Natinael Abebe Final Draft

ASSESSMENT OF EMPLOYEE'S PERFORMANCE APPRAISAL PRACTICE: THE
CASE OF ETHIO TELECOM SEMIEN Addis Ababa ZONE
A RESEARCH REPORT SUBMITTED TO DEPARTMENT OF MANAGEMENT FOR

THE PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR BA DEGREE IN
MANAGEMENT
PREPARED BY: NATINAEL ABEBE
ID NO: BER/9923/10
ADVISOR: ISMAEL KEDIR
ADDIS ABABA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
NOVEMBER, 2020 G.C
ADDIS ABABA, ETHIOPIA

ACKNOWLEDGEMENTS
I thank God Almighty for protecting me and my family from the coronavirus epidemic. I could
not accomplish such success if God were not beside me.
I extend my sincere appreciation to my advisor Mr. Ismael Kedir for his professional guidance
and for showing me the way.
I express my gratitude to the employees of Ethio telecom for the cooperation they showed me
during the process of data collection. I would also like to express my deepest gratitude to my
family and friends for their financial, emotional, and intellectual support in completing the study.
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Abbreviation/Acronyms
 GE- General electric
 HR-Human resource
 HRM-Human resource management
 MBO -Management by objectives
 PA-Performance appraisal
 PAM- performance appraisal method
 PAR-Performance appraisal result
 PAS- Performance appraisal system
 PE- Performance evaluation
 PM-Performance management
Table of Contents
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ACKNOWLEDGEMENTS.................................................................................................................................ii
Abbreviation/Acronyms...............................................................................................................................iii
List of tables.................................................................................................................................................vi
Abstract....................................................................................................................................................viii
CHAPTER ONE: INTRODUCTION...................................................................................................................1
1. 1 Background of the study........................................................................................................................1
1.2 Statement of the problem......................................................................................................................2
1.3 Objectives of the study...........................................................................................................................2
General objective:....................................................................................................................................2
Specific objective......................................................................................................................................2
1.4 Research Question.................................................................................................................................3
1.5 Significance of the study.........................................................................................................................3
1.6 Delimitations (Scope) of the study.........................................................................................................4
1.7 Limitation of the Study...........................................................................................................................4
1.8 Research methodology...........................................................................................................................4
1.8.1 Research design...............................................................................................................................5
1.8.2 Target population............................................................................................................................5
1.8.3 Sample, sample size and Sampling Technique.................................................................................5
1.8.4Sources of Data and Collection Methods.........................................................................................6
1.8.5 Validity and reliability of the instrument.........................................................................................7
1.8.6 Data gathering procedures..............................................................................................................8
1.8.7 Data analysis....................................................................................................................................8
1.8.8 Ethical issue.....................................................................................................................................8
CHAPTER TWO: REVIEW OF RELATED LITERATURE......................................................................................9
2.1 Meaning and Definition of Performance appraisal.................................................................................9
2.2 Where did performance appraisals come from?..................................................................................10
2.3 Purpose of Performance Appraisal.......................................................................................................11
2.4 The performance appraisal process.....................................................................................................12
2.5 Responsibility for Appraisal..................................................................................................................15
2.6 Performance appraisal errors...............................................................................................................17
2.7 Performance management...................................................................................................................19
2.7.1 Aims of performance management...............................................................................................20
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2.7.2 Characteristics of performance management...............................................................................20
2.7.3 The process of performance management....................................................................................21
2.8 Performance appraisal and performance management.......................................................................22
CHAPTER THREE: DATA PRESENTATION, ANALYSIS & INTERPRETATION....................................................23
3.1 Introduction..........................................................................................................................................23
3.2. Demographic Characteristics...............................................................................................................23
3.3 Respondents Opinion towards Performance Appraisal practice..........................................................26
3.3.1 Objectives of PA in Ethio telecom..................................................................................................26
3.3.2 Criteria for Performance Appraisal................................................................................................29
3.3.3 Potential Problems of PA in the Organizations under Study..........................................................32
3.3.4. Performance Appraisal Practice and Process in Ethio telecom.....................................................35
CHAPTER FOUR - SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS............................37
4.1 Summary of Findings............................................................................................................................37
4.2 Conclusions..........................................................................................................................................37
Based on the summary of the findings the following conclusions are driven:............................................37
4.3 Recommendations................................................................................................................................38
References..................................................................................................................................................40
APPENDIX ONE: QUESTIONNAIRE.................................................................................................................i
Appendix two: permission letter..................................................................................................................v
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List of tables
Table 3.1Gender profile of respondents……………………………..…………………………. 23
Table 3.2 Marital status and age of respondents…………………….……………………………24
Table 3.3 Academic background and years of experience of the respondents…………………...25
Table 3.4 is Performance evaluation used to give feedback to employees....................................26
Table 3.5 is Performance evaluation strongly determines pay and promotion decisions...............26
Table 3.6 Is Performance evaluation used to motivate employees……………………………….27
Table 3.7 is performance evaluation used to counsel and coach employees……………………..27
Table 3.8 is a performance evaluation designed to strengthen the relationship between supervisors
and subordinates………………………………………………………………………………….28
Table 3.9 the performance appraisal practice of Ethio telecom………………………………….28
Table 3.10 Performance appraisal in the organization…………………………………………...29
Table 3.11 purpose of performance appraisal practice…………………………………………...30
Table 3.12 criteria of performance appraisal practice……………………………………………30
Table 3.13 objectivity of criteria/instrument used to measure employees performance…………30
Table 3.14 the opportunity to participate in the design of the performance evaluation………….31
Table 3.15 is PE is customized based on the characteristics of your job………………………...31
Table 3.16 is the employee’s performance evaluated twice a year………………………………32
Table 3.17 is your performance evaluated by the right/qualified person ………………………..33
Table 3.18 I have ways to appeal to a biased performance rating……………………………….33
Table 3.19 I can challenge a performance rating if I think it is biased…………………………..34
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Table 3.20 the evaluator is influenced by personal liking and disliking…………………………34
Table 3.21 to avoid resentment my supervisor gives equivalent ratings…………………………34
Table 3.22 Evaluation of my performance is based on my accomplishment and achievement….35
Table 3.23 I used to work hard only making sure that my supervisor watched what I am doing..35
Abstract
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This study was conducted in Ethio telecom Semien Addis Ababa zone to assess the practice of
employees' performance appraisal. This research has checked its objectives through these
questions how frequently Ethio telecom use performance appraisal practice? And what are the
objectives of the Ethio telecom performance appraisal system? The research was conducted from
December 2019 to December 2020 GC. The researcher used a descriptive research method. The
sampling technique was stratified (probability) sampling and the data collection tools were
interview and questionnaire. The collected data were analyzed and interpreted using statistical
techniques such as tabulation and percentage and then recommendation and conclusion analysis
was made. As a conclusion, the performance raters of Ethio telecom affect their subordinate’s
results both negatively and positively based on their liking and disliking. Therefore, the
researcher recommended that Ethio telecom should manage it by developing a policy that can
guide and control the existence of such a practice.
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CHAPTER ONE: INTRODUCTION
1. 1 Background of the study
Human resource management (HRM) is concerned with all aspects of how people are employed
and managed in organizations. It covers the activities of strategic HRM, human capital
management, knowledge management, corporate social responsibility, services (Michael
Armstrong, 2014).
Performance management is one of the cornerstones of Human Resource practice in
organizations. No matter where you work, how big or small your organization or how simple or
complex the business model, effective performance management is a key requirement if you have
any number of employees (Allan H. Church and Janine Waclawski, 2009). According to the
definition, the basic thing for human resource management, which helps the organization to
achieve its objective, is performance management.
Performance management is an ongoing process that identifies measures, manages, and develops
the performance of people in the organization. It is designed to improve worker performance over
time. Performance appraisal is the part of the performance management process that identifies,
measures, and evaluates the employee's performance, and then discusses that performance with
the employee (Aguinis, 2009).
The history of performance appraisal is quite brief. Its roots in the early twentieth century can be
traced to Taylor's pioneering Time and motion studies. But this is not very helpful, for the same
may be said about almost everything in the field of modern human resource management. And
distinct and formal management procedures used in the evaluation of work performance appraisal
dates from the time of the Second World War. Yet in a broader sense, the practice of performance
appraisal is a very ancient art.
According to Armstrong (2009) performance appraisal defined as it is formal, structured system
of measuring, evaluating job related behaviors and outcomes to discover reasons of performance
and how to perform effectively in future so that employee, organization and society at a large will
benefited.
In Ethio telecom this process takes place by developing a system that helps to evaluate the
employee's performance that system is balance scorecard (BSC). The major supporting
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department is the Performance Improvement and Human Resource Directorate; it has the duties
and responsibilities of evaluating employee's performance semiannually.
1.2 Statement of the problem
Organizational performance is the synergetic total of the performance of all employees in the
organization. This being the fact, employee performance has to be closely planned, coached, and
appraised to ensure that it is in line with the interest of organizations (Allan H. Church and Janine
Waclawski, 2009)
Performance appraisal is one of the main important concepts of the rational and systematic
process of human resource management. There will be a professional assumption that if
performance appraisal is conducted appropriately and its results communicated to employees
effectively then it will improve the performance of employees and hence the performance of the
organization.
Failure to design and implement an appropriate appraisal system will have a host of unfavorable
consequences on the productivity and job satisfaction of the employee. However, in some
organizations, performance appraisal is not given the proper attention and exercised periodically
more like a usual practice than as a tool of motivation. The researcher was inspired to fill the gap
by answering the research questions.
1.3 Objectives of the study
General objective:
The overall objective of this study is to assess the performance appraisal practice of Ethio
telecom Semien Addis Ababa zone.
Specific objective
 To assess how frequently Ethio telecom use performance appraisal practice?

 To assess the objectives, that Ethio telecom uses to evaluate an employees' performance.
 To uncover Ethio telecom's potential problems related to performance appraisal and state
ways of overcoming those problems.
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 To assess the criteria/instrument used to conduct the performance appraisal capability of
measuring the employees' real performance in Ethio telecom.
 To see whether Ethio telecom performance appraisers provide timely feedback and
conduct a post-assessment discussion with employees.
 To propose action demanding recommendation for any observed problem.
1.4 Research Question
This research has tried to give answers to the following research questions.
 How frequently Ethio telecom use performance appraisal practice?
 What are the objectives of employees' performance appraisal in Ethio telecom?
 What are the major problems in the practices of performance appraisal of employees?
 What are the criteria/instruments used to conduct performance appraisal?
 How to communicate assessment results?
1.5 Significance of the study
Every research should have something to contribute since a lot of money, time and human energy
is exerted. Significance of the study listed what is the importance and who will be the beneficiary
of this study.
According to this study, the following bodies are beneficiaries
Policymakers
The findings can inform policymakers regarding the potential benefits and challenges associated
with MNO-driven mobile money services like Tele Birr. This can help them develop regulations
and policies that foster financial inclusion while ensuring financial stability.
CBE
Banks like the CBE can gain valuable insights into how Tele Birr affects their customer base and
overall performance. This knowledge can help them adapt their strategies and offerings to remain
competitive in the evolving digital financial ecosystem.
Ethio telecom
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The research can be a valuable tool for Ethio Telecom and Tele Birr by providing data-driven
insights into user behavior, market dynamics, and the overall impact of Tele Birr on the Ethiopian
financial system. This knowledge can be used to refine their strategies, improve services, and
solidify their position as a leading player in Ethiopia's digital financial landscape.
Students: other students who have an interest may use this study as a basis for detailed and
further study.
1.6 Delimitations (Scope) of the study
The scope of this paper did not include other departments of the organization other than the
human resource department.
Geographic scope: The study focused on employees who are working at Semien Addis Ababa
zone of Ethio telecom.
Time Scope: This study was conducted from the beginning of December 2019 to December
ember 2020
Content scope: this study focused on the objectives, processes, and factors that affect the
performance appraisal practice of Ethio telecom.
1.7 Limitation of the Study
Every research in one way or another way will face some limitations, so the researcher faced the
following limitation during the study.
 Shortage of money for transportation, printing, and other expenses
 Lack of experience
 And Coronavirus pandemic
1.8 Research methodology
To achieve the objective of this paper, using an appropriate methodology is necessary. This
chapter includes research design, target population, sample, sample size and sampling technique,
source of data and collection methods, the procedure of data collection, method of data analysis,
reliability and validity, and ethical issues.
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1.8.1 Research design
According to Geoffrey et al, 2005 descriptive research is a research type that describes
phenomena as they exist and it is used to identify and obtain information on the characteristics of
a particular problem or issue. Based on the above definition descriptive type of research design is
best to achieve the aim of this research since the study focused on the assessment of performance
appraisal practice of Ethio telecom.
1.8.2 Target population
The target population of this research is permanent employees of Ethio telecom Semien Addis
Ababa zone who works in various positions, and who have more than six months of experience.
The rationale of selecting these employees as a target population is because they have at least a
one-time experience of performance appraisal in the Ethio telecom Semien Addis Ababa zone.
1.8.3 Sample, sample size and Sampling Technique
Researchers usually conclude large groups by taking a sample. A Sample is a segment of the
population selected to represent the population as a whole. Ideally, the sample should be
representative and allow the researcher to make accurate estimates of the thoughts and behavior
of the larger population. Designing sample calls for three decisions:
 Who will be surveyed? (The Sample)
 How many people will be surveyed? (Sample Size)
 Large samples give more reliable results than small samples. However, it is not necessary
to sample the entire target population. How should the sample be chosen? (Sampling
technique)
This research was conducted on the employees of Ethio telecom Semien Addis Ababa zone and it
used both probability and non-probability sampling techniques. The probability sampling
technique was used when the data is from Ethio telecom employees' while; non-probability
sampling technique was used when the gathered data was from HR department manager.
This research used a stratified sampling technique. The research population is 302 and the target
population of the study is 188 employees selected in Ethio telecom Semien Addis Ababa zone,
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which are classified into five strata: 35 feelti facilities, 26 finance, 54 network, 13 supply chain,
and 60 sales.
To get the sample size, the researcher used the following formula;
N
n= 2 Where n is a sample size
1+ N ( e )
N is a total population
E is Alpha
188
n=
1+188 ( 0.1 ) = 65
2
Strata N(total population) n(sample size)

Sales 60 21
Supply and chain 13 4
Network 54 19
Finance 26 9
Feelti Facilities 35 12
Total 188 65
1.8.4Sources of Data and Collection Methods
Sources of data
This research used both primary and secondary sources of data.
Primary source: The primary data was obtained from feedbacks of the employees which were
collected through a pre-organized self-administered questionnaire and the manager's view which
was collected using a structured interview. The primary data provide the appropriate answers
about the assessment of the performance appraisal system in Ethio telecom Semien Addis Ababa.
The data was collected before the spread of the coronavirus epidemic all over the country.
Secondary source: Different books, articles, and journals were referred to get relevant
information and strengthen the theoretical framework of the performance appraisal system.
Methods of data collection
This research used two types of data gathering tools that are questionnaire and personal
interview.
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Questionnaire: To get data from primary sources both open and close-ended questions were
prepared in the form of questionnaires to employees. The close-ended questions make uniformity
of the response and it was easy to process. Unfortunately, it was not possible to get answers to
open-ended questions due to employee's busyness.
Personal-Interview: the researcher also used a structured interview and it was responded to by
the HR department manager. The structured interview is chosen because it is more suitable for
descriptive research.
1.8.5 Validity and reliability of the instrument
As the prepared questions for the questionnaire are standard questions its reliability was tested
from its source. As stated by hair et al., (2007) reliability indicates the extent to which a variable
or set of variables is consistent in what it is intended to measure" (cited by Siddiqi; 2011:20).
Reliability analysis is used to measure the consistency of a questionnaire.
To ensure the reliability of the response (internal consistency of items measuring the level of
homogeneity of measures in the instrument and reliability over and over groups of respondents),
the source applies a reliability test to 24 selected target group respondents by calculating
Cronbach's alpha with all variable, as a result, the Cronbach's alpha of questionnaire revealed
0.816. As described by Andy (2006) the values of Cronbach's alpha more than 0.7 is good. Hence
the reliability of the response was able to be ensured.
Cronbach’s Alpha Number of items
0.816 24
Reliability test Source: from Solomon Mekonnen, Addis Ababa University, assessment of
employee's performance appraisal practice: the case of ABAY bank S.C
1.8.6 Data gathering procedures
Before the researcher went to gather data he received a permission letter from Addis Ababa
University’s management department. Then he showed the permission paper to Ethio telecom
human resource department and he got permission to gather all the necessary data. After he got
permission, the questionnaires were distributed to all 65 employees. The study gathered data from
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both primary and secondary data sources. The data was collected using a structured self-
administrated questionnaire for 65 employees of Ethio telecom which has been selected using
stratified sampling from five strata and using structured in depth-interviews with the human
resource department manager. The selection of respondents has been made using purposive
sampling for the human resource manager and stratified sampling for 65 employees.
1.8.7 Data analysis
The response for close-ended questions was systematically tabled and analyzed using frequencies
and percentages and followed by verbal interpretations. The response to interview questions was
presented in a running text form. Finally, the findings of the study are summarized, the
conclusion is drawn and recommendations are forwarded.
1.8.8 Ethical issue
It could not be ethical to access some confidential documents of the organization. Therefore, the
organization's code of ethics was taken into account without significantly compromising the
findings of the study. Also, it may not be ethical to ask employees to answer questionnaires while
they are at their work responsibility. Hence, enough time was given to respondents so that they
can either take the questionnaire to their home or use their break time.
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Meaning and Definition of Performance appraisal
Performance appraisal means the systematic evaluation of the performance of an employee by

his/her superiors. It is a tool for discovering, analyzing, and classifying the differences among
workers about job standards. It refers to the formal system of appraisal, in which the individual is
compared with others and ranked or rated. Generally, an appraisal is made by the supervisor or
manager once or twice in a year" according to Joshi (2010, P.64).
After defining performance appraisal one has to know what Performance management is,
therefore according to Armstrong (2009), "Performance management is a systematic process for
improving organizational performance by developing the performance of individuals and teams.
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It is a means of getting better results by understanding and managing performance within an
agreed framework of planned goals, standards, and competency requirements. Performance
management is concerned with aligning individual objectives to organizational objectives and
encouraging individuals to uphold corporate core values; enabling expectations to be defined and
agreed upon in terms of role responsibilities and accountabilities (expected to do), skills
(expected to have), and behaviors (expected to be); providing opportunities for individuals to
identify their own goals and develop their skills and competencies" (P. 123).
Armstrong (2009) "stated encouraging development of all employees including supervisors and
managers is necessary to performance appraisal organizations for future challenges. Career
planning identifies performance appraisal and activities for individual employees as they develop
within the organization" (P.124).
Gomez- Mejia et al, (2005) stated that "performance appraisal is the process of identification,
measurement, and management of human performance in an organization" (p.225).
Therefore, to make these effective organizations should develop a system that serves as a tool for
the performance appraisal process.
2.2 Where did performance appraisals come from?
There are early references to performance appraisal in America going back over a hundred years.
The Federal Civil Service Commission's merit rating system was in place in 1887. Lord and
Taylor introduced a performance appraisal in 1914. Many companies were influenced by
Frederick Taylor's ''scientific management'' efforts of the early twentieth century and concocted
performance appraisals. Before World War II, however, very few organizations conducted any
formal performance appraisals. A handful of companies and the military were the only ones using
the procedure regularly. Most appraisals that were done concentrated more on an individual's
personality and traits than on actual achievements against goals and formal analyses of the
behaviors that produced those results.
Then, in the 1950s Peter Drucker's novel idea of management by objectives (MBO) and Douglas
McGregor's book The Human Side of Enterprise, which introduced his notions of Theory X and
Theory Y, gained a lot of attention. A few companies moved from a mere trait assessment to the
development of a procedure that concentrated on goal setting and made the appraisal process a
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shared responsibility between the individual and the manager. From the work of Drucker and
McGregor, the performance appraisal procedure has grown to the point where a huge majority of
companies now have a formal appraisal system.
''Effective development of managers,'' McGregor wrote in a 1957 Harvard Business Review
article, 'does not include coercing them (no matter how benevolently) into acceptance of the goals
of the enterprise, nor does it mean manipulating their behavior to suit organizational needs.
Rather, it calls for creating a relationship within which a man can take responsibility for
developing his potentialities, plan for himself, and learn from putting his plans into action.''
Drucker's initial proposal of an MBO process to replace trait appraisals and McGregor's
integration of a ''Theory Y'' approach into the appraisal process produced a change in the way
organizations went about assessing the contributions of their members. General Electric was
singled out by McGregor as an example of a company that was using an MBO/Theory Y
approach to performance appraisal. GE conducted a truly scientific study in the early 1960s to
test the effectiveness of its annual, comprehensive appraisal approaches. It found that:
 Criticism hurts the achievement of goals
 Praise has a little effect one way or the other.
 Performance improves most when specific goals are established.
 Defensiveness resulting from critical appraisal produces inferior performance.
 Coaching should be a day-to-day, not a once-a-year activity.
 Mutual goal setting, not criticism, improves performance.
 Interviews designed primarily to improve a man's performance should not at the same
time weigh his salary or promotion in the balance.
 Participation by the employee in the goal-setting procedure helps produce favorable
results.
These findings remain today as valid as they were when GE first developed them. Performance
appraisal as a management tool spread quickly in the 1950s when about half of 400 employers
surveyed reported using appraisal systems. Today, depending on the survey, somewhere between
three-quarters and nine-tenths of all companies use a formal performance appraisal procedure.
(2002) Dick Grote
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2.3 Purpose of Performance Appraisal
Walsh and Fisher (2005) identified four purposes of performance appraisal and according to them
the performance appraisal:
1. Provide feedback about strengths and weaknesses;
2. Distinguish between individuals to allocate rewards;
3. Evaluate and maintain the human resource systems of the organization; and
4. Create a paper trail of documentation
Even if Walsh and Fisher identified some of the major performance appraisal purposes, their
finding is not the full list and it also lacks elaboration. Performance appraisal can serve the
following major purposes.
The appraisal can be used to improve current as well as future performance of employees,
provide timely feedback, increase motivation, identify training needs, identify potential
of employees, let individuals know what is expected from them, focus on career
development, award salary increases, and solve job problems. It can be used to set out the job
objectives, provide information for human resource planning and career success, assess the
effectiveness of the selection process and as a reward or punishment” Walsh and Fisher
(2005).
We can also see the purpose of performance appraisal from two perspectives:
1. Necessary information for facilitating managerial decisions related to personnel

functions.
2. From a developmental perspective, the appraisal has to do with ways that enhance
Employee ability and motivation.
In the first perspective, the result of performance appraisal of employees can help the
organization to decide well-informed decisions in the other areas of Human resource like
human resource planning, recruitment and selection, training and development and
compensation. The result obtained from a formal performance appraisal in any
organizational setting can be a base to evaluate and improve the effectiveness of the various
human resource practices in the organization. More specifically performance appraisal can
serve the general purpose of improving the current as well as the future performance of
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employees through a systematic rating of their performance on the job as well as enhancing
their job satisfaction and organizational commitment according to the second perspective.
These various benefits of performance appraisal justify the attention that must be given to the
proper planning and implementation of a workable performance appraisal system in all
organizational settings. It is quite clear that those organizations with proper performance
appraisal systems have a superior competitive advantage than those without it (Walsh and Fisher,
2005).
2.4 The performance appraisal process
If a systematic performance appraisal process is followed, the ability to generate accurate and
reliable data will be enhanced as a result the information that can serve the organization's goals
and that complies with the law will be provided (Ivancevich, 2004). According to Rao & Rani
(2014), unfair procedures of the performance appraisal create job dissatisfaction.
Manjunath (2015) has listed the following steps for developing such a systematic process;
Figure 2.1 Performance appraisal process
Establishing Performance Standards
Communicating Standards and Expectations
Measuring the Actual Performance
Measuring the Actual Performance
Comparing the Actual with the Desired Performance
Discussing Results
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Decision Making
Source: Adopted from Manjunath (2015)
Establishing performance standards

It is the process of setting key performance criteria that could be used to judge the actual
performance of employees as successful or unsuccessful and the degrees of their contribution to
the organizational goals and objectives (Manjunath, 2015).
According to Khan (2013), these four dimensions of performance which are competencies,
behaviors, results or outcomes, and organizational citizenship behaviors should be considered in
performance appraisal. Besides the performance criteria should be based on the up –to –date job
description to ensure that the performance criteria are relevant to work practice. As Gomes
(2003) cited in Subekti and Setyadi (2016) has argued that the quantity of work, quality of work,
job knowledge, creativeness, cooperation, dependability, initiative, and personal qualities are
some indicators that become a performance appraisal measurement.
Communicating the standards
After setting the performance standards, the management should communicate them with the
employees of the organization. There should be a clear explanation of the standards to employees
so that they could understand their roles and know what exactly is expected from them
(Manjunath, 2015).
Measuring the actual performance
Measuring the actual performance or the work done by the employees during the specified period
is the most difficult part of the performance appraisal process. It is a continuous process
involving monitoring the performance all through the year which requires the watchful selection
of appropriate techniques of measurement, making sure there is no individual bias, and providing
support instead of interfering in employee's work (Manjunath, 2015).
Comparing the actual with the desired performance
To know whether there is a positive or negative deviation in the organizational performance, the
actual performance of an employee will be compared with the desired outcome or the standard
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performance. It includes recalling, evaluating, and analysis of data related to the employees'
performance (Manjunath, 2015).
Discussing results
Here the results of the appraisal will be communicated and discussed with the employees on a
one-to-one basis with the aim of problem solving and agreement. Feedback will also be given
with a positive attitude to have a positive effect on employee's performance and motivation
(Manjunath, 2015).
Decision making
After discussing the results, the last step is to decide on either to improve the performance of the
employee, take the necessary corrective action, or the related human resource decisions like
promotion, rewards, transfers, and the like (Manjunath, 2015).
2.5 Responsibility for Appraisal
An effective appraisal can be done by those who have;

 The opportunity to observe the performance
 The ability to translate observation into useful assessments
 The motivation to provide useful performance evaluation (Chatterjee, 1995).
This being the case, the following are responsible for an employee's performance appraisal.
Immediate supervisor
An employee's immediate supervisor is a common alternative for appraising job performance.
There are several valid reasons for this approach. These are;
 The supervisor is the one most familiar with the individual's performance.
 In most jobs, the supervisor has the best opportunity to observe actual performance.
 Since the supervisor has a proper understanding of organizational objectives, needs, and
influences, he/she is best able to relate to the individual's performance to departmental
and organizational goals.
 Since the supervisor is held accountable for the successful operation of his/her
department, it is logical for him to exercise control over personnel and administrative
decisions affecting his/her subordinates (Chatterjee, 1995). Moreover, since the
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supervisor is in a better position, he can link effective performance with regards such as
pay and promotion.
Peer evaluation
In the workplace, a peer is an individual working with and at the same level as the employee. In
this evaluation approach, the co-workers must know the level of performance of the employee
being evaluated. For the approach to work effectively the peers should trust each other and
evaluation should not be seen as a means for pay rises and promotions rather as a means to
improve work performance. Peer appraisal is reliable if the workgroup is stable over a reasonably
long period and performs tasks that require considerable interaction (Mondy and Noe, 1990).
Self-Appraisal
If employees understand the objectives they are expected to achieve and the standards by which
they are to be evaluated. They are in the best positions by which they are to be evaluated. They
are in the best position to appraise their performance (Mondy and Noe, 1990). Since there is a
tendency of exaggerating work achievement, this evaluation approach acts as inputs to
supervisory appraisals or as employee development tools (Mondy and Noe, 1990).
Subordinate evaluation.
In the subordinate evaluation system, it is believed that employees are in a good position to view
their immediate bosses' managerial effectiveness. In an academic environment;
 Students appraise the teaching performance of their instructors.
 Faculty members evaluate department heads and deans (Mondy and Noe, 1990).
Group Appraisal
Group appraisal involves the use of two or more managers who are familiar with the employee's
performance to evaluate it as a team (Mondy and Noe, 1990). For example, if an individual
regularly works with the administrative and financial managers, these two managers might jointly
make the evaluation.
Combinations
The combination of the above appraisal approaches can provide greater insight into and
employees' job performance. The section heads of employee appraisal can be supplemented by
peer and by the head of the department. For example, to minimize subjectivity, regional
15 | P a g e
presidents may be rated by office heads, Woreda & zone administrative, and people in the region
(Mondy and Noe, 1990).
2.6 Performance appraisal errors
The accuracy of the results of performance appraisal depends mostly upon the degree of error
freeness achieved by the evaluators. Even if appraisal errors are partly a result of evaluators'
attitudes, regardless of which appraisal method is used, it should be accepted that the features of
the appraisal method affect the appraisal errors. Every PAM has its unique structure and
procedure that cause performance appraisal errors to be effective to a certain extent. Although it
is hard to determine the level of this extent for each PAMs, the evaluation of the expert
practitioners can give the most precise results as accepted in this study. Since this study aims to
evaluate PAMs with a focus on the errors, first appraisal errors that will be used as evaluation
criteria must be determined. By a literature review, performance appraisal errors are determined
as presented below.
Performance Appraisal Errors Explanations
1. Perceived meanings of performance standards
This error emerges from a misunderstanding of performance appraisal standards stated in the
appraisal forms. Using a standard appraisal form consisting of the same criteria aiming to
measure specific qualities does not always lead to standard appraisals due to different perceptions
among the appraisers. This error results from a lack of common understanding of the
performance standards (Hakan Turgut & Ibrahim Sani Mert, 2014).
2. Halo/Horn effect
Evaluator's general perceptions of an employee influence his/her perception of a specific
dimension. This error has two opposite sides. One is the general evaluation of the employee
according to his/her strengths (halo effect) and overseeing the other possible weaknesses. The
other, the horn effect, is the opposite of the halo effect, where the employee is generally
evaluated according to his weaknesses and his/her strengths are overseen (Hakan Turgut &
Ibrahim Sani Mert, 2014).
3. Central tendency error
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This error is ignoring the strengths and weaknesses of an employee and mainly tending to
appraise the personnel in an average score. Some raters, rather than giving extreme poor or good
grades, to evaluate all rates tend to an average scoring even if the performance varies (Hakan
Turgut & Ibrahim Sani Mert, 2014).
4. Positive or negative leniency error
Positive leniency is the tendency to give high evaluation points in general, usually above the
deserved level. Negative leniency is vice versa, which gives generally low evaluation points,
regardless of the deserved level. It can be said that positive leniency is more frequent than
negative leniency, since, some raters are concerned about damaging a good working relationship
by giving poor or negative rating (Hakan Turgut & Ibrahim Sani Mert, 2014).
5. First impression and /or recency error
This error results from putting too much emphasis on the evaluators on his/her first impression of
the employee or more commonly from focusing on recent interactions with the employee. Since
the recent events or employee behaviors are more noticeable than the former ones, recent events
are weighted more heavily than they should be, in the performance appraisals. As a result of this,
some raters only tend to regard the latest events and/or behavior of the employee regardless of the
employee's actual performance (Hakan Turgut & Ibrahim Sani Mert, 2014).
6. Similar-to-me error
This error results from situations where the evaluator sees his employee's background, education,
attitudes, characteristics very similar to himself/herself, therefore grading higher in performance
appraisals. Due to this error, evaluators may tend to perceive others similar to them more
positively than they perceive those who are dissimilar (Hakan Turgut & Ibrahim Sani Mert,
2014).
7. Contrast error
Contrast error is observed where the evaluator compares one employee with the other instead of
the criteria dictated in the appraisal form. This often results in the under evaluation of some
employees due to comparing him/her with an employee who is seen as very successful by the
evaluator (Hakan Turgut & Ibrahim Sani Mert, 2014).
8. Insufficient Observation
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In some cases, employees are evaluated with a lack of sufficient information or observation on
how they perform on their work. Here the evaluator gives his/her evaluation point or comments
on his/her general perception without a detailed idea about the employee over a specific criterion.
(Hakan Turgut & Ibrahim Sani Mert, 2014)
2.7 Performance management
Performance management can be defined as a systematic process for improving organizational

performance by developing the performance of individuals and teams. It is a means of getting
better results from the organization, teams, and individuals by understanding and managing
performance within an agreed framework of planned goals, standards, and competence
requirements. Processes exist for establishing shared understanding about what is to be achieved,
and for managing and developing people in a way that increases the probability that it will be
achieved in the short and longer-term. It is owned and driven by line management. (Michael
Armstrong, 2006)
2.7.1 Aims of performance management
The overall aim of performance management is to establish a high-performance culture in which

individuals and teams take responsibility for the continuous improvement of business processes
and their skills and contributions within a framework provided by effective leadership. Its key
purpose is to focus people on doing the right things by achieving goal clarity. Specifically,
performance management is about aligning individual objectives to organizational objectives and
ensuring that individuals uphold corporate core values. It provides for expectations to be defined
and agreed upon in terms of role responsibilities and accountabilities (expected to do), skills
(expected to have), and behaviors (expected to be). The aim is to develop the capacity of people
to meet and exceed expectations and to achieve their full potential to the benefit of themselves
and the organization. Importantly, performance management is concerned with ensuring that the
support and guidance people need to develop and improve are readily available. (Michael
Armstrong, 2006)
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2.7.2 Characteristics of performance management
Performance management is a planned process in which the primary elements are agreement,
measurement, feedback, positive reinforcement, and dialogue. It is concerned with measuring
outputs in the shape of delivered performance compared with expectations expressed as
objectives. In this respect, it focuses on targets, standards, and performance measures or
indicators. It is based on the agreement of role requirements, objectives and performance
improvement, and personal development plans. It provides the setting for on-going dialogues
about performance, which involves the joint and continuing review of achievements against
objectives, requirements, and plans. But it is also concerned with inputs and values. The inputs
are the knowledge, skills, and behaviors required to produce the expected results. Developmental
needs are identified by defining these requirements and assessing the extent to which the
expected levels of performance have been achieved through the effective use of knowledge and
skills and through appropriate behavior that upholds core values. (Michael Armstrong, 2006)
Performance management is a continuous and flexible process that involves managers and those
whom they manage acting as partners within a framework that sets out how they can best work
together to achieve the required results. It is based on the principle of management by contract
and agreement rather than management by command. It relies on consensus and cooperation
rather than control or coercion. (Michael Armstrong, 2006)
Performance management focuses on future performance planning and improvement rather than
on retrospective performance appraisal. It functions as a continuous and evolutionary process, in
which performance improves over time; and provides the basis for regular and frequent dialogues
between managers and individuals about performance and development needs. It is mainly
concerned with individual performance but it can also be applied to teams. The focus is on
development, although performance management is an important part of the reward system
through the provision of feedback and recognition and the identification of growth opportunities.
It may be associated with performance- or contribution-related pay but its developmental aspects
are much more important. (Michael Armstrong, 2006)
2.7.3 The process of performance management
Performance management should be regarded as a flexible process, not as a 'system'. The use of
the term 'system' implies a rigid, standardized, and bureaucratic approach, which is inconsistent
19 | P a g e
with the concept of performance management as a flexible and evolutionary, albeit coherent,
process that is applied by managers working with their teams following the circumstances in
which they operate. As such, it involves managers and those whom they manage acting as
partners, but within a framework that sets out how they can best work together. This framework
has to reduce the degree to which performance management is a top-down affair and it has to be
congruent with how the organization functions. Performance management has to fit process-
based and flexible organizations. In these circumstances, which are increasingly the norm, it has
to replace the type of appraisal system that only fits a hierarchical and bureaucratic organization.
The processes of performance management consist of:
 Planning: agreeing with objectives and competence requirements and producing
performance agreements and performance improvement and personal development plans.
 Acting: carrying out the activities required to achieve objectives and plans.
 Monitoring: checking on progress in achieving objectives.
 Reviewing: assessing progress and achievements so that action plans can be prepared and
agreed upon. (Michael Armstrong, 2006)
2.8 Performance appraisal and performance management
It is sometimes assumed that performance appraisal is the same thing as performance

management. But there are significant differences. Performance appraisal can be defined as the
formal assessment and rating of individuals by their managers at, usually, an annual review
meeting. In contrast, performance management is a continuous and much wider, more
comprehensive, and more natural process of management that clarifies mutual expectations,
emphasizes the support role of managers who are expected to act as coaches rather than judges
and focuses on the future. (Michael Armstrong, 2006)
Performance appraisal has been discredited because too often it has been operated as a top-down
and largely bureaucratic system owned by the HR department rather than by line managers. It
was often backward-looking, concentrating on what had gone wrong, rather than looking forward
to future development needs. Performance appraisal schemes existed in isolation. There was little
or no link between them and the needs of the business. Line managers have frequently rejected
performance appraisal schemes as being time consuming and irrelevant. Employees have
20 | P a g e
resented the superficial nature with which appraisals have been conducted by managers who lack
the skills required, tend to be biased, and are simply going through the motions. (Michael
Armstrong, 2006)
CHAPTER THREE: DATA PRESENTATION, ANALYSIS &

INTERPRETATION
3.1 Introduction
This chapter deals with the analysis, interpretation, and discussion of the data collected through
questionnaires and interviews. Responses for measures on the questionnaire are summarized and
presented by using tables.
To get representative data 65 questionnaires were prepared and distributed to employees of Ethio
telecom for those who work in Semien Addis Ababa zone. Thus the analysis is based on the valid
60 questionnaire responses. The data were analyzed using the Microsoft Excel program. The
researcher used descriptive statics for the presentation and interpretation of the data.
21 | P a g e
3.2. Demographic Characteristics
Demographic background information of respondents was deemed necessary because the ability
of the respondents to give satisfactory information on the study variables depends on their
background.
In the following table, the demographic information of respondents is presented. These include
gender, age, educational qualifications, marital status, and work experience for staff. Their
responses are presented and analyzed as follows.
Table 3.1Gender profile of respondents
Sex Number Percentage

Male 28 46.66%
Female 32 53.33%
Total 60 100%
The frequency distribution of the gender profile of the respondents is given in table 3.1 above.
The table shows that 60 of the respondents representing (28) 46.66%are male and (32) 53.33% of
respondents representing are female. The table shows the gender distribution for female staffs is
larger than male staffs. The number of male and female respondents is almost proportional.
These findings represent the views of the two sex groups about the Performance appraisal
practice of Ethio telecom. This was necessary for the study to get a balanced picture of the
respondents’ views.
Table 3.2 Marital status and age of respondents
Marital status Number Percentage
Single 12 20%
Married 48 80%
Divorced _ _
Widowed _ _
Total 60 100%
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Age Number Percentage
18-30 16 26.666%
31-40 28 46.66%
41-50 16 26.666%
Above 50 _ _
Total 60 100%
From the above information/the first part of table 48 (80%) of the employee who answered the
questionnaire are married, 12 (20%) of them are single. This indicates that the majority of the
respondents have fallen to the responsibility to accurately answer the questions in the
questionnaire.
From the second part of the table (28), 46.66% of an employee who answered the question was
categorized under 31-40 years age category, the other two categories 18-30 and above 45 equally
shared the remaining 26.666%. This implies that most of the employees of Ethio telecom are
Adults. The table also shows the data we gathered is affair representation of the population as
almost all classes were represented and the data provided reflected the views of the entire
population.
Table 3.3 Academic background and years of experience of the respondents
Academic background Number Percentage

Diploma _ _
Degree 56 93.333
Master 4 6.666
Ph.D. _ _
Total 60 100%
Years of experience Number Percentage
Less than 3 years 4 6.666%
3-6 years 16 26.666%
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6-9 years 8 13.333%
9-12 years 8 13.333%
Above 12 years 24 40%
Total 60 100%
It is possible to understand from the above table that the majority (93.333%) of the workforce is
in the category of BA degree, additionally, the table above shows the second Ethio telecom’s
employees educational category is Master (6.666) . This implies that almost all of Ethio telecom
workers have the potential to understand what we asked.
The second table indicates the work experience of respondents. Regarding respondents work
experience 24 (40%) of the respondents had served in Ethio telecom for a period of above 12
years, 16 (26.667%) for a period of 3-6 years, both 6-9 years and 9-12 years of experienced
workers equally shared the percentage of 8 (13.333%). This implies that almost all respondents
had taken reasonably enough experience to see how the performance evaluation process in the
institute is undertaken.
3.3 Respondents Opinion towards Performance Appraisal practice
3.3.1 Objectives of PA in Ethio telecom
Feedbacks from performance evaluation need to motivate employees through recognition and
support. According to Armstrong (2009), the emphasis is on development, although performance
management is an important part of the reward system through the provision of feedback and
recognition and the identification of growth opportunities. It may be associated with performance
or contribution related pay but its developmental aspects are much more important. Regarding
objectives of performance appraisal in Ethio telecom the data collected is presented for
discussion and analysis in the tables below.
Table 3.4 is Performance evaluation used to give feedback to employees?
QUESTION Frequency ANSWER Total

Vs. SA A N D SD
Percentage
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The information generated Frequency 16 36 8 - - 60
through Performance evaluation Percentage 26.66% 60% 13.33% - - 100%
is used to give feedback to
employees
Table 3.4 indicates is Performance evaluation used to give feedback to employees? Regarding
respondents (26.66%) of the total respondent strongly agreed, 60% of them agreed, 13.33% are
being indifferent and none of them disagree. according to their information, the majority of the
employee’s response falls into the agreeing and strongly agree answers category, which indicates
Information generated through Performance evaluation is used to give feedback to employees.
Table 3.5 is Performance evaluation strongly determines pay and promotion decisions?

Vs. SA A N D SD
percentag
e
Information generated Frequency 16 28 8 8 - 60
through Performance Percentage 26.66% 46.66 13.33% 13.33 - 100%
evaluation strongly % %
determines pay and
promotion decisions
From table 3.5 it is possible to learn that, from the total number of respondents the majority
(73.32%) agreed and strongly agreed, while 13.33% disagreed and also 13.33% are indifferent
regarding the claim that the information generated through performance appraisal was used for
motivating employees. According to their response, the information generated through
Performance evaluation strongly determines pay and promotion decisions. But still, some
employees didn’t believe or not exactly know PA practiced at their company determines pay and
promotion decisions.
Table 3.6 Is Performance evaluation used to motivate employees?

Vs. SA A N D SD
Percentage
The information generated Frequency 20 24 8 8 - 60
through Performance evaluation Percentage 33.33% 40% 13.33 13.33% - 100%
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is used to motivate employees %
through recognition and support.
From table 3.6 it is possible to learn that of the total number of respondents, the majority
(73.33%) agreed, while 13.33% disagreed and also (13.33%) are indifferent regarding the claim
that the information generated through performance appraisal is used for motivating employees.
This indicates the information generated through performance evaluation is used to motivate
employees through recognition and support, but still some employees didn't believe or not exactly
know PA practiced at their company used as a means of motivating employees through
recognition and support.
Table 3.7 is performance evaluation used to counsel and coach employees?

Vs. SA A N D SD
Percentage
The information generated through Frequency 28 24 8 - - 60
performance evaluation is used to Percentage 46.66 40% 13.33% - - 100%
counsel and coach employees so that %
they will improve their performance
and develop their respective
potential.
It is possible to understand from the above table that the majority of employees (86.66%) are
agreed about the statement, while 13.33% of employees neither agreed nor disagreed, none of
them disagreed that information generated through performance appraisal is used as a basis for
the stated decision purpose.
Table 3.8 is performance evaluation designed to strengthen the relationship between supervisors
and subordinates?

Vs. SA A N D SD
Percentage
The information generated through Frequency 24 32 4 - -
performance evaluation is designed to Percentage 40 53.3 6.66 - -
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strengthen the relationship between 3
supervisors and subordinates
According to table 3.8 regarding PA used to strengthen the relationship between superiors and
subordinates, the majority (93.33%) of respondents agreed, while (6.66%) are indifferent and
(0%) of them disagreed. Based On the above results it’s not hard to say Information generated
through performance evaluation is designed to strengthen the relationship between supervisors
and subordinates.
Table 3.9 The performance appraisal practice of Ethio telecom

Vs. SA A N D SD
Percentage
The performance appraisal Frequency 32 8 12 8 - 60
practice of Ethio telecom Percentage 53.33% 13.33 20% 13.33 - 100%
facilitates a good way to % %
communicate the assessment
result
Table 3.9 indicates is the performance appraisal practice of Ethio telecom facilitates a good way
to communicate the assessment result? Regarding respondents (53.33%) strongly agreed,
(13.33%) agreed, (20%) neutral and (13.33%) disagreed. This implies that even if the majority of
employees believe Ethio telecom’s way of communicating PA result is good, but still some
employees answered neutral and disagree on that same question.
3.3.2 Criteria for Performance Appraisal

According to Armstrong (2009), the criteria for reviewing performance should be balanced
between achievements about objectives; the level of knowledge and skills possessed and applied
(competences or technical competencies); behavior in the job as it affects performance
(competencies); the degree to which behavior upholds the core values of the organization; day-to-
day effectiveness.
Regarding criteria for Performance Appraisal in Ethio telecom the data collected, is presented for
discussion and analysis in the tables below.
27 | P a g e
Table 3.10 Performance appraisal in the organization

Vs. SA A N D SD
percentag
e
I know the existence of Frequency 28 28 4 - - 60
Performance appraisal in the Percentage 46.66 46.66 6.66 - - 100%
organization
From the above table, it is possible to understand that the majority (93.33%) know the existence
of performance appraisal in Ethio telecom. And only 6.66% 0f respondents are neutral about the
existence of PA in their organization. Based On the above results it's not hard to say employees
of Ethio telecom know the existence of Performance appraisal in the organization.
Table 3.11 purpose of performance appraisal practice

Vs. SA A N D SD
Percentage
I know the purpose of Frequency 40 4 12 - 4 60
performance appraisal Percentage 66.66 6.66 20 - 6.66 100%
practice
From Table 3.11 we can understand the employee's answer to the question I know the purpose of
performance appraisal practice? (73.32%) majority of employees agreed and strongly agreed,
while some employees (20%) are neutral and very few employees (6.6%) strongly disagreed.
This implies employees of Ethio telecom know the purpose of performance appraisal practice.
Table 3.12 criteria of performance appraisal practice

Vs. SA A N D SD
percentag
e
I know the criteria of Frequency 28 20 4 4 4 60
performance appraisal Percentage 46.66 33.33 6.66 6.66 6.66 100%
28 | P a g e
practice
Table 3.12 indicates the answer for I know the criteria of performance appraisal practice? The
majority of the respondents (80%) said that they know the criteria used to evaluate performance
appraisal practice, whereas 6.66% and 13.32% of employees respond neutral and disagree reflect
respectively. This implies that employees of Ethio telecom understand the criteria of performance
appraisal practice.
Table 3.13 objectivity of criteria/instrument used to measure employees performance

Vs. SA A N D SD
percentag
e
The performance Frequency 16 28 8 8 - 60
criteria/instrument used to Percentage 26.66 46.66 13.33 13.33 - 100%
measure my performance are
clear and objective
Table 3.13 indicates the answer for the performance criteria/instrument used to measure my
performance is clear and objective? The majority of the respondents (73.32%) agreed, whereas
13.33% and 13.33% of employees respond neutral and disagree reflect respectively. This
indicates that the criteria used to measure the performance of employees are clear and objective.
Table 3.14 the opportunity to participate in the design of the performance evaluation

Vs. SA A N D SD
percentag
e
I have got the opportunity to Frequency 12 12 16 12 8 60
participate in the design of Percentage 20 20 26.66 20 13.3 100%
the performance evaluation 3
form used to measure my
performance
29 | P a g e
Table 3.14 indicates the answer for I have got the opportunity to participate in the design of the
performance evaluation form used to measure my performance? The majority of the respondents
(40%) agreed, whereas 26.66% and 33.33% of employees respond neutral and disagree
respectively. This indicates the majority of employees at Ethio telecom participated in the design
of their performance evaluation form this is good, but still some employees didn't agree with that.
Table 3.15 is PE is customized based on the characteristics of your job?

Vs. SA A N D SD
Percentage
The performance evaluation Frequency 12 24 16 8 - 60
form used to evaluate my Percentage 20 40 26.66 13.33 - 100%
performance is customized
based on the characteristics of
my job.
Table 3.15 indicates the answer for is the performance evaluation form used to evaluate my
performance customized based on the characteristics of my job? The majority of the respondents
(60%) agreed, whereas 26.66% and 13.33% of employees respond neutral and disagree reflect
respectively. We can say the performance evaluation form used to evaluate employee's
performance is customized based on the characteristics of their job because as expressed in the
previous question Ethio telecom employee's representatives participated in the designing of the
performance evaluation forms.
Table 3.16 is the employee’s performance evaluated twice a year?

Vs. SA A N D SD
percentag
e
The employee’s performance Frequency 32 24 4 - - 60
is evaluated twice a year Percentage 53.33 40 6.66 - - 100%
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Table 3.16 indicates the answer for is the employee's performance evaluated twice a year? The
majority of the respondents (93%) agreed, whereas 6.66% and 0% of employees respond neutral
and disagree reflect respectively. This implies Ethio telecom evaluates its employee's
performance twice a year because no employee responds disagree and strongly disagree on the
question.
3.3.3 Potential Problems of PA in the Organizations under Study

According to Mathis and Jackson (1997), rater bias occurs when a rater’s values or prejudices
distort the rating. Rater bias may be unconscious or quite intentional. If a manager has a strong
dislike of certain ethnic groups, this bias is likely to result in distorted appraisal information for
some people. Age, religion, seniority, sex, appearance, or other arbitrary classifications may be
reflected in appraisals if the appraisal process is not properly designed. Examination of rating by
higher-level managers may help correct this problem.
Table 3.17 is your performance evaluated by the right/qualified person?

Vs. SA A N D SD
percentag
e
Do you think your Frequency 12 28 8 12 - 60
performance is evaluated by Percentage 20% 46.66 13.33% 20% - 100%
the right/qualified person %
Table 3.17 indicates the answer to do you think your performance is evaluated by the
right/qualified person? The majority of the respondents (66.66%) agreed, whereas 13.33% and
20% of employees respond neutral and disagree reflect respectively. This indicates employees of
Ethio telecom believe their performance is evaluated by the right/qualified person, but still some
employees didn't agree with that.
Table 3.18 I have ways to appeal to a biased performance rating

Vs. SA A N D SD
percentage
I have ways to appeal to a Frequency 20 20 8 4 8 60
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performance rating that I Percentage 33.33 33.33% 13.33 6.66% 13.33% 100%
think is biased and % %
inaccurate
Table 3.18 indicates the answer for I have ways to appeal to a performance rating that I think is
biased and inaccurate? The majority of the respondents (66.66%) agreed, 13.33% neutral, and
19.99% of employees respond disagreed. This indicates the majority of employees at Ethio
telecom believe that they have ways to appeal to a performance rating that they think is biased
and inaccurate this is good, but still some employees didn't agree and answered neutral on that
same question.
Table 3.19 I can challenge a performance rating if I think it is biased

Vs. SA A N D SD
Percentage
I can challenge a performance Frequency 20 28 12 - - 60
rating if I think it is biased or Percentage 33.33% 46.66 20% - - 100%
inaccurate %
Table 3.19 indicates the answer for I can challenge a performance rating if I think it is biased or
inaccurate? The majority of the respondents (79.99%) agreed, whereas 20% and 0% of
employees respond neutral and disagree reflect respectively. It's not hard to say that employees of
Ethio telecom can challenge a performance rating if they think it is biased or inaccurate because
no employee responds disagree and strongly disagree.
Table 3.20 The evaluator is influenced by personal liking and disliking

Vs. SA A N D SD
percentag
e
The evaluator is influenced Frequency 12 12 24 12 60
by personal liking and Percentage 20% 20% 40% 20% 100%
disliking when evaluating my
performance.
Table 3.20 indicates the answer for is the evaluator influenced by personal liking and disliking
when evaluating my performance? The majority of the respondents (40%) agreed, whereas 40%
32 | P a g e
and 20% of employees respond neutral and disagree respectively. This implies employees of
Ethio telecom believes that the evaluator is influenced by personal liking and disliking when
evaluating their performance.
Table 3.21 To avoid resentment my supervisor gives equivalent ratings

Vs. SA A N D SD
percentag
e
To avoid resentment and Frequency 16 12 28 4 - 60
rivalry among colleagues, my Percentage 26.66% 20% 46.66% 6.66% - 100%
supervisor give equivalent
ratings
Table 3.21 indicates the answer for, to avoid resentment and rivalry among colleagues, my
supervisor gives equivalent ratings? The majority of the respondents (46.66%) agreed, 46.66%
respond neutral and 6.66 % of employees respond disagree. This implies employees of Ethio
telecom believe that to avoid resentment and rivalry among colleagues, their supervisor gives
equivalent ratings.
Table 3.22 Evaluation of my performance is based on my accomplishment and achievement

Vs. SA A N D SD
percentag
e
Evaluation of my Frequency 16 16 12 16 - 60
performance is based on my Percentage 26.66% 26.66 20% 26.666% - 100%
accomplishment and %
achievement.
Table 3.22 indicates the answer for is evaluation of my performance is based on my

accomplishment and achievement? The majority of the respondents (53.32 %) agreed, whereas
20% and 26.66% of employees respond neutral and disagree reflect respectively. This indicates
employees of Ethio telecom believe that the evaluation of their performance is based on their
accomplishment and achievement, but there are many employees almost equal with the majority
who didn't agree on that.
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Table 3.23 I used to work hard only making sure that my supervisor watched what I am doing

Vs. SA A N D SD
Percentage
I used to work hard only Frequency 16 12 20 4 8 60
making sure that my Percentage 26.66 20 33.33 6.66 13.33 100%
supervisor watched what I
am doing
Table 3.23 indicates the answer for I used to work hard only making sure that my supervisor
watched what I am doing? The majority of the respondents (46.66%) agreed, whereas 33.33%
and 19.99% of employees respond neutral and disagree reflect respectively. This implies
employees of Ethio telecom used to work hard only when their supervisor watched what they are
doing.
3.3.4. Performance Appraisal Practice and Process in Ethio telecom

According to the interview with the human resource department manager of Ethio telecom the
performance appraisal practice of the company is described as follows.
 Ethio telecom has a goal-setting process before the beginning of every calendar.
 The employees of Ethio telecom have a chance to participate in the goal-setting process
through their representatives.
 Ethio telecom uses BSC (balance scorecard) performance appraisal techniques.
 To check the reliability and fairness of the performance appraisal technique Ethio check
that if they follow the main goal and fulfill the functions of their department.
 The information generated through performance evaluation is used for training, salary
increment, and compensation, placement, and promotion decisions.
 Ethio telecom evaluates its employee's performance twice a year.
 Subjectivity is one of the major problems that Ethio telecom faces during the evaluation
of its employee's performance.
 Ethio telecom communicates the performance appraisal result of employees through e-
mail and in-person communication methods.
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 The HR manager suggested to avoiding subjectivity and other limitations of the
performance appraisal practice Ethio telecom should use additional performance
appraisal techniques in addition to BSC( balance scorecard)
CHAPTER FOUR - SUMMARY OF FINDINGS,

CONCLUSIONS AND RECOMMENDATIONS
4.1 Summary of Findings
The major objective of the study is to assess the employee's performance appraisal practice in the
Ethio telecom Semien Addis Ababa zone. To achieve the objective, questionnaire and interview
methods were employed. In the previous chapter, analysis and interpretation of the study were
made based on the data obtained through a questionnaire distributed to employees of Ethio
telecom and an interview conducted with the HR department manager of Ethio telecom. The
purpose of this chapter is to discuss the findings, draw conclusions, and recommendations to the
results presented in the previous chapter.
According to the analysis made in chapter three the major findings of the study are the following:
40% of the respondents believe that the evaluator is influenced by personal liking and disliking
when evaluating their performance. And also 40% of respondents believe that they didn't know
35 | P a g e
either the evaluator is influenced by personal liking and disliking or not when evaluating their
performance. 46.66% of the respondents believe that to avoid resentment and rivalry among
colleagues, their supervisor gives equivalent ratings. 26.66% and 33.33% of employees respond
neutral and disagree with the question I have got the opportunity to participate in the design of
the performance evaluation form used to measure my performance. (46.66%) of the respondents
agreed to the question I used to work hard only when my supervisor watched what I am doing.
33.33% answered neutral for the question I used to work hard only when my supervisor watched
what I am doing.
4.2 Conclusions
Based on the summary of the findings the following conclusions are driven:
Individual performance is the foundation of organizational performance. Improving individual
performance is critical for the success of every organization. Performance evaluation is a
common practice in the life of the organization. Failure to have a proper employee performance
appraisal system leads to the failure of the business organization itself.
Performance appraisal aims to evaluate the job performance of employees to improve their
performance and consequently the organization's performance. To do so performance appraisal
system should use job-related criteria, an appropriate method of appraisal for each purpose, a
qualified and well-trained appraiser, and participation of employees in one way or the other.
The objective of the study is to assess the performance appraisal practice of Ethio telecom
Semien Addis Ababa zone in doing so the study tries to analyze the gathered data. In
investigating the performance appraisal system of the company, it has been found that:
 The performance raters of Ethio telecom affect their subordinate’s results both negatively
and positively based on their likings and dislikings.
 The performance raters of Ethio telecom give equivalent ratings to avoid resentment and
rivalry among colleagues.
 Employees of Ethio telecom have a habit of working hard only when they are observed by
their supervisor.
 Ethio telecom is not providing opportunities to all employees to participate in the design
of form used to evaluate their employees' performance
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 The employee's representative of Ethio telecom participated in the designing phase of the
performance appraisal form.
 The employees of Ethio telecom can challenge their performance rating if they believe
their performance evaluation result is not accurate or biased.
4.3 Recommendations
Based on the analysis and its findings, the following recommendations have been given:
 Biases of different types, such as personal liking and disliking, avoiding, and giving
performance rating may have negative consequences to employees, but they can be
managed by developing policy that can guide and control the existence of such practice in
Ethio telecom.
 The performance appraisal criteria should be specific to reduce subjective judgment that
comes from generalization.
 Ethio telecom needs to use the performance appraisal practice to help the employees to
improve their job. For such purposes, they should develop a policy which enhances the
improvement of employees' job and also the employee's belongingness to their company
 The form used for PA of employees should measure the employees' achievement and
accomplishments and to this effect, all employees should participate in the preparation of
performance appraisal, these can create transparency, reduces form used
cumbersomeness, and promote trust among them.
 As stated in the interpretation of the interview question part Ethio telecom uses BSC
(balance scorecard) performance appraisal technique for measuring the performance of its
employees. To fill the limitations of the BSC (balance score card) performance appraisal
technique Ethio telecom should also use other PA techniques.
 Employees of Ethio telecom can challenge their performance rating if their performance
evaluation result is not accurate or biased. This indicates employees of Ethio telecom
have trust in their company's performance appraisal system. The company should keep
their trust by correcting biased and inaccurate results.
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References
 Aharon Tziner, Kevin R. Murphy. (1999). understanding performance appraisal. (1st
Ed.), Thousand Oaks: Calif Sage publications.
 Allan H. Church and Janine Waclawski. (2009). Strategy-driven talent management. (1st
Ed.), State University of New York, Albany: Personnel Decisions Research Institute, Inc.
 Armstrong, M. (2009). A handbook of personnel management practice. (11th Ed.),
London: Kogan Page Ltd.
 Chatterjee Bhaskar. (1997). Human Resource Management. New Delhi: sterling
publisher’s private limited Inc.
 Deborah F. Boice and Brian H. Kleiner. (1997). Designing an effective performance
appraisal system. Work-study, vol.46, No.6
 Gomez Mejia, Luis R. Balkin, David B, and Cardy, Robert L. (2001). Managing Human
Resource: Pearson Edition.
 Hakan Turgut & Ibrahim Sani Mert. (2014). Human Resource Management, (3rd Ed.),
Pearson Education
 Herman Aguinis. (2009).Performance management. (2nd Ed.), New Jersey: John Wiley &
Sons, Inc. Retrieved from https://1lib.eu/book/5247665/c0e3fd
 June M.L. Poon. (2004). Effects of performance appraisal politics on job satisfaction and
turnover intention. Personnel Review, vol.33 No.3
 Manmohan Joshi. (2013). Human resource management (1st Ed.), New Delhi: book
bone.com Ltd.
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 Mathis, Robert L., and Jackson John H. (1997). Human Resource Management (8th Ed.),
New York: West Publishing Company.
 Mondy, R. Wayne, and Noe, Robert M, (1988), Human Resource Management,
Massachusetts: Siman and Schuster, Inc.
 Mondy, Neo, and Premeax, (1999); Human Resource Management (4th Ed.), Boston:
Allyn and Bacon.
 Noe, Raymond A. [et al] (2008) fundamentals of human resource management (8th Ed.),
Mc Graw-Hill/Irwin, New York.
 Vishal Gupta, Sushil Kumar (2013) Impact of performance appraisal justice on employee
engagement, the international journal of HRM, 26(6).
 Walash and Fisher, (2005) Action inquiry and performance appraisals. Cornell
University.
 Wether, J. And Davis, K (1996), Human Resource and Personnel Management (5th ED.),
Mc Graw-Hill, New York.
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APPENDIX ONE: QUESTIONNAIRE
ADDIS ABABA UNIVERSITY
College of business and economics
Department of management
Date……/……. /…….
Questionnaire
Dear respondent,
This questionnaire is prepared by undergraduate degree students to collect data for the research
entitled “Assessment of employee’s performance appraisal practice: The case of Ethio
Telecom Semien Addis Ababa zone” to the partial fulfillment of B.A degree in management.
All information you give is very useful for academic purposes and will keep confidential. The
validity of your response will highly contribute to the success of this research paper I would like
to ask with due respect to give your genuine response.
PART I: PERSONAL INFORMATION
1. Sex
Female Male
2. Your Age
18-30 31-40 41-50 Above 50
3. Your education level
Diploma Degree Master PhD
4. Year of service in your current position
<3 3-6 6-9 9-12 above 12
5. Marital status
Married Divorced Single Widowed
i|Page
PART II: JOB-RELATED QUESTION
Close-ended questions
SA = strongly agree A = agree N= neutral D= dis agree SD= strongly dis agree
NO QUESTION ANSWER
SA A N D SD
1 I know the existence of Performance appraisal in the
organization
2 I know the purpose of performance appraisal practice
3 I know the criteria of performance appraisal practice
4 The performance criteria/instruments used to measure
my performance are clearly defined and objective
5 Do you think your performance is evaluated by the
right/qualified person
6 I have got the opportunity to participate in the design of
the performance evaluation form used to measure my
performance
7 The performance evaluation form used to evaluate my
performance is customized based on the characteristics
of my job.
8 The information generated through Performance
evaluation is used to give feedback to subordinate
evaluation strongly determines pay and promotion
decisions
evaluation is used to motivate subordinates through
recognition and support.
11 The information generated through performance
evaluation is used to counsel and coach subordinates so
that they will improve their performance and develop
their respective potential.
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12 The information generated through performance
evaluation is designed to strengthen the relationship
between supervisors and subordinates
13 The employee’s performance is evaluated twice a year
14 I have ways to appeal to a performance rating that I
think is biased and inaccurate
15 I can challenge a performance rating if I think it is
biased or inaccurate.
16 The evaluator is influenced by personal liking and
disliking when evaluating my performance.
17 The performance appraisal practice of Ethio telecom
facilitates a good way to communicate the assessment
result
18 To avoid resentment and rivalry among
colleagues, my supervisor gives equivalent ratings
19 Evaluation of my performance is based on my
accomplishment and achievement.
20 I used to work hard only making sure that my
supervisor watched what I am doing
Interview questions for Ethio telecom HR manager

Interview question for Ethio telecom Semien Addis Ababa zone human resource management
department employees.
1. Is there a goal setting process before the start of any appraisal period?
____________________________________________________________________________
2. If there is a goal setting process, are employees involved in the process?

_____________________________________________________________________________
3. What performance appraisal techniques do institutes use?
______________________________________________________________________________
4. How do you test the reliability and fairness of the appraisal techniques?
iii | P a g e
_____________________________________________________________________________________
5. For what purpose mainly do the institutes use the result of the appraisal?
_____________________________________________________________________________________
6. What are the major problems that you face in executing the performance
appraisal process? _______________________________________________________________
7. How do you communicate appraisal results to the employees?

_____________________________________________________________________________________
8. What are the strengths & weakness did you notice in the performance
appraisal method in your Ethio telecom?
Strength_______________________________________________________________________
______________________________________________________________________________
Weakness______________________________________________________________________
______________________________________________________________________________
9. What do you suggest to solve those weaknesses?
Appendix two: permission letter
iv | P a g e
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ASSESSMENT OF EMPLOYEE'S PERFORMANCE APPRAISAL PRACTICE: THE

CASE OF ETHIO TELECOM SEMIEN Addis Ababa ZONE

A RESEARCH REPORT SUBMITTED TO DEPARTMENT OF MANAGEMENT FOR

PREPARED BY: NATINAEL ABEBE

ADVISOR: ISMAEL KEDIR

ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

NOVEMBER, 2020 G.C

ADDIS ABABA, ETHIOPIA

 HRM-Human resource management

 MBO -Management by objectives

 PAM- performance appraisal method

 PAR-Performance appraisal result

 PAS- Performance appraisal system

 PE- Performance evaluation

Table 3.2 Marital status and age of respondents…………………….……………………………24

Table 3.3 Academic background and years of experience of the respondents…………………...25

Table 3.4 is Performance evaluation used to give feedback to employees....................................26

Table 3.6 Is Performance evaluation used to motivate employees……………………………….27

Table 3.7 is performance evaluation used to counsel and coach employees……………………..27

Table 3.9 the performance appraisal practice of Ethio telecom………………………………….28

Table 3.10 Performance appraisal in the organization…………………………………………...29

Table 3.11 purpose of performance appraisal practice…………………………………………...30

Table 3.12 criteria of performance appraisal practice……………………………………………30

Table 3.13 objectivity of criteria/instrument used to measure employees performance…………30

Table 3.15 is PE is customized based on the characteristics of your job………………………...31

Table 3.16 is the employee’s performance evaluated twice a year………………………………32

Table 3.17 is your performance evaluated by the right/qualified person ………………………..33

Table 3.18 I have ways to appeal to a biased performance rating……………………………….33

Table 3.19 I can challenge a performance rating if I think it is biased…………………………..34

Table 3.21 to avoid resentment my supervisor gives equivalent ratings…………………………34

Table 3.22 Evaluation of my performance is based on my accomplishment and achievement….35

1. 1 Background of the study

1.2 Statement of the problem

1.3 Objectives of the study

 To assess how frequently Ethio telecom use performance appraisal practice?

1.4 Research Question

1.5 Significance of the study

1.6 Delimitations (Scope) of the study

1.7 Limitation of the Study

1.8 Research methodology

1.8.2 Target population

1.8.3 Sample, sample size and Sampling Technique

Strata N(total population) n(sample size)

1.8.4Sources of Data and Collection Methods

1.8.5 Validity and reliability of the instrument

Cronbach’s Alpha Number of items

1.8.6 Data gathering procedures

1.8.7 Data analysis

1.8.8 Ethical issue

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1 Meaning and Definition of Performance appraisal

Performance appraisal means the systematic evaluation of the performance of an employee by

2.2 Where did performance appraisals come from?

1. Necessary information for facilitating managerial decisions related to personnel

2.4 The performance appraisal process

Establishing Performance Standards

Communicating Standards and Expectations

Measuring the Actual Performance