respondents have agreed that the current performance
appraisal system was developed taking inputs from its employees. The remaining 25% of
respondents are in between; or neutral. As a result, it is possible to say that there was minimal
engagement of employees in development of current performance appraisal system.

27
 CHAPTER FIVE

5. CONCLUSIONS AND RECOMMENDATIONS

5.1. Conclusion
 Organizational and appraisal system’s objectives are not congruent or not aligned to
each other. This is well against what the company mentioned the importance of
alignment for effective PAS on the paper. Practical implementation of the organization
seem to be highly doubtful
 The PAS of the organization found to have multi dimensional problems and this si
directly related to its formulation. The major causes could be failing to participate
employees in its formulation and later in it execution.
 Relationship between raters/ immediate bosses and employees seem to be broken as
employees do not receive coaching, counseling and intervention to support who
performed poorly or to recognize good performers. Whereas, the researcher spot a
presence of awareness on an interview with HR director but the problem here is indeed
is the relationship.
 A discussion on organizational and individual objectives is not materialized.
Consequently, these objectives are not clear. This still is a problem related to alignment.
This fact is a clear indication that effectiveness of the current performance appraisal
system of the organization is being affected by the absence of clarity and alignment
between organizational and employee objectives and presence proper discussion among
stakeholders.
 Regarding communication, the respondents argued that the capability of communication
in the organization to meet its purpose of creating awareness to employees on
organizational objectives is unexpectedly weak or possible to say never exists. Even if
some communications made, they lack transparency. In this regard, the organization’s
current performance appraisal system lacks effective and formal communication in its
effort to be effective.
 The other finding of the study entails that performance standards of individual’s job in
the organization is not measured, regularly reviewed, and discussed. Here again, the
organization is equipped with well-designed PAS to ensure the effectiveness of

28
 performance appraisal system.
 The researcher found out that ERA performs performance appraisal evaluation twice a
year or semi-annually from HR director’s thought. But, according to the respondents the
frequency of such appraisal is not appropriate to ensure effective performance of
employees. From this one can conclude that the organization’s frequency of appraisal is
not effective this in turn affects the effectiveness of current PAS in the organization.
 On the basis of respondent’s attitude rating is not being conducted in accordance with
required performance standard in a fairly manner. Thus, PAS in ERA lacks farness.
Fairness is possible one of defining elements of PAS and from what has been said above
the system is believed to be biased.
Generally, effectiveness of the current performance appraisal is highly compromised
because of various problems discussed above. Therefore, it is possible to say that the current
performance appraisal system in Ethiopian Road Construction at the Head office level is
ineffective.

5.2. Recommendations
On the basis of analysis and interpretation of gathered data the researcher came up with the
following recommendations;

 It is obvious that the purpose of a performance appraisal system is to improve the

efforts of employees in achieving organizational goals and objectives. In this regard
ERA has to put 3ecmaximum efforts especially in creating smooth alignment between
its goals and objectives and its performance appraisal system. In doing so, the
organization has to examine employees relative its organizational objectives.
Furthermore, clarity and understandability should be considered in designing the
system.

 Employees are the centre of the idea in talking about performance appraisal system. In
that manner, the organization should give greater deal of consideration in allowing
employees to take part formulation and execution of the system as it facilitates
acceptance, reliability, and cooperation among employees.

29
 It is expected of ERA to make sure there high degree of alignment between its
performance appraisal system and employee development objectives of the
organization as the main purpose of PAS is to enhance employee development.

 PAS is mainly used to distinguish between good and bad performance. In this regard,
recognition of good performers and coaching and counseling of bad/poor performers
has to be made.

 Deployment of PAS by itself won’t guarantee effectiveness. Clear periodic discussions

on overall organizational objectives have to be made between employees and their
supervisors. The organization needs to design a system which favors such an
alignment.

 There is no doubt on the importance of communication. The organization should put in

place well crafted communication mechanism to aware employees the purpose of PAS,
their expected performances, and to have frequent discussions on their performance
with their handler.

 Regarding evaluation, the performance standards of each employee’s job has to be

defined in a clear and realistic manner. Following that, these standards have to be
periodically reviewed, renewed and discussed fairly.

 Appraisal frequency is essential as it allows the organization to have up to date record

of its employee’s performance. Hence, ERA need to make further adjustments by
considering continuous flow of feedbacks and more frequent performance review
annually.

 ERA has to make sure an environment which enables employees and their supervisors
to transparently discuss on performance issues is in place. Confidentiality is also a
major issue that the organization needs to work on.

 It is expected of the organization to make improvements on the problems identified in

the study.

 The researcher recommends further studies to be conducted on the impact of

performance appraisal system effectiveness on overall effectiveness of the
organization.

30
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 APPENDICES
ADMAS UNIVERSITY
SCHOOL OF POST GRADUATE STUDIES
MASTERS OF BUSINESS ADMINISTRATION PROGRAM
Survey Questionnaire
Title: MBA Research on the Effectiveness of Employee Performance Appraisal
Questionnaire to be completed by Ethiopian Roads Authority employees

Dear Respondents:

The purpose of this questionnaire is to collect data to assess Ethiopian Road Authority’s
effectiveness of employee performance appraisal. The research contributes towards the
fulfillment of the Master’s Degree in business Administration (MBA).

The validity of your response has great contribution for the success of my thesis. Thus, I would
like to ask with due respect to give me the right response. All responses that you provide are
strictly confidential and will be used only for academic purpose.

Instruction

 In filling the questionnaire you are not expected to write your name,
 put √ or × marks in the box provided
 write your brief answers in the space provided

Thanks for your cooperation.

Yours Faithfully,

Kidanework Zewude

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 I. Part One: Demographic Variables of Respondents
A. Gender: Male Female
B. Age Group: 20 –27 28-35
36 –45 46-55
56 and above
C. Educational Status: Grade 10 or12 Diploma
Degree Masters

Other please specify ________________________

D. Your service year: 0–5 6 – 10

11-15 16- 20 21 and above
E. Which division are you in?
 Human Resource Admin.
 Financial Management Directorate
 Technical Stuff
 Others

II. Part Two: Opinion survey on performance appraisal

Instruction
Please indicate your level of agreement based on the following rating scale:
Where: 1 = Strongly Disagree 2 = Disagree 3 = Neutral 4 = Agree 5 = Strongly Agree

1. Formulation of Current Performance Appraisal System

Rating Scale
No. 1. Formulation of Current Performance Appraisal System 1 2 3 4 5
Items
1 The current performance appraisal system is directly related to the

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 objectives of the job and the goals of the organization
2 The performance appraisal is easy to use and understood by both
supervisors and subordinates
3 The performance appraisal system was developed with inputs
from the staff.
4 When I under-perform in my job because of personal or
interpersonal problems, coaching, counseling and support is
provided to me.
5 Good performance is recognized by awards
6 I have ways to appeal a performance rating that I think is biased or
inaccurate.

2. Level of Effectiveness of Current Performance Appraisal System

No. Rating Scale
Setting Performance Objectives 1 2 3 4 5
Items
1 Performance objectives are clearly defined in the appraisal process
2 My performance objective is directly related to the objectives of the
organization
3 Discussion is made between the team leader/boss and me on the
objectives
4 I’m encouraged to participate during objective setting

Rating Scale
No. Performance Standard
1 2 3 4 5
Items
1 The performance standards of my job are realistic.
2 Clear performance criteria (standards) are set before proceeding the
performance appraisal process
3 The organization gives me a clear standard related with my job.
4 The performance standards make me stretch and use my full
potential.

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 Rating Scale
No. Communication 1 2 3 4 5
Items
1 I am clearly communicated about the purpose of performance
appraisal
2 Formal communication processes are in place to ensure that I
understand the organization’s objective.
3 There is a transparent discussion across the organization on
performance appraisal issues.

Rating Scale
No. Measuring Performance 1 2 3 4 5
Items
1 My immediate boss discuss regularly my job performance with me
2 The performance rating is conducted as per the given standard.
3 My immediate boss usually keeps a file on what I have done during
the appraisal period to evaluate my performance
4 I am satisfied with the number of times I am appraised during the
course of the year
5 The performance rating is conducted as per the given schedule/
period

Rating Scale
No. Compare Actual Performance against Standard
1 2 3 4 5

Items

1 My team leader/boss compares my actual performance with the

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 standard in a fairly manner

2 The comparison between actual performance and standards clearly

justifies the deviation.

3 My actual performance is actually compared with the predetermined

performance standard

No. Feedback Rating Scale

1 2 3 4 5

Items

1 My team leader/immediate boss give me feedback on the moment I

need coaching, appreciation and counseling.

2 I have been receiving continuous feedback from my team leader/boss

3 After the appraisal result my team leader/boss gives me a

constructive feedback

No. Action Rating Scale

1 2 3 4 5

Items

1 The performance rating result is used as a determinant factor for

compensation and benefit

2 Promotion is purely based on Performance Appraisal result

3 Information gathered through performance evaluation in is used to

motivate subordinates through recognition and support

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4 After knowing the appraisal result the rater take the necessary action
based on the given result

5 The performance appraisal rating is used as an input for coaching

and development

3. Employee’s perception towards current appraisal system

No. Rating Scale

Employee’s perception towards current appraisal system
1 2 3 4 5

1 The current performance appraisal system is directly related to the

objectives of the job and of the organization

2 The performance appraisal is easy to use and understood by both

team leader or immediate boss and employees

3 The performance appraisal system was developed with inputs from

the employee

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