Performance Appraisal in Commercial Banks A Case Study on Dashen Bank S.C.
Creators: name: Yazachew, Meseret
Publisher: name: National Academic Digital Repository of Ethiopia
Year: 2007

description: Performance appraisal, though an important function of human resource/personnel management, has not received the degree of concern it deserves. This function, if properly exercised by organizations, can serve a number of purposes, mainly administrative and developmental in nature. However, despite these intended goals, performance appraisal seems not to be effective in most cases mainly due to the subjective nature of criteria (standard) of performance, lack of rater understanding of or inadequate training on performance appraisal, which consequently led to the less importance and emphasis attached to it. For an appraisal system to meet its desired goals, questions such as: 'What purposes should it serve?' 'Who should be in charge of evaluating performance?' 'What aspect of performance shall be appraised?' 'What method(s) should be adopted?' 'How often should appraisal conducted?' 'What does employee participation in and their perception towards the system look like?' 'What potential problems are encountered in the process and how can they be overcome?' and 'What is the importance of giving feedback and handling post assessment performance discussions with employees?' need to be addressed properly. This study has tried to address each of the above and other related issues by taking Dashen Bank S.C. as a case study organization. Accordingly, samples from the Bank's staff members (both supervisors or managers and non-supervisors) were selected and administered questionnaires and some interviewed with the objective of assessing the effectiveness of the appraisal system. The results are presented in this paper. While the practice by Dashen Bank S.C. has been that immediate supervisors are the people in charge of appraising employees, response from the sample respondents has indicated that others such as peers, subordinates, customers, or any combination of these should be allowed to participate if the process is expected to be more effective. It is identified that the appraisal format addresses different aspects of employee performance with traits being the dominant ones. It is also found out that the Bank adopts the rating scales method of appraisal. Although the existing practice of appraising employees twice a year has got the highest support among the sample respondents, some have suggested a more frequent time period for increased effectiveness. Employee participation in the appraisal process is set at a low level. Most of the non-supervisory respondents perceived performance appraisal as a punishment tool contributing little to motivation while their supervisory counterparts perceived it as an administrative and developmental tool. Owing to subjectivity (non-jobrelatedness) of most of the performance criteria in use, problems related to measurement, rater bias, and lack of appropriate rater training are seen to characterize the Bank's appraisal system. Problems are always prevalent and what one should be concerned about is on how to overcome them. Irrespective of how they are handled, the appraisal system of the Bank is found to encourage giving performance feedback and handling post assessment interviews with employees.