THE EFFECT OF PERFORMANCE APPRAISAL PRACTICE ON

EMPLOYEE JOB SATISFACTION

(THE CASE OF ETHIO TELECOM)
BY
HANNA AKALEWORK

A THESIS REPORT SUBMITTED TO MARYLAND

INTERNATINOAL COLLEGE, SCHOOL OF GRADUATE
STUDIES IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE DEGREE OF GENERAL MASTER
OF BUSINESS ADMINISTRATION

MARYLAND INTERNATIONAL COLLEGE

SCHOOL OF GRADUATE STUDIES
MBA PROGRAM

November 2024
Addis Ababa, Ethiopia

i
 THE EFFECT OF PERFORMANCE APPRAISAL PRACTICE ON
EMPLOYEE JOB SATISFACTION
THE CASE OF ETHIOTELECOM (EAST ADDIS ABABA ZONE).
BY
HANNA AKALEWORK
UNDER THE GUIDANCE OF
ARON HAILESELLASIE (PH.D)

A THESIS SUBMITTED TO THE SCHOOL OF GRADUATE STUDIES

OF MARYLAND INTERNATIONAL COLLEGE IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF
THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION
(MBA)
MARYLAND INTERNATIONAL COLLEGE
SCHOOL OF GRADUATE STUDIES
MBA PROGRAM
November 2024
Addis Ababa, Ethiopia

i
 DECLARATION

I hereby declare that this thesis is my original work, where every source that provided information for
the thesis has been properly credited. I additionally the thesis has not been submitted, in whole or in
part, to any other university with the intention of receiving a degree from another educational
institutions.

Name of student: ______________________ Signature: ___________________

Place: _________________________ Date: ____________________

ii
 CERTIFICATE

This thesis in the title is about the impact of job performance appraisal on employee job satisfaction
by looking at the survey case of Ethio Telecom to confirm that it is the award of Maryland
International College. We have verified the history of integrity research conducted by Mrs. Hanna
Akalework under our guidance and supervision. Therefore, we declare that no part of this thesis has
been submitted to any other university or institution for any degree or diploma.

Main Adviser’s Name Date Signature

Aron Hailesellasie(PhD)________________

iii
 ACKNOWLEDGMENT

God deserves great praise for the completion of this work. I am very thankful to my dear family and
colleagues who gave me constructive feedback in preparing and structuring this article. I also have
great respect for my mentor Dr. Aron Haile Selasie who sacrificed his precious time by sharing his
knowledge and experience and giving guidance and correction to make the writing a successful one. I
would like to thank the staff of EAAZ Telecommunication as well as the managers and coordinators
for their support and assistance in delivering the necessary components. Dear mother, W/ro. Yhdega
Abraha, who is a deep motherly love, I sincerely thank you for the honor you have given us to reach
this stage. Finally, I would like to express my gratitude to my beloved husband, for his love, support
and patience.

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 MARYLAND INTERNATIONAL COLLEGE
SCHOOL OF GRADUATE STUDIES

FACTORS AFFECTING APPRAISAL ON EMPLOYEES

JOB PERFORMANCE
(THE CASE OF ETHIO TELECOM)

By
HANNA AKALEWORK

APPROVED BY BOARD OF EXAMINERS

___________________________ ______________________ ___________________
Dean, School of Graduate studies signature Date
___________________________ ______________________ ___________________
Research advisor
___________________________ ______________________ ___________________
External Examiner
___________________________ ______________________ ___________________
Internal Examiner

v
 ENDORSEMENT

This thesis titled “Factors Affecting Appraisal on Employees Job Performance has been submitted to
Maryland International College, School of Graduate Studies for examination with my approval as a
university advisor.

Aron Hailesellasie(PhD
Date ______________________

Signature __________________________

vi
 Table of Contents
DECLARATION ..................................................................................................................................... ii
CERTIFICATE ....................................................................................................................................... iii
ACKNOWLEDGMENT ........................................................................................................................ iv
ENDORSEMENT................................................................................................................................... vi
ABSTRACT ............................................................................................................................................. I
CHAPTR ONE ........................................................................................................................................ 1
INTRODUCTION ................................................................................................................................... 1
1.1Background of the study ..................................................................................................................... 1
1.2 Statement of the problem ................................................................................................................... 3
1.3 Research Questions ........................................................................................................................... 5
1.4 Objective of the study ........................................................................................................................ 5
1.4.1 General objective ............................................................................................................................ 5
1.4.2 Specific objectives .......................................................................................................................... 6
1.5 Hypotheses of the Study .................................................................................................................... 6
1.6 Significance of the study ................................................................................................................... 6
1.7 Scope of the study .............................................................................................................................. 7
1.8 Limitations of the study ..................................................................................................................... 7
1.9 Organization of the Paper .................................................................................................................. 7
CHAPTER TWO ..................................................................................................................................... 8
LITERATURE REVIEW ........................................................................................................................ 8
2.1.2 Performance appraisal and its’ multiple uses ............................................................................... 9
2,1,3 Employee evaluation .................................................................................................................... 10
2.1.3 Self-evaluations .......................................................................................................................... 10
2.1.4 Performance Appraisal Methods ................................................................................................ 10
2.1.5 Benefits of the Performance Appraisal....................................................................................... 12
2.1.6 Responsible Body to Conduct Performance Appraisal .............................................................. 12
2.1.7 Performance Appraisal Criteria .................................................................................................. 13
2.1.8 Performance criteria and impact ................................................................................................. 13
2.1.9 Pros and cons of performance appraisal ..................................................................................... 14
2.1.10 The Performance Appraisal Process ........................................................................................... 14

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2.1.12 Establish Performance Standards ............................................................................................... 15
2.1.13 Employee Communication ......................................................................................................... 15
2.1.14 Measure Employee Performance ................................................................................................ 15
2.1.15 Compare to all Employee Metrics .............................................................................................. 15
2.1.16 Employee Feedback.................................................................................................................... 15
2.1.17 Action Plan Development........................................................................................................... 16
2.2Conceptual Framework ..................................................................................................................... 16
CHAPTER THREE ............................................................................................................................... 17
RESEARCH METHODOLOGY .......................................................................................................... 17
INTRODUCTION ................................................................................................................................. 17
3.1 Research Design ............................................................................................................................. 17
3.2 Research Approach ......................................................................................................................... 17
3.3 Population size ................................................................................................................................. 18
3.4 Sample size and sampling Techniques ............................................................................................ 18
3.4.1 Sample size determination ............................................................................................................ 18
3.5 Sources of Data ................................................................................................................................ 18
3.5.1 Population and Sampling Procedure............................................................................................. 18
3.5.2 Population ................................................................................................................................... 18
3.5.3 Sample Size ................................................................................................................................ 19
3.5.4 Sampling Techniques ................................................................................................................. 19
3.6 Data Collection Instruments and Procedures ................................................................................... 19
3.7 Methods of Data Processing and Analysis ...................................................................................... 20
3.8. Validity and Reliability .................................................................................................................. 20
3.8.1. Validity ........................................................................................................................................ 20
3.8.2. Reliability .................................................................................................................................... 20
CHAPTER FOUR ................................................................................................................................ 22
RESULTS AND DISCUSSION ............................................................................................................ 22
4.1Response Rate of Respondents ......................................................................................................... 22
4.3 Association Between Study Variables............................................................................................. 34
4.4 The effect of organizational culture on employee job performance................................................. 35
4.4.1 Diagnostic tests 35
4.4.2 Test of multi collinearity................................................................................................................................... 36
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4.4.3 Tests of Independence (Autocorrelation) ......................................................................................................... 37
4.7 DISCUSSION OF FINDINGS ............................................................................................................................. 42
CHAPTER FIVE .................................................................................................................................. 44
SUMMARY, CONCLUSION AND RECOMENDATIONS .................................................................................. 44
5.1. SUMMERY 44
5.1 Conclusion ....................................................................................................................................... 46
5.2 Recommendations............................................................................................................................ 47
5.3 Limitation And Suggestions for Future Research ......................................................................... 48
REFERENCES ...................................................................................................................................... 50

List of Tables

Table 3:1: Population and Sample size……………………………………………………………………………19

Table 3.2: Instrument reliability test ………………………………………………………….…………………..20
Table 3.2: Instrument reliability test …………………………………………………………..……………......22
Table 4.1 Summarized descriptive analysis…………………………………………………….……………..…24
Table 4.2 Correlation Analysis…………………………………………………………………………….………..28
Table 4.3 Model Summary………………………………………………………………….…….…………….....30
Table 4.4 ANOVA Result ……………………………………………………………………….………………....30
Table 4.5 Coefficients…………………………………………………………………………….…………………..31
Table 4:6 Descriptive statistics………………………………………………………………………………..….33
Table 4:7 Correlation Matrix to Test Multi collinearity……………………………………………………36

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 ACRONYMS

CRM: Customer Relationship Management

ERP: Enterprise Resource Planning

FAN: Fixed Access Network

HR: Human Resource

EAAZ: East Addis Ababa Zone

OAM: Operation and Maintenance

MIC: Maryland International College

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 ABSTRACT

In this study, the effect of performance appraisal practice on employee job satisfaction is analyzed for
the case of ethio telecom. The research used stratified random sampling method, from the total of 100
employees found in the zonal office a random sample of 80 employees are taken from staffs. A total of
100 questionnaires were distributed assuming non responses and managed to collect 80 responses.
The data is analyzed using SPSS; the variables used to measure job satisfaction of employees have
strong correlation with job satisfaction. The correlation result implied the major components of
performance appraisal have positive relationship with job satisfaction. The method of research that is
used to study the problem is descriptive survey and explanatory where the researcher interacts with
the participant to conduct surveys using the questionnaire. Stratified random sampling technique was
used for this research. The strata are different departments in the zone office. The sources of data for
the study would be both primary and secondary. Regarding the primary source, data would be
collected for eighty-two employees out of two hundred thirty-six as a purposive sample from the EAAZ
offices of ethio telecom. Moreover, secondary data would be gathered from relevant documents such
as articles, journals, published and unpublished theoretical literatures and empirical studies. The
finding of the research indicated that most EAAZ employees are effect with the performance appraisal
system of ethio telecom. Finally, the management of ethiotelecom should use and apply clear and
measurable criteria or rates to conduct performance appraisal.
Keyword: Employee evaluation, self-evaluation, employee feedback, measure employee
performance,
,
.

I
 CHAPTR ONE
INTRODUCTION
This introduction of the study, the chapter of the researcher would be addressing background of the
study, an overview of the Ethio telecom organization under study, the problem statement. Besides, the
research question and study objectives, operational definitions of key words, limitation of the study.
scope of study is included in this chapter.
1.1 Background of the study
Performance is a construction (Quinn and Rohrbaugh, 1983; Venkatraman and Ramanujam, 1986;
Henri, 2004) and the purpose of defining this concept is to determine its properties and dimensions.
The notion of performance has an abstract character, and its definition is made by reference to other
concepts, on which it is believed that performance is built. Since 1950, studies in organizational
theory are based on the concept of effectiveness, and the terms of efficiency and performance are
considered interchangeable (Venkatraman and Ramanujam, 1986). Performance is difficult to define,
but it can have at least three meanings or connotations: . A successful outcome of an action or the
action itself, . Performance shows the ability to move, thanks to the constant efforts, . Performance is
the carrier of an ideology of progress, effort, always make better (Bourguignon, 1997).
Human resource management is critical to the success of the organizations because human capital has
certain qualities that make it valuable. In terms of business strategy, an organization can succeed if it
has a sustainable competitive advantage which means better than competitors at something and can
hold that advantage over a sustained period (Mondy et al., 2001). Job satisfaction is a factor that
would induce the employee to work in a long-term position. Regardless of job satisfaction the
organization or firm would confront the cost of recruitment caused by turnover (Mudor & Tooksoon,
2011).
Performance management can be defined as a systematic process for improving organizational
performance by developing the performance of individuals and teams (Armstrong, 2012).
Performance management is the system through which organizations set work goals, determine
performance standards, assign and evaluate work, provide performance feedback, determine training
and development needs and distribute rewards (Briscoe & Claus, 2008).
Performance management is a process involving performance planning, performance managing,
performance appraisal, performance rewarding and performance development (Deb, 2009).
Performance appraisal can be defined as the formal assessment and rating of individuals by their

1
managers (Armstrong, 2012). Performance appraisal is one of the most important HR management
tools and its efficient implementation is one of the greatest HR professionals‟ challenges, particularly
in terms of validity and reliability (Gupta and Kumar, 2013; Ivaldi et al., 2015). Performance
appraisal identifies the individual’s contribution to the organizational goals and establishes individual
performance standards (Ikramullah et al., 2012) and employees‟ performance appraisal is valuable for
the organization, the manager as well as for the employee evaluated (Lukášová, 2010). Snape et al.
(1998) also explained performance appraisal as a formal assessment of what employees have
performed. Its ultimate purpose is to allow employees to continue to improve their job performance
(Selvarajan et al., 2018) and teaching innovation (Benadusi and Giancola,
Ethio telecom is a name given before ten years by Federal Democratic Republic of Ethiopia when the
management of the company was outsourced for France Telecom. The company passed through
different names after its establishment by Emperor Minilik II in 1894. It is the only telecom operator
in Ethiopia for more than a century up until this time, which is currently operating with more than
16,000 employees (Ethiotelecom, 2020).
Job satisfaction is a complex and multifaceted concept, which can mean different things to different
people. It is more of an attitude, in internal state. It could be associated with a personal feeling of
achievement, either quantitative or qualitative (Mullins, 1999). He emphasized that the level of job
satisfaction is affected by a wide range of variables like individual, social factors, cultural factors,
organizational factors and environmental factors.
Ethio telecom uses Enterprise Resource Planning (ERP) system as a working tool for different
departments. Like Human Resource management, Supply chain management, Facility & Fleet
management, Finance activities, payroll administration etc. Additionally, it also uses Customer
Relationship Management (CRM) application software. The use of this application is at customer
service, contact center (call center), for sales activities, specifically focusing on customer retention
and ultimately driving sales growth, for managing SIM card, controlling numbering of telephone
numbers, bill management, manage a company's interaction with current and potential customers. It
uses data analysis about customers' history with a company to improve business relationships with
customers, etc…
Therefore, the Human Resource Management (HRM) of ethiotelecom can implement a reasonable and
measurable evaluating system of its employees supported by ERP at central level. Because these
universal well-known branded systems can support to evaluate by seeing the report of each employees

2
work activity. Because, the system can prepare a report for each job, when and by whom a job is
done. A reasonable and well measuring evaluation mechanism and using compatible with the job
description of each job titles evaluation method depend on the work done by the employee can
motivate employees. And can help to make corrective action at the time of ineffectiveness happening.
Especially, in ethiotelecom the performance result has equal 50% points with the sum of work
experience and educational back ground points for promotion or transfer purpose.
As we know the role of human resource department (HRD) is to improve the organization’s
effectiveness by providing employees with knowledge, skills and attitudes that would improve their
current or future job performance, training carefully and by using measurable appraisal template for
employee evaluation for identical professions. Unacceptable evaluating system has an impact on
employee’s satisfaction, benefits and future productivity affecting or growing bad relationship with
boss and other stuffs.
In this context, understanding the use of the same template for employee appraisal for identical
professions by different appraisers and its impact at ethio telecom. A highly skilled and committed
employees’ can assist the organization to achieve its goal at high performance. This research is trying
to search the reason behind the effect of performance appraisal practice on employees’ job satisfaction
in ethio telecom the case of Eas Addis Ababa Zone.
1.2 Statement of the problem
Organizations have three basic components i.e people, purpose, and structure. In human resource
literatures, humans/employees are considered as the most valuable assets of an organization.
Organizations are as good as their employees (Ekaterina Walter, 2013). To achieve high goals and
strategies organization need motivated employee. Employees that work in the organization as they are
working for their own gains. In today’s competitive environment organizations need motivated
employees and it is the responsibility of the organization that they make such policies that improve
employee performance. Organization should know the tactics how to motivate their employees or to
judge their behaviors’, feelings, and emotions (Katz, D. 1964). Goal clarity, feedback, knowledge of
structure, mental model, repertoire, motivation, environment is among the different factors affecting
employee performance (Fred Nickols, 2016). Performance evaluation/appraisal is a systematic means
of assuring if employees are accomplishing the jobs to the required or stated standards or it is a means
of identifying performance gaps of employees (NCN report HR Department’2010). This gap is the
problem that occurs when performance does not meet the standards that are set by the organization.

3
The feedback system tells the employee about the quality of his or her work performance (NCN report
HR Department’2010). Performance appraisal can enhance the benefits for the organization, but
apparently it is not delivering the benefits in many cases (John Mooney, 2009). Most of the
organizations usually include performance appraisal they cannot take the benefits from that because
there lay a huge difference between the anticipations and experiences in the present system
(Elverfeldt, 2005).
Ethio Telecom is a state owned and sole provider of telecom service in the country. The Mission of
this company is to Connect Ethiopia through state of the art telecom services, provide high quality,
innovative and affordable telecom products and services that enhance the development of the nation
and ensure high customer satisfaction (Ethiotelecom, 2020). The Federal Government of Ethiopia is to
liberalize the telecom sector by introducing telecom operators in the country. This would at least
result in telecom market competition and quality of service (BuddeComm, 2020, GlobeNewswire,
2020).
Performance appraisal is linked with individual performance and integrating with the organizational
objective to achieve expected results or goals (Sanyal and Biswas, 2014). Motivation and
performance of organization employees are essential tools for the success of that organization. The
effect of motivation of employees may not be seen in the short run rather in the long run (Dobre,
2013).
Despite this fact, ethio telecom has been criticized for poor quality of services and this would have a
long-term impact on customer satisfaction. To deal with this problem and become competent in
telecom industry employee’s motivation and satisfaction is critical (Zeleke, 2018).
In this respect, performance appraisal practice determines the effectiveness of employees in particular
and organization in general. A better process which can create emotional pressures, stress and
sometimes can adversely affect the morale and lead to lack of motivation. Some
companies may do employee evaluation because they always have. It may simply demonstrate the
completion of a supervisory exercise. Some companies may use the results of the evaluation to make
such as employment decisions, to assess the needed type of training, promotions, wage adjustments
etc (Akins, 2020).
In ethio telecom, performance appraisals have received a lot of dissatisfaction over the past several
years from its employees. Most supervisors and employees dislike the whole process. But they do

4
twice a year, because it is compulsory for bonus and annual salary increment purpose. Meanwhile, the
HR department wants this report to differentiate and giving a priority for applicants on replacement
process of the vacant posts by promotion or transfer. This paper exercises the impact of different
supervisor to make judgments about each employee under direct report to them.
Therefore, this study tries to assess the problems associated with performance appraisal practice in
ethio telecom and its impact on job satisfaction particularly on East Addis Ababa Zone (EAAZ) stuffs.
This is by considering the impact to achieve the above mentioned goal of ethio telecom and the
competition to come after the introduction of new telecom operators would be a challenge, if the job
satisfaction of its employees is not in good condition due to performance appraisal methods and other
factors (GlobeNewswire, 2020).
Due to this fact, this study attempts to contribute in filling the knowledge gap on the relationship of
unfair evaluation method and its impact on employees’ job satisfaction in ethio telecom EAAZ
workers.
1.3 Research Questions
A research question guides and centers research. It should be clear and focused, as well as synthesize
multiple sources to present unique argument. And it is not all about the entire paper but, fundamental
question that facilitates a research project, study, or review. It allows researchers to collect relevant
information that helps to narrow down the purpose of the study. Below are the basic research
questions that this study address.
• What are the factors that could critically affect managers on appraising their employees?
• How much employee performance appraisal result is objective?
• To what extent employee performance appraisal result is aligned to organizational
performance?
1.4 Objective of the study
The objective of this study is classified as general and specific ones.
1.4.1 General objective
The general objective is to examine the effect of performance evaluation on employee job
satisfaction in ethio telecom especially EAAZ staffs.

5
 1.4.2 Specific objectives
The specific objectives of this study are:
• To assess the performance evaluation practices used in ethio telecom.
• To find out if there is an impact evaluating employees using identical evaluation template for
all employees/professionals throughout the company by different appraisers.
• To find out how employees reflect on performance evaluation technique, evaluators and its
impact on job satisfaction and employee performance.
1.5 Hypotheses of the Study
This paper would focus and work to prove the below hypothesis and their relationships:
H1.Measuring employee job satisfaction on the current performance appraisal system of ethio
telecom
H2.The relationship between performance appraisal practice of the company on employees and
job satisfaction of employees is directly related.
H3.Performance appraisal practice have no impact on job satisfaction of employees
1.6 Significance of the study
The study primarily would give information about the impact of performance evaluation method by
using the same appraisal template for the same professional employees. However, the significant
relationship of performance evaluation and employee performance on the communication sector
especially on ethiotelecom. Thus, this study would add some important inputs to pinpoint vital
hypothesis to the subject. As an academic exercise, it would afford the opportunity to contribute
knowledge, improve upon this research experience and provide a basis for further research.
This research paper would also have its own share in assisting the researcher to contribute to ethio
telecom to achieve its goal and be competitive in telecom market/industry by maintaining well
satisfied and productive man power. In general, this study helps ethiotelecom and other
communication companies to review and evaluate their performance appraisal methods on the
importance of fair evaluation of employees towards the accomplishment of their company goals.
This research work would result in important findings that benefit ethiotelecom or other
communication companies. It would also show the importance of satisfied and efficient human capital
of any firm to sustain its competitive advantage achieved through the firm.

6
In this research, the researcher would try to assess the importance of satisfied employees for the
organization. It would also try to assess the importance of skilled, satisfied and motivated work force
for organizations to successfully compete in the dynamic business environment.
1.7 Scope of the study
This study is limited on the permanent employees and supervisors in ethiotelecom EAAZ only, mainly
focused on the relationship between performance appraisal practice of ethiotelecom and its impact on
employees’ job satisfaction. It is assumed a representative sample of the company that comprises all
departments and sections found in zones in Addis Ababa and regional (outside Addis Ababa) offices
or zones.
1.8 Limitations of the study
The main limitation of this study is the sample size of the population of interest. The sample size may
be small compared to the size of the company. It is only considering the East Addis Ababa Zone and
doesn’t consider regional zones mainly due to time constraint and other factors. Additionally, sample
selection would focus only on sales, HR, facility and a technical team like FAN/ OAM.
1.9 Organization of the Paper
This research paper is organized in five chapters. Chapter one contains overall background of the
research, why it is important to make the research, its significance, boundaries of the study, and scope
of the study. Chapter two contains the relevant literatures that have value to the study. Chapter three
will contain the research design and method used to conduct this research mainly data source, data
collection tools, population, sample size and sampling techniques. Chapter four comprise data
analysis, interpretation and discussions. Chapter five comprise findings, conclusion and
recommendation including summary of findings derived from data analysis.

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 CHAPTER TWO
LITERATURE REVIEW

INTRODUCTION
This chapter contains concepts of The Effect of Performance Appraisal Practice on Employee Job
Satisfaction and theories of job Performance In addition, based on previous literatures, the conceptual
framework of the study together with the hypothesis is formulated.
2.1 Theoretical Literature
2.1.1 Performance Appraisal
Performance appraisal is systematic evaluation of the performance of an employee by his/her
superiors. Generally, appraisal is made by the supervisor or manager once a year (Joshi, 2013). 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 Appraisal and its’
multiple uses. Different scholars defined performance appraisal differently as per the philosophy they
follow and trust. I would try to discuss some of them in the upcoming paragraphs following the formal
definition below: “Performance Appraisal is the process of evaluating the performance and
qualification of the employees in terms of the requirements of the job for which he is employed, for
the purpose of administration including placement, selection for promotion, providing financial
rewards and other actions which require differential treatment among the members of a group as
distinguished from actions affecting all members equally.” (YourArticleLibrary, 2020)
Beach has defined performance appraisal as follows:
“Performance Appraisal is the systematic evaluation of the individual with regard to his or her
performance on the job and his potential for development.” Additionally, “Performance appraisal” is a
process of evaluating an employee’s performance of job in terms of its requirements. It is the process
of evaluating the performance and qualifications for purposes of administration including placement,
selection for promotions, providing financial rewards and other actions, which require differential
treatment among the members of a group as distinguished from actions affecting all members equally
(YourArticleLibrary, 2020) “Performance-appraisal is the process of evaluating the performance and
qualifications of the employees in terms of the requirements of the job for which he is employed, for
purposes of administration including placement, selection for promotions, providing financial rewards

8
and other actions which require differential treatment among the members of a group as distinguished
from actions affecting all members equally.”(Gachengo and Wekesa, 2017)
As stated by (Batra, 2014), performance appraisal incorporates all formal procedures used to evaluate
personalities and contributions and potentials of group members in an organization. It is a recurring
process to secure information necessary for making correct and objective decisions on employees.
Performance Appraisal is the process through which an individual employee’s behavior and
accomplishments for a fixed time period are measured and evaluated, normally including both the
quantitative and qualitative aspects of job performance (Chowdhury, 2014).
2.1.2 Performance appraisal and its’ multiple uses
Performance is the outcome of work, but it has different dimensions based on different bases. To
measure and control the individual performance and thus integrating it to the organizational objective
to achieve expected results is certainly performance appraisal. The strategic goal of the organization
depends on individual performance through the interaction between three interlinked levels namely
Organizational, Process, and Job. The administrative rationales are exercised based on appraisal report
are salary administration, promotion, retention or discharge. The evaluative purpose encompasses
increment decisions, incentives, bonuses, and in long term promotion decisions, identification of poor
performers, determination of termination, lay-off (Snell et al., 2010). The development purpose of
appraisal includes identification of strength and weaknesses and providing feedback, thus identifying
the developmental need of individual, personnel research. Discussion about salaries, during appraisal
session contradicts and restrain the identification of developmental issues. Criteria helps rather to find
out the differences in job - role behavior among the employees and provides the basis of feedback.
The Criteria provide parameter on which employees’ performance would be measured. The
measurement of job performance provides bases for effective job design and to identify training need,
and many other personnel – related actions and interventions. Employee motivation and engagement
has always been a major concern for the research. Scope for mutual goal setting, self-evaluation,
multisource feedback, and motivates employee for better performance and improved productivity.
Lance & Bannett,(Lance and Bennett, 2000), modified the model of Hunter, which examined a causal
relation between job knowledge, task proficiency and supervisory rating, and established a relational
model between Achievement orientation, personal ability, dependability, job knowledge, awards, task
proficiency, disciplinary action and finally to supervisory rating. The renowned two factor theory of
Herzberg; (Herzberg et al., 2009) established the Hygiene factors and motivators influencing better

9
employee performance. Perceived appraisal accuracy by the employees is related to the system and
process facets through the interaction of social and contextual performances. An exploratory model
designed by (Marcoulides and Heck, 1993), established the relationship between organizational
structure/ purpose, organizational values, task organization, organizational climate, worker attitude
and the goal of organizational performance. (Patterson et al., 2005), identified the organizational
climate dimension variables employee welfare, autonomy, participation, communication, emphasis on
training, integration, supervisory support involvement, formalization, innovation and flexibility,
Reflexivity, clarity of organizational goals, efficiency, effort, performance feedback to managerial
practices productivity and innovation. Trust is the willingness to be exposed to the action of another
party. Finally established positive relationship between trust for management and performance
appraisal (Sanyal and Biswas, 2014).
2,1,3 Employee evaluation
An employee evaluation is the assessment and review of a worker’s job performance. Most companies
have an employee evaluation system where in employees are evaluated on a regular basis, usually
once in a year (Smith et al., 2003).
In many organizations with a formal employee evaluation process, employees are ranked and rated in
comparison to other employees. Raises are assigned based on both the assessment ranking and the
rating - usually 1-5 - that the manager assigns to the employee's performance. Additionally, some
organizations determine, in advance, the percentage of employees whom you can rank, 1, 2, 3, 4, and
5. In many organizations with a formal employee evaluation process, employees are ranked and rated
in comparison to other employees (Heathfield, 2006, Manolescu and Abrudan, 2010).
2.1.3 Self-evaluations
Self-evaluation is often critical to your good performance rating. Managers cannot possibly know
everything you do every day. So a well-written self-evaluation with successes and complex projects
listed can inform, or remind, your manager about the goals you've accomplished and the contributions
you've made during the year.
2.1.4 Performance Appraisal Methods
Performance can be appraised by a wide variety of methods and techniques. The most used
performance appraisal methods can be distinguished into four major Categories: comparative
appraisals, behavioral appraisals, output-based and Rapid Appraisals. Managers directly compare the
performance of their subordinates against one another in comparative appraisals.

10
Ranking: In this method, the supervisor lists all subordinates in order, from the highest to the lowest in
performance.
Paired Comparisons: This method involves comparing each employee to every other employee in the
rating group, one at a time to determine the better.
In contrast with comparative appraisals, behavioral appraisals allow supervisors to evaluate each
person's performance independent of other employees but relative to important job-related behaviors,
which when exhibited can lead to job success, namely: the graphic rating scale and checklist. Some
managers are required to provide written appraisal information - in a narrative form. These records
describe an employee's actions rather than indicating an actual rating.
The comparative and behavioral appraisal methods described above focus on job behaviors or
processes, output-based appraisals focus on job products as the primary criteria. The most commonly
used output-based appraisal is Management-by-Objectives (MBO). For organization to be effective,
employees must clearly understand the objective of his/her organization. Management must provide
opportunities for every employee to make contribution in the attainment of objectives. This is possible
through a system of establishing objectives known as management by objectives (MBO). MBO,
therefore, is defined as follows: A process whereby the superior and subordinate managers of an
organization jointly identify for attaining their organization objective(s) (Baird and Thomas, 1990).
Rapid appraisal methods are quick, low-cost ways to gather data systematically in support of
managers' information needs, especially questions about performance.
When the best method for evaluation is chosen, the following considerations should be considered:
Appraisal methods are discussed by Armstrong (Armstrong, 2009), must be simple and easily
understandable for all people in the organization. Characteristics of the work, employees and the type
of the organization have an influence on the way of determining the best method.
Each method of performance appraisal has its strengths and weaknesses may be suitable for one
organization and non-suitable for another one. As such, there is no single appraisal method accepted
and used by all organizations to measure their employees’ perfor­mance. All the methods of appraisal
devised so far have been classified differently by different authors. While DeCenzo and Robbins’
have classified appraisal methods into three categories: absolute meth-ods, relative methods and
objective methods (DeCenzo et al., 2016).
A more widely used classification of appraisal methods into two categories, as traditional methods and
modem methods. While traditional methods lay emphasis on the rating of the individual’s personality

11
traits, such as initiative, dependability, drive creativity, integrity, intelligence, leadership potential,
etc.; the modem methods, on the other hand, place more emphasis on the evaluation of work results,
i.e., job achievements than the personal traits. Modem methods tend to be more objective and
worthwhile (Rajitha et al., 2019).
2.1.5 Benefits of the Performance Appraisal
Managers perform evaluations to benefit both employees and the employer. The most significant
benefit of the appraisal system for the manager or the head of department is to achieve organizational
objective and employee satisfaction. Performance appraisal system is a useful management tool which
helps to gain feedback, review and estimate whether the performance is effective and discuss what
needs to be done for further improvement. Out of the benefits of the performance appraisal system is:
✓ Motivates employees if supported by a good merit-based compensation system.
✓ Helps for management to identify the successes or under Performers for discussions,
identify problems, clarify expectations and plan for the future.
✓ Deciding about the promotions, transfers and rewards of employees
The statistics can be used to monitor the success of the organization’s recruitment and induction
practices.
2.1.6 Responsible Body to Conduct Performance Appraisal
Performance Appraisal is the most significant activity of an organization. If the right persons are not
assigned to process Performance Appraisal activities, then the strategic objectives of organization is
seriously affected (Mishra and Mohapatra, 2010). Additionally, Mathis and Jackson (Mathis and
Jackson, 1997), also wrote as performance appraisal can be done by any one of familiar with the
performance of individual employees. Possibilities are including the following.
• Supervisors who rate their employees
• Employee who rates their supervisors
• Team members who rate each other
• Outsider sources
• Employee self-appraisals
• Multi-score (3600) appraisal

12
2.1.7 Performance Appraisal Criteria
Performance usually requires more than one dimension. If the performance criteria leave out some
important job duties, they are deficient. If some irrelevant criteria are included in the criteria, the
criteria are said to be contaminated. According to Armstrong (Armstrong, 2009), the criteria for
reviewing performance should be balanced between achievements in relation to 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. As Mathis and Jackson (Mathis and Jackson, 1997)
stressed, performance criteria are standards commonly used for testing or measuring performances.
Criteria for evaluating job performances can be classified as trait-based, behavioral based, or results
based.
Trait based measure identifies a subjective Character trait such as “agreeable personality”,
“initiative,” or “creativity and has little to do with the specific job. Such traits tend to be ambiguous,
and courts have held that evaluation based on traits such as “adaptability” and general performance”
are two unclear to use as the basis for performance-based HR-decisions.
Behavior-based measure: focus on specific behaviors that lead to job success.
Results-based measure: look at what the employee has done or accomplished. For some jobs where
measurement is easy and appropriate, a results-based approach works very well.
Generally, criteria are relevant when they measure employees on the most important aspects of their
jobs. But there are also problems with these criteria. Mathis and Jackson (Mathis and Jackson, 1997)
again said, jobs usually include many duties and tasks, and so measuring criteria for measuring
performance much more than they should.
2.1.8 Performance criteria and impact
Performance criteria are standards for employee behavior at work. This criterion contains much more
than how an employee does the work. Employees are rated on how well they do their jobs compared
with a set of standards determined by the employer (Mahmood et al., 2014).
If a company chooses faulty criteria to evaluate its workers, it can render a performance management
system worthless or even pose a danger to an organization’s strategies. Criteria that don’t accurately
measure true productivity. And criteria that allow workers to game the system allow unethical
workers to take advantage of the organization. Worker morale can suffer under a performance
management system, especially if unethical employees claim the lion’s share of the rewards. If a
13
business has a finite number of promotional opportunities and a specific number of employees who
would need corrective action based on the company's ratings system, workers might start to focus
more on where they stand in that hierarchy rather than on their job-related duties. Another problem is
that a performance management system might discourage free thinking. If employees fixate on
achieving production numbers, for instance, they might not approach problems creatively or risk
novel solutions. Failing to consider employee initiative in favor of raw numbers may mean a more
inefficiently-run business as your workers focus on what you measure instead of what you need
(Bhattacharyya, 2011).
2.1.9 Pros and cons of performance appraisal
During the appraisal process, you may discover that the employee holds a specific skill or has an
interest in an important aspect of your business such as marketing or management. As a result, you
may be able to reassign the employee to a role where he offers more value to your business. A
possible disadvantage of performance appraisals is that they use up expensive time. You'll need to
take the time to prepare for the appraisal as well as conduct it. It also means downtime for your
employees, resulting in lost productivity. To conduct a fair and accurate performance appraisal, you'll
need to keep accurate records and documentation throughout the appraisal period. If you're not in the
habit of making notes when an event occurs, it can be easy to forget about the incident or record it at a
later time when your memory isn't as fresh. As a result, you may judge your employees unfairly
(Aggarwal and Thakur, 2013, Nickols, 2007).
A disadvantage of the performance appraisal is that you and your employee may have a different
interpretation of the appraisal's outcome. What you perceive as a chance to point out areas for
improvement may instead result in your employee feeling that the appraisal was nothing more than a
"chewing out" session, causing reduced morale (Chism, 2007).
2.1.10 The Performance Appraisal Process
The performance appraisal process is construed as a function of 3 interacting systems: organizational
context, the appraiser's information processing system, and the behavioral system of the appraise
(Ilgen and Feldman, 1983)
2.1.11 Performance Management and Performance Appraisal
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 by understanding and managing employee performance within an agreed framework of

14
planned goals, standards and competency requirements (Armstrong, 2009). It includes any
management activity aimed at improving performance through training and developing employees,
establishing performance standards, appraising performance, setting performance plan, and through
managing career mobility (Matheny, 2003). According to Armstrong (2006) this PM processes exist
for establishing shared understanding about what is to be achieved, and for managing and developing
2.1.12 Establish Performance Standards
According to (Leonard, 2019), performance standards are not arbitrary. These standards are necessary
with each job position, because the performance standards are used to fulfill the mission and vision of
the company. Performance standards are established through job descriptions, employee handbooks
and operational manuals. Standards are subject to adjustment, based on changes in business needs.
2.1.13 Employee Communication
Establishing performance standards is not enough. Business leadership must clearly communicate
these standards to employees. Even though standards are written and distributed in company manuals,
there also should be a specific on boarding process that summarizes the company's expectations.
Regular meetings’ reviewing the standards and expectations repeats to employees that everybody
must meet certain minimum requirements to recall employment or to be eligible for raises or
promotions (Leonard, 2019).
2.1.14 Measure Employee Performance
Clearly defined standards are easy to measure. Leaders track and regularly review how employees are
performing. Attendance might be reviewed weekly when the schedules are made. Business leaders
need to determine how often different performance standards are reviewed, based on how it affects
business achievement (Leonard, 2019) .
2.1.15 Compare to all Employee Metrics
Employers usually set performance standards, based on experience and industry data. Every business
and its employees are unique. However, comparing one employee against all others who perform the
same tasks gives an employer an idea about whether or not the underlying issue is the employee or if
it's a bigger issue of training or operations obstacles (Leonard, 2019).
2.1.16 Employee Feedback
Performance appraisals must be reviewed with employees to be effective. Sit down with each
employee to review the standard expectations and provide feedback about what has been done well
and what areas need improvement. Make sure all feedback is written in objective terms and speak to
employees in a professional, positive manner. Use performance review meetings to not only give
15
employees feedback but also to gather feedback from employees about personal performance,
professional goals and feedback on company protocol (Leonard, 2019) .
2.1.17 Action Plan Development
Set an action plan for future performance appraisals. Build bigger goals around areas of employee
success and provide specific plans of action where improvement is needed. Get employees invested in
growth by asking them to include personal expectations and goals as part of the development plan.
Have employees sign the plan, and to accept its contents, including agreeing to the action plans. Once
signed, make a copy for the employee and make another for the human resources file (Leonard, 2019).
2.2 Conceptual Framework
As different literatures suggest performance appraisal is directly related with job satisfaction of
employees of companies established for profit or non-profit. The below conceptual framework is
considered as conceptual framework of this study.

Source: Conceptual framework Adopted from (Denison, 1990)

Figure 1: Conceptual Framework of the study

16
 CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
This chapter gives brief and precise explanation about the methodologies tools that the researcher was
used to accomplish the study there by achieving the objectives. The chapter organized as follows,
research approach, research design, population and sampling, data source and type, data
collection procedure, ethical consideration, and analyses of data .
3.1 Research Design
A research design is the arrangement of conditions for collection and analysis of data in a manner that
aims to combine relevance to the research purpose with economy in procedure. In fact, the research
design is the conceptual structure within which research is conducted; it constitutes the blueprint for
the collection, measurement and analysis of data (Kothari, 2004).
3.2 Research Approach
The study would be a Descriptive research approach to collect numerical data that can be analyzed
statistically. This is well-suited for assessing employee job performance, performance ratings, and
relationships between variables. Some qualitative aspects, such as employee perceptions and
feedback, may be included through open-ended survey questions to gain deeper insights into the
experiences and attitudes of employees regarding performance appraisals.
According to Kothari (2004), Descriptive research includes surveys and fact-finding enquiries of
different kinds. The major purpose of descriptive research is description of the situation as it exists at
present. The main purpose of such studies is that of formulating a problem for more precise
investigation or of developing the working hypotheses from an operational point of view (Kothari,
2004). The quantitative approach involves the generation of data in quantitative form which can be
subjected to rigorous quantitative analysis in a formal and rigid fashion. Quantitative research is based
on the measurement of quantity or amount. It is applicable to phenomena that can be expressed in
terms of quantity (Kothari, 2004).To this end the Quantitative research chosen to obtain quantitative
viewpoint of analysis and inference techniques on the effect of performance appraisal on
employees‟ motivation.

17
3.3 Population size
The target populations of this study were the employees of Ethiotelecom at East Addis Ababa Zone.
Ethio Telecom is one of the largest company Ethiopia and employees working all over office found
in Ethio-Telecom and consists of Five zonal offices in Addis Ababa. The population sampling
frame would be obtained from all of six zonal offices found in Addis Ababa which have 236
employees.
3.4 Sample size and sampling Techniques

The researcher would use Simple Random sampling technique to study this research in which
selecting of a sample that provides all members of the group or target population to have an equal and
independent chance of being selected for the sample for both the supervisors and employees of the
organization.
3.4.1 Sample size determination
According to EMI employees address identification printing book on June 2015 E.C. 2377 employees
and Time lieder are working in head office, Addis Ababa. According to Magenta and Magenta (2003),
it’s impossible to study the whole targeted Population and therefore the researcher must decide on a
sampled population.
3.5 Sources of Data
The sources of data for the study would be both primary and secondary. Regarding the primary
source, data would be collected for eighty-two employees out of two hundred thirty six as a purposive
sample from the EAAZ offices of ethio telecom holding different job roles including 3 managers, 5
supervisors, and 64 professional through questionnaire. Moreover, secondary data would be gathered
from relevant documents such as articles, journals, published and unpublished theoretical literatures
and empirical studies.
3.5.1 Population and Sampling Procedure
3.5.2 Population
The total population size of the study is 236 comprised from HR, FAN, OAM, and Sales team. The
population includes not only staffs but also managers and supervisors. The gender mix of the total
population is 164 male and 72 female.

18
 Section Male Female Total Sample Size
Population size Selected
HR 2 7 9 9

FAN/OAM 97 23 120 40

Sales Team 50 35 85 25

Managers 6 3 9 3

Supervisors 9 4 13 5

Total 164 72 236 82

Table 3:1: Population and Sample size of North Addis Ababa zone office of ethio telecom

3.5.3 Sample Size

The total sample size involved in this study was 82 employees from the six zonal offices as depicted
in Table 1 in detail. Due to non-response, the researcher managed to collect 80 responses from the
total of 100 questionnaires distributed to respondents. This makes total population of East Addis
Ababa zone office employees.
3.5.4 Sampling Techniques
The departments and sections in EAAZ are considered as strata and from each stratum random
sampling technique is used to select 80 respondents for the study.
3.6 Data Collection Instruments and Procedures
The data for this study is collected from both primary and secondary sources. As a primary source,
questionnaires are used and due to the spread of the pandemic COVID-19, the researcher used free
online survey methods like Lime survey website. The online method helped to reach staffs working
from home due to the pandemic. The questionnaire is a close ended type. Before distributing the
questionnaire, to determine the quality and reliability of the questionnaire, the researcher distributed
the questionnaire as a sample to get comments on the questionnaire. The researcher collected the
feedback in person and to elaborate the part of the questionnaire if there is any unclear idea or
statement. The questionnaire is structured with close ended type. Accordingly, 5-point likert scale
items were prepared for respondents because it is helpful for the researcher to know the respondents
feelings. In addition to this, the questionnaire is employed to express their feelings, perceptions,

19
problems related to performance appraisal practices in the organization. The questionnaire has six
parts to obtain the necessary information about the purposes, processes, criteria, employee attitude
toward the rater, personal improvement and organizational development In this research design,
performance appraisal dimensions including understanding the purpose of performance appraisal ,
process and procedures, appraisal criteria, employee attitude toward the rater were treated as
independent variable where as personal improvement and job satisfaction as an dependent variable.
3.7 Methods of Data Processing and Analysis
The researcher would use to collect quantitative data from sample respondents. As a result, both
descriptive and inferential statistical tools would be used using Statistical Package for Social Science
(SPPS). The data would be collected through close ended questionnaires is tabulated. The
interpretation would be made with the help of frequency and percentage. Inferential statistics mainly
correlation coefficient would be used to measure the strength of relationships between performance
appraisal variables with personal improvement and organizational development. Accordingly,
regarding the independent & dependent variables of the study, the model of this study; is:

3.8. Validity and Reliability

3.8.1. Validity
Validity is defined as the extent to which the instrument measures what it purports to measure
(Miller.n.d, 2000). Therefor to make sure the validity of research instrument, the questionnaires
was adapted from previous researchers. Plus was pre tested in 20 of the employees that are in
Addis Ababa. The findings of the study and lessons learnt is incorporated in the
questionnaire and used to redesign and improve the data collection
instruments.
3.8.2. Reliability
According to Miller.n.d (2000) reliability is defined as the extent to which a questionnaire, test,
observation or any measurement procedure produces the same results on repeated trials. Therefore, in
terms of reliability the questionnaire was checked for consistency basing on Cronbach’s alpha and
meet the acceptable level for attitude 0.7 and above as seen on the below table.

Table 3.2: Instrument reliability test

No. Items Cronbach's Alpha N of Items

PA- interpersonal .745 5

1
factors
20
 2 PA-Objective setting .742 5

3 PA-Rater Accuracy .703 5

4 PA- Recognition .733 5

5 PA-Employee .745 5
Performance
Source: Own survey, 2024
3.9. Ethical considerations
Any researcher has an obligation to conduct themselves ethically and honestly throughout the study
process. The researcher requests permission from the appropriate offices to conduct research to ensure
compliance with ethical issues. Also, special attention was paid to reassuring the respondents that all
information would be treated in confidence.
The researcher enumerates on how privacy and confidentiality concerns are approached and was
sensitive to not only how information is protected from unauthorized access, but also if and how
participants are going to be notified of any unforeseen findings from the research that they are not
meant to know. The data collected was kept on a personal computer with a pass word and was only
accessible by the researcher. To give a clarity of the idea all the necessary information regarding
ethical issues in seeking consent, avoiding deception, maintaining confidentiality, respecting the
privacy, and protecting the anonymity of all respondents was stated on the questioner. The purpose of
the study would also be stated well to make participants respond with their own consent.

21
 CHAPTER FOUR
RESULTS AND DISCUSSION
In this chapter all the findings on performance appraisal practice on employees’ job satisfaction
are presented and discussions are also made on the results from the respondents. The research
mainly focused on the effect performance appraisal system of ethio telecom in relation to job
satisfaction.
4.1 Response Rate of Respondents
Out of 90 questionnaires distributed to respondents found in EAAZ offices of ethio telecom 80
(89%) of them are returned on time, which is adequate for the survey.
4.2 Demographic Characteristics of Respondents
The demographic characteristics of the respondents is presented in the table below that comprises
of Gender, Age, Educational background, Work experience, and Current position of respondents
in the company, ethio telecom.
Table 3.2: Instrument reliability test
SN Variable Category Frequency Percentage
Male 61 76.25%
1 Gender
Female 19 23.75%
Below 25 8 10.00%
25 - 35 25 31.25%
2 Age 35-45 28 35.00%
45-55 10 12.50%
Above 55 9 11.25%
Certificate 5 6.25%
Diploma 8 10.00%
3 Educational background
Degree 65 81.25%
Masters and above 2 2.50%
Below 2 3 3.75%
2-4 10 12.50%
Work experience of
4 4-6 15 18.75%
respondents
8 - 10 20 25.00%
>10 32 40.00%
Analyst 15 18.75%
Current position Specialist 55 68.75%
5 respondents in the
Supervisor/Coordinator 4 5.00%
company
Expert 1 1.25%
22
SN Variable Category Frequency Percentage
Manager 4 5.00%
Director 1 1.25%
Source: Own survey 2020
As shown in table 4.1 the demographic characteristics of ethio telecom employee regarding sex, age,
qualification, and year of service. As a result, regarding gender distribution of employees 76.25% are
males and the remaining 23.75 % are females. Concerning the age of respondent, 35% are between
age 35 and 45 years of age, 31.25% of respondents are between age 25 and 35, the third age group is
between 45 and 55 years of age 12.5%, above age 55 is 11.25% and the rest 10% are below 25 years.
Most of the employees are between age groups of 25 to 45 years of age which accounted for 66.25%,
the age groups above 45 are 23.75%. This shows they are matured enough to provide the researcher
with all the necessary information.
In relation to educational background of respondents, the majorities 81.25% have first degree, 10%
have diploma, 8% have certificate and the remaining 1.75% have master’s degree. Therefore, it is
possible to conclude that the information obtained from them can be considered as reliable and
reasonable due to their academic background. Regarding the work experience, most employees
43.75% are between 4 and 10 years of experience, while 40% are above 10 years and the remaining
12.25% are below 4 years. This indicates that such employees with ample years of service in the
company are experienced enough to reply to the various issues raised concerning performance
appraisal practice in ethio telecom. Concerning positions of respondents in ethio telecom, director is
assumed to be highest position in zonal offices, followed by managers, experts, and supervisors. Both
supervisors and experts are directly responsible for managers. But the highest position in the company
is CEO followed by CxOs, where x represents different departments, like chief human resource
officer (CHRO). Around 87.5 percent of respondents are specialists and analysts, 10 of respondents
are managers and supervisors, and the remaining 2.5 percent are experts and directors. This tells that
most of the respondents are operation level workers evaluated by supervisors. It tells also that the
respondents are representative enough to show the effect of performance appraisal practice on job
satisfaction.

23
4.3 Descriptive analysis of performance appraisal and employees' job satisfaction
To gain insight on the general perception of the respondents regarding selected performance appraisal
practices and employee job satisfaction, the below result is obtained from the total of 80
questionnaires collected from respondents. Table 4.2 below presents summarized responses from the
total of 43 questions in the questionnaire but the detail response for each question is found in Annex I.
For instance, about understanding the purpose of performance appraisal in ethio telecom has 4
questions, under performance appraisal procedure and process has 6 questions, under
standards/criteria of performance appraisal has 4 questions, under employee attitude toward the rater
there are 4 questions, and it continues in similar fashion.
Table 4.2 Summarized descriptive analysis response on performance appraisal and employee job

satisfaction

Table 4.1 Summarized descriptive analysis

Ratings Total
SN Description
SA A N DA SDA Frequency
Understanding the purpose of 1.88% 33.75% 20.00% 44.38% 0.00%
1 performance appraisal in ethio
telecom
Performance appraisal 12.29% 48.33% 31.04% 7.71% 0.63%
2
procedure and process
Standards/ criteria of 22.81% 43.13% 14.06% 20.00% 0.00%
3
performance appraisal
Employee attitude toward the 1.88% 51.56% 29.38% 17.19% 0.00%
4
rater
Individual /Personal 22.00% 46.75% 21.75% 9.50% 0.00%
5
Improvement
ways of employee’s appeal 35.63% 14.38% 27.50% 22.50% 0.00%
6
towards performance rating
Participation in appraising 21.00% 35.00% 20.50% 23.50% 0.00%
7
employees’ performance
8 Job satisfaction 7.50% 24.22% 28.44% 21.41% 18.44%

Source: Own survey, 2024

24
Regarding the response item “Understanding the purpose of performance appraisal in ethio telecom”,
six questions were asked 44.38 percent disagree, 33.75 percent agree, 20 percent neutral, and the rest
1.88 percent strongly agree. This shows that at least more than 44 percent of the staffs are not clear
about the purpose of performance appraisal system in the company and additionally 20 percent are not
sure about the purpose of it.
Performance appraisal procedure and process is the next part of the questionnaire with six questions
and the summarized response shows 48.33 percent agreed, 31.04 percent are indifferent, 12.29 percent
strongly agree, and the rest 8.34 percent of respondents disagree and strongly disagree. This indicates
that the 31.04 percent of respondents that are neutral and the 8.34 percent of respondents that
disagreed to know the process and procedure are significant figures that need awareness on the subject
matter. The human resource department need to device ways to address this group of staffs about the
appraisal process and procedure.
Concerning the response on Standards/ criteria of performance appraisal, four questions were
presented for respondents. As summarized in Table 4.2 most respondents agree 43.13 percent, 22.81
percent strongly agree, 14.06 percent neutral and the remaining 20 percent disagree. About 34 percent
of the respondents are neutral and disagree to know the standard or criteria of performance appraisal
system of the company. This may show that an effort needs to be made by human resource
division/department to address the reason behind being indifferent about criteria/standards of
performance appraisal. One of the reasons could be lack of awareness but this can be addressed by
internal training department. All employees should have clear understanding about the standard or
criteria of performance appraisal system of ethio telecom.
Concerning the “employee attitude toward the rater” four questions were asked, and the average
response from 80 respondents show that more than 53 percent have positive attitude about the rater. A
little more than 29 percent are neutral, and 17.19 percent disagree or do not have positive attitude
about the rater. Even if majority of the respondent have positive attitude about the rater, more than 46
percent are not happy about their rater. No matter how accurate the performance appraisal instrument
is there must be qualified raters with necessary knowledge, skill, ability, and experience to rate their
subordinate. This is one of the major factors that can determine satisfaction towards the performance
appraisal system and can affect the job satisfaction of employees. From the information given by
human resources department the immediate supervisor is responsible to rate the performance of
employees.

25
The response for “individual /personal improvement” summary shows that 46.75 percent of the
respondents agree, 22 percent strongly agree, 21.75 percent neutral, and the remaining 9.5 percent
goes for disagree. As indicated in the summary above 68 percent of the respondents agree about
individual or personal improvement plan of ethio telecom and about 21.75 percent of them are
indifferent. This shows that most employees are satisfied about individual improvement plan of the
company, but 31 percent (total of 21.75 neutral and 9.5 disagree) of the respondents are either
disagree or not sure about his/her position if he/she continues working with the company. Due to the
government position about introducing new operators in the country, this might be a challenge for
ethio telecom to achieve its goal. This may indicate that there is a possibility of employee turnover
after the arrival of the new operators.
The other group of question that was forwarded for respondents was “on ways of employee’s appeal
towards performance rating”, respondents were given two questions. From the summary on table 4.2,
we can see most of the respondents agreed for the question, “if they have ways to appeal to a
performance rating they think it is biased or inaccurate” and “if they can challenge if they think the
performance appraisal results is biased or inaccurate”. The average result shows that 35.63 percent
strongly agreed, 14.38 percent agreed, 27.5 percent was neutral, and the remaining 2.5 percent
disagree. This result shows that even if employees know that they can appeal and challenge unfair
performance appraisal rating they are not that much confident about the performance appraisal result
change. So, after rating and communicating the result employees might not be happy with the result
they obtained when this kind of situations occurs, they can only appeal their reservations. The
summary shows about 30 percent of the respondents are either not sure or believe that they cannot
change the performance appraisal result given. As this is one source of employee job satisfaction
factor, the company needs to take proper and planned action to win the 30 percent employees in the
EAAZ zone or to avoid this problem.
In relation to “participation in appraising employees’ performance”, five questions were presented for
respondents. The average response shows that 56 percent of the respondents strongly agree (21) and
agree (35) that immediate supervisors are responsible to performance appraisal. From the
questionnaire respondents, we can understand that performance appraisal among peers is not widely
practiced in Ethio Telecom. The response shows 20.5 percent neutral and the rest 23.5 disagree that
performance appraisal among peers is practiced. The response also shows that there is no consistency
on way of implementing performance appraisal system. It tells us that some supervisors or immediate

26
managers use participatory performance appraisal system and others use a different one. It is better or
advised to use a consistent way of appraisal system in the company, to avoid employees complain or
dissatisfaction because of this inconsistency.
Concerning the questions related to “job satisfactions”, a total of eight questions were asked to
evaluate the satisfaction level of employee’s job satisfaction. The summarized response shows that
28.44 percent of respondents are neutral, 24.22 percent agree, 21.44 percent disagree, 18.44 percent
strongly disagree, and the remaining 7.5 percent are strongly agreed. 31.72 percent of the respondents
responded as satisfied and strongly satisfied. But about 68 percent of the respondents expressed their
job satisfaction level as either neutral or not satisfied (39.85 percent). Even if the position of
respondents as neutral falls between satisfied and unsatisfied or considered as undecided, much work
needs to be done to bring these staffs to feel satisfied with their job. But more than 39 percent or close
to 40 percent of respondents clearly indicated as not satisfied. This is a very big figure in any
company leave alone in telecom industry that awaits competition in the years to come. A planned
action needs to be done to change and improve this group of staffs to satisfaction level.
4.4 Performance appraisal and job satisfaction relationship analysis
Correlation analysis is used to measure the existence, direction, and degree of linear association
between performance appraisal practice and job satisfaction of employees. Correlation is a measure of
association between variables under study. Positive values of r indicate positive or direct correlation
between the two variables (i.e., changes in both variables take place in the stated direction), whereas
negative values of “r‟ indicate negative correlation i.e., changes in the two variables taking place in
the opposite directions. A zero value of “r‟ indicates that there is no association between the two
variables (Kothari, 2004).
When r = (+) 1, it indicates perfect positive correlation and when it is (–) 1, it indicates perfect
negative correlation. In the same way, Cohen (1998) cited by (Warokka et al. 2012), also interpreted
the coefficient of correlation between 0 and 1 as in the following manner. The correlation coefficient
(r) ranging from 0.10 to 0.29 may be regarded as indicating a low degree of correlation, r ranging
from 0.30 to 0.49 may be considered as a moderate degree of correlation, and r ranging from 0.50 to
1.00 may be regarded as a high degree of correlation. In this study determines the strengths of
relationship between variables of Performance appraisal and job satisfaction. As shown in the table
below most of the performance appraisal parameters correlate in a significant manner.

27
 Table 4.3 Correlation Analysis

Job Satisfaction
Pearson
0.944
Understanding the purpose of Correlation
performance appraisal Sig. (2-tailed) 0.000
N 80
Pearson
0.984
Performance appraisal procedure and Correlation
process Sig. (2-tailed) 0.000
N 80
Pearson
0.94
Standards/ criteria of performance Correlation
appraisal Sig. (2-tailed) 0.000
N 80
Pearson
0.966
Correlation
Employee attitude toward the rater Sig. (2-tailed) 0.000
N 80
Pearson
0.982
Correlation
Individual /Personal Improvement Sig. (2-tailed) 0.000
N 80
Pearson
0.356
ways of employees appeal towards Correlation
Performance Appraisal Sig. (2-tailed) 0.001
N 80
Pearson
0.976
Participation in appraising employees Correlation
performance Sig. (2-tailed) 0
N 80
Pearson
1
Correlation
Job Satisfaction Sig. (2-tailed)
N 80
*. Correlation is significant at the 0.05 level (2-tailed).

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

The correlation results presented in Table shows that there is high degree of relationship between
performance appraisal variables and job satisfaction:
28
• Understanding the purpose of performance appraisal and job satisfaction have significant
relationship as r= .944 and sig = .000
• Performance appraisal procedure and process and job satisfaction have significant relationship
as r= .984and sig = .000
• Standards/ criteria of performance appraisal and job satisfaction have significant relationship
as r= .940 and sig = .000
• Employee attitude toward the rater and job satisfaction have significant relationship as r= .966
and sig = .000
• Individual /Personal Improvement and job satisfaction have significant relationship as r= .982
and sig = .000
• ways of employee’s appeal towards Performance Appraisal and job satisfaction have
significant relationship as r= .356 and sig = .001
• Participation in appraising employees’ performance and job satisfaction have significant
relationship as r= .976 and sig = .000

From the correlation analysis it is found that performance appraisal practice is positively
correlation with job satisfaction. As an exception, ways of employee’s appeal towards
performance appraisal result have moderate degree of correlation with job satisfaction.
The correlation result indicates that job satisfaction is strongly correlated with performance
appraisal practice. As it is clearly seen from the correlation result performance appraisal
procedure and process, standards or criteria of performance appraisal, its contribution to
individual or personal improvement, understanding the purpose of performance appraisal,
employee attitude toward the rater, and participation in appraising employee’s performance have
strong correlation with job satisfaction. On the contrary, the correlation result shows that
knowing ways of employee’s appeal towards performance appraisal have weak correlation on
job satisfaction.
Regarding knowing ways of employee’s appeal towards performance appraisal, as the result
indicate weak relationship specifically as it serves to see the satisfaction of employees when
complaining on performance result. Lack of such satisfaction could result on importance of
appeal on results. As a result, employees may lose hope and refrain from appealing. Such issues
should be managed in time with human resource and training departments of ethio telecom,
specifically EAAZ zone of the company.
29
Additionally, employee attitude toward the rater another dimension that correlates with job
satisfaction of employees are like appraiser lacks training. This also aligns with the descriptive
analysis that most respondents agree with it.
4.2 Regression Analysis Results
Regression analysis is used to measure the relative strength of independent variables on dependent
variable. The below tables show the result of regression between the major components of
performance appraisal practices and job satisfaction.
Table 4.4 Model Summary
Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .991a .982 .981 .314586
2 .000b .000 .000 2.257287
a. Predictors: (Constant), Participation in appraising employees’ performance, Standards/ criteria of
performance appraisal, Understanding the purpose of PA, Employee attitude toward the rater,
Performance appraisal procedure and process
b. Predictor: (constant)
The model summary in the above table shows that the adjusted R square .981 is the degree of
association between components performance appraisal practice and job satisfaction. This is to mean
98.1% of variation in job satisfaction is explained by major components of performance appraisal
practice or system and the remaining 1.9% of variance is explained by other factors.
Table 4.4 ANOVA Result Table
ANOVAa

Model Sum of Squares df Mean Square F Sig.

1 Regression 400.205 5 80.041 808.789 .000b

Residual 7.422 75 .099

Total 407.628 80

30
 2 Regression .000 0 .000 . .c

Residual 407.628 80 5.095

Total 407.628 80

Source: Own survey, 2024

a. Dependent Variable: Job Satisfaction
b. Predictors: (Constant), Participation in appraising employees’ performance, Standards/ criteria of
performance appraisal, Understanding the purpose of PA(performance appraisal), Employee attitude
toward the rater, Performance appraisal procedure and process
c. Predictor: (constant)
The coefficient table for use of similar form to evaluate different professionals and non-professionals
and different variables that describe the dependent variable job satisfaction are presented as below.
The standardized beta coefficient explains the relative importance of the independent variable in
contributing to the variance of the dependent variable.
As the beta value is positive, it means that a higher positive effect of performance appraisal associated
with higher job satisfaction. Among the independent variables, use of identical evaluation template for
all employees/professional is less significant and statistically meaningful. This can be interpreted as a
certain improvement on the use of identical evaluation template for all employees/professional would
increase employee’s job satisfaction by only 9.5%. Thus, any change on this factor would bring about
minimal improvement on job satisfaction. This indicates that more focus should be given for other
variables than working on evaluation template.
Table 4.5 Coefficients
Coefficients
Standardized

Unstandardized Coefficients Coefficients

Model B Std. Error Beta t Sig.

1pa (Constant) -2.530 .213 -11.880 .000

31
 Understanding the
.271 .077 .156 3.504 .001
purpose of PA

Performance appraisal
.449 .104 .388 4.307 .000
procedure and process

Standards/ criteria of
.022 .086 .013 .261 .002
performance appraisal

Employee attitude toward

.444 .122 .217 3.638 .001
the rater

Participation in appraising
.377 .116 .235 3.237 .002
employees performance

2 (Constant) 3.059 .251 12.195 .000

Source: Own survey, 2024

a. Dependent Variable: Job Satisfaction

The table of coefficients shows the extent to which each independent variable influences the
dependent variable. The standardized beta coefficient explains the relative importance of each
independent variable in contributing to the variance of the dependent variable. As shown in the above
coefficient table of the regression result, the objective and hypothesis of the study are discussed
below.
As the beta value is positive, it means that a higher positive effect of performance appraisal associated
with higher job satisfaction. Among the independent variables, performance appraisal procedure and
process is more significant and statistically meaningful. This can be interpreted as a certain
improvement on the performance appraisal procedure and process would increase employee’s job
satisfaction by 38.8%. The performance appraisal procedure and process address the use of similar
templates for different professionals by different raters.

32
The next significant and statistically meaningful factor is participation of employees in appraisal
with beta value 0.235, which would increase job satisfaction by 23.5% if an improvement is made in
the practice of employee participation on appraisal. Which is not widely or uniformly practiced in
ethio telecom as clearly shown in the questionnaire response.
Another important factor found in the specific objective of the study for employee job satisfaction is
employee’s attitude toward the rater. It has got beta value of 0.217, which can be interpreted as a
certain improvement in employee attitude toward the rater would increase job satisfaction by 21.7%.
The company should work on the skill set of immediate supervisors and/or managers, who is
responsible for doing employee performance appraisal.
The other factor affecting employee job satisfaction is understanding the purpose of PA (performance
appraisal), which has 0.156 beta value. This shows that there would be a 15.6% improvement on job
satisfaction if the ethio telecom manages to aware the employees.
Thus, performance appraisal procedure and process followed by Individual /Personal Improvement
have a greater rate of change than other variables.
4.5 Analysis of Aggregate Scores
This Based on the aggregate mean and standard deviation scores, a descriptive analysis of the
dependent and independent variables is performed in this section. Table 4.3 displays the total mean
and standard deviation of the study's variables.
Table 1 Descriptive statistics

Involvement Consiste Adaptability Miss Employee

nce ion job
performan
ce
N 220 220 220 220 220
Valid
Mean 3.3071 3.3879 3.4174 3.340 3.4848
9
Std.
.50420 .57630 .58856 .5950 .5522
Deviation 4
Minimum 1.86 1.33 2.00 1.17 1.83
Maximum 4.57 4.83 4.67 5 5.00

33
 Source: Own survey, 2024
Table 4.3 displays the variable's mean score ranges from 3.3071 (involvement) to 3.4174
(adaptability). However, for almost all variables except involvement, their mean score approximates
3.4–3.79 (moderate) on the 5-point Likert scale, indicating that respondents were unsure of
themselves as to whether the issues raised related to consistency, adaptability, mission, and employee
job performance are practiced in the Awash bank. Involvement has the lowest mean, which is 3.3071.
This mean score approximates 3 (disagree) on the 5-point Likert scale, indicating that respondents
disagree on the involvement matters in their organization.
This implies that poor involvement in the Awash bank is a particularly big problem for effective
employee performance. On the other hand, the highest mean score (3.4174) for adaptability implies
that the employees of the Awash bank have good adaptability within the organization.
Furthermore, all of the variables' computed standard deviations are modest. The standard deviation of
the variables, as shown in Table 4.3, varies from a minimum of.50420 for involvement to a maximum
of 59504 for mission. Generally, the responses appear to be grouped around the mean response, as
indicated by the low standard deviation. Furthermore, the minimal response variability supports the
estimated mean score's stability and reliability as estimators. Depend on the descriptive analysis
adaptability and consistency has the highest effect on employee job performance. In contrast to the
other two dimensions, mission, and involvement scored lower with mean values of, 3.3409, and
3.3071, respectively. This suggested that the Awash bank organizational culture places comparatively
less importance on involvement, and mission. The mean score of employees
performance is 3.4848, suggesting that respondents had a moderate level of agreement
4.3 Association Between Study Variables
The study's participant data summary and descriptive statistics for the independent and dependent
variables are shown in the preceding section. The correlation analysis, which looks for the degree of
link between variables, is also presented in this section. The most often used indicator of the link in
this case is the Pearson correlation coefficient (Downes, 2014). Table 4.9 displays the Pearson
correlation coefficients between the study's variables.
**. Correlation is significant at the 0.01 level (2tailed).
The correlation coefficient range of the variables is indicated as follows such as: - 0.19 and below =
“very low”, the variables from 0.20 to 0.39 = “low”; from 0.40 to 0.69 = “modest”; from 0.70 to 0.89
= “high; whereas the variables among 0.90 to 1 = “very high.”

34
According to the correlation analysis presented in Table 4.4, adaptability can be seen as one of the
most important variables that have significant relationships with other independent variables identified
in this study. Adaptability in addition to having a positive and significant relationship with employee
job performance, it has also significant relationships with consistency (p < 0.01, r = 0.716), which is
high; mission (p < 0.01, r = 0.564), which is modest; and involvement (p < 0.01, r = 0.240), which is
low. This indicates the existence of positive relationships. Like adaptability, consistency has a positive
and significant relationship with employee job performance in the study and has significance
relationship with adaptability (p < 0.01, r = 0.716), which is high; mission (p<0.01, r = 0.585),
modest; and involvement (p < 0.01, r = 0.263), which is low. In line with the above dependent and
independent variables the relationship between missions and employee job performance is positive
and significant and has significance relationships with consistency (p < 0.01, r = 0.585), which is
modest; adaptability (p < 0.01, r = 0.564), again modest; involvement (p < 0.01, r = 0.211), which is
low.
The last variable is involvement has a negative and significant relationship with employee job
performance, it has significant relationship with consistency (p < 0.01, r = 0.263), which is low;
adaptability (p < 0.01, r = 0.240), again low; mission (p < 0.01, r = 0.211), again low.
Generally, Table 4.4 reveals that all correlations are significant. Based on the result of the study there
is relationship between all the variables.
4.4 The effect of organizational culture on employee job performance
Multiple regression analysis is utilized in this study to ascertain how organizational culture affects
employees' job performance at the Awash bank. The amount of change in the dependent variable for a
unit change in the independent variable is represented by a regression coefficient. To determine
whether the data were suitable for inference and conclusion-making, several diagnostic tests were
performed prior to the regression analysis.
4.4.1 Diagnostic tests
The purpose of the diagnostic tests is to ensure that the data is arranged in a way that supports the
fundamental presumptions of regression analysis. Regression analysis assumptions can lead to
erroneous relationship estimates and too or underlay confident estimates of the precision of regression
coefficients, as Asy'ari (2015) emphasized. To diagnose these issues, the researcher ran tests for multi
collinearity, independence, linearity, and normalcy.

35
4.4.2 Test of multi collinearity
Researchers used a variety of methods to identify the collinearity issue. When the independent or
predictor variables have a high degree of correlation, this is referred to as multi collinearity. As of
2006 (HO) according to HO (2006), one can ascertain the presence of multi collinearity by examining
the values of the "Tolerance" and "Variance Inflation Factor (VIF)" for every predictor. To examine
the pattern of correlations between independent variables, we use the Pearson correlation coefficient.
They contend that if a correlation matrix shows no correlation above 0.9, multi collinearity is not an
issue.
Table4: 2 Correlation Matrix to Test Multi collinearity

EJP IN CO AD MI

1
KJP

IN .-038 1

.572

CO .430 .263 1

AD .400 .240 .716 1

.377 .211 .585 .564 1

MI

Source: Own survey, 2024

Key; Employee job performance(EJP), Consistency(CO), Involvement (IN), Mission (MI)

Adaptability (A
In checking the relationship, Table 4.5 reveals that the highest Pearson correlation is found between
adaptability and consistency (0.716), which is below 0.9; therefore, it implies multi collinearity is not
a problem for these data

36
 Table4: 3 Collinearity Statistics (VIF & Tolerance

Collinearity Statistics
Tolerance VIF
Variables
Involvement .845 1.183
Consistency .432 2.316
Adaptability .238 4.199
Mission .606 1.649

Source: Own survey, 2024

In addition, multi collinearity is widely determined through the calculation of variance inflation
factors (VIF). According to Sayyari (2015), VIF values larger than 10 indicate multi collinearity; the
more severe the issue, the higher the VIF value. Based on the Rule of Thumb, on the other hand,
VIFs greater than 5 indicate severe collinearity. The tolerance, or the degree of variability of the
chosen independent variable not explained by other independent variables, is used to detect it in
addition to the VIF collinearity problem. Table 4.6 displays the tolerance and VIF scores for the
study's variables
Table 4.6 demonstrates that the tolerances and VIFs for each research variable were more than 0.1 and
less than 10, respectively. Involvement produced the least VIF at 1.183 and the highest tolerance at
0.845, while adaptability yielded the highest VIF at 4.199 and the least tolerance at 0.238. As this is
compatible with the threshold suggested in both cases by the Rule of Thumb and other authors cited
above, it guarantees that there was no multi collinearity and that all the independent variables were
preserved in the regression model.

4.4.3 Tests of Independence (Autocorrelation)

The Durbin-Watson test was used to determine the independence of error terms, which suggests that
observations are independent. The Durbin-Watson (DW) test checks that the residuals of the models
are not auto-correlated since the independence of the residuals is one of the basic assumptions of
regression analysis. The Durbin-Watson statistic has a range of 0 to 4. As indicated in Table 4.7
below, the DW result of the study is 1.655, which is consistent with the recommendation by Asy’ari
(2015); thus, the residuals of the empirical model are not auto correlated.

37
 Table 4 Model Summary (Durban-Watson)

Adjusted R Std. Error of the

Durbin- Source
Square Estimate Watson :
Mod R R
el Square Source
1 .510 .62 .613 .48316 1.662 : Own
a 5 survey
, 2024
Predictors: consistency, mission, adaptability, involvement,
Dependent: Variable (DV) employee job performance

4.4.4 Test of Normality

Another important assumption in the regression analysis model is normality. Normality is expressed
by the skewness of the data. In other words, normality represents a symmetrical (zero skewness) that
has smaller frequencies at the extremes and the highest frequency of scores in the middle. A
distribution with a high positive skewness has a log right tail. There is a tail that is log-left to a
distribution with substantial negative skewness. Conversely, kurtosis quantifies the degree to which
data points cluster around a single center. The kurtosis for a normal distribution has a value of zero
Table 4.9 demonstrates that the kurtosis and skewness coefficients are close to zero, indicating the
result assures that the distribution is normal for this study
Table 5 Normality Test

N Skewness Kurtosis
Statistic Statistic Std. Error Statistic Std.
Error
Involvement 220 .321 .164 .075 .327
Consistency 220 -.425 .164 -.916 .327
Adaptability 220 -.092 .164 -.540 .327
Mission 220 -.235 .164 -.1245 .327
Employee job 220 .033 .164 -.694 .327
performance
Valid N (listwise) 275
Source: Own survey, 2024
The histogram should be symmetric along the central 0 and the P-P plot's dots should be closer to
the diagonal line for the study's normalcy assumption to be satisfied. The P-P plot points in this
instance are a very straight diagonal line that runs from bottom left to top right, and the
histogram is symmetric. As a result, Figure 4.1's histogram is symmetric, and Figure 4.2's P-P

38
 plot shows that the assumption of normalcy is satisfied since the dots are closer to the diagonal
line.

Source: Own survey, 2024

Figure 2 Histogram/Normality of the data

4.4.5 Multiple Regression Test between Organizational Culture and

[
Employee job performance
Besides testing whether fundamental assumptions are not violated, it is also important to evaluate
the regression model. The study employs multiple regression analysis to test its hypotheses
empirically. With a 95% confidence level, the hypotheses were tested to provide a statistical
foundation for conclusions. To evaluate whether the regression model fits, the ANOVA test is
useful and is offered .

39
 Table 6 ANOVA Test

Sum of Mean
Model Squares df Square F Sig.
Sou
rce:
Ow
1 Regression 17.398 5 3.480 15.079 .000
b n
Residual 49.384 214 .231 surv
Total 66.783 219 ey,
2024

a. Dependent Variable (DV): Employee job performance.

b. Predictors:
consistency, involvement, mission adaptability,
The suggested regression model fits the data, as shown by Table 4.10 (the ANOVA table), and
the F value of 15.079 is significant at the 0.000 level. The ANOVA statistics show that because
the computed probability of 0.000 is less than the chosen 5% threshold, the data can be used to
make inferences about the parameters of the population.
Table 7 Model Summary

R Adjusted R Std. Error of

Model R Square Square the Durbin-
Estimate Watson
1 .625 .613 .48316 1.662
.510
a
Source: Own survey, 2024
Predictors: (Constant),involvement, consistency, adaptability, mission
c. Dependent Variable: employee job performance
According to Table 4.11, the regression model's R value is 0.510, and the R-square is 0.625.
According to the outcome, 62.5% of the variation in employee job performance can be explained
by the model.

40
 Table 8 Coefficients for the Variable

Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 2.185 .273 8.002 .000

-.161 .070 -.147 -2.304 .022

involvemen
t
Consistency .265 .086 .277 3.096 .002
adaptability .294 .113 .313 2.602 .010
mission .146 .070 .157 2.084 .038

Source: Own survey, 2024

Dependent Variable: employee job performance
The standard beta coefficient, which expresses each factor's distinct contribution to the model, A
significant statistical contribution of the predictor variable to the model is indicated by a modest
p value (<.005) and a high beta value. According to Ggorge et al. (2003), a modest beta value
and a high p value (p >.005) suggest that the predictor variable contributes little to nothing to the
model. Because the p value is less than 5%, all variables have a statistical contribution to the
model, as can be shown in Table 4.12. Furthermore, Table 4.12's regression model estimate is
explained as follows:
Employee job performance = 2.185 + 0.161
Involvement + 0.165 consistency+
0.294 adaptability + 0.146 missions
The result reveals that employee job performance would get 2.185 if the coefficient of all
independent variables held to constant zero.
To determine how independent variables compare to one another in terms of their effects on the
dependent variable, the multiple regression analysis result is essential. Accordingly, the outcome
demonstrates that consistency and adaptability produce the greatest standardized beta coefficients, at
0.277 and 0.313, respectively. This indicates adaptability and consistency are critical factors in
employee performance at Awash bank The highest beta coefficient implies that the dependent variable
can be most well explained by those variables alone. Furthermore, Table 4.12 shows that adaptability
and consistency have a significant level of less than 0.01 (p = 0.000). As a result, any kind of

41
improvement in adaptability and consistency at the Awash bank would help to increase employee
performance.
The third critical variable is mission. The findings show that the standardized beta coefficient of this
variable is 0.157 and the significant level is less than 0.05 (p = 0.038). Next to mission involvement
has yielded the highest effect, where the standardized beta coefficient of this variable is - 0.147 and
the significant level is less than 0.05 (p = 0.022).
4.7 DISCUSSION OF FINDINGS
In the previous sections, the collected data has been presented and analyzed using several analysis
techniques. Here, the main findings are discussed below.
A descriptive analysis reveals that poor involvement is a particularly big problem for employee job
performance at the Awash bank. The analysis of correlation argues that adaptability can be seen as
one of the most important variables that have significant relationships with other independent
variables identified in this study. Next, the result stresses that consistency is another variable that is
also important in an organization.
This research also finds out that consistency, mission, involvement, and adaptability together account
for 62.5% of the variation in employee performance. To ascertain respondents' perceptions of the
relationship between organizational culture and employee’s performance in the case of the Awash
bank, the researcher employed both inferential and descriptive analysis techniques, including
regression and correlation analysis. Descriptive techniques included measures like frequency, mean,
and standard deviation and inferential regulation and correlation analysis. The following are
summaries of the analysis's findings: The mean score for
the measures of adaptability were relatively high (3.4174), followed by consistency is (3.3879). In
contrast to the other two dimensions, mission, and involvement scored lower with mean values of,
3.3409, and 3.3071, respectively. This suggested that the Awash bank. organizational culture places
comparatively less importance on involvement, and mission. The mean score of employee
performance is 3.4848, suggesting that respondents had a moderate level of agreement regarding
employee performance.
All variable (i.e., involvement, consistency, adaptability, and mission), Pearson coefficients suggested
a statistically significant positive link between employee performance and all four organizational
cultural dimensions at the P<0.01 level. Furthermore, compared to the other cultural dimensions,
adaptability exhibited a higher positive and statistically significant link with employee performance.

42
After that, there was a substantial and positive association between employee performance and
mission and consistency, but a negative correlation between employee performance and involvement.
The findings of the regression study showed that the independent variables— involvement,
consistency, adaptability, and mission—could account for 62.5% of the variation in employees'
performance, as indicated by the R-square of 0.625. This suggested that 62.5% of the Awash bank
organizational culture affected the performance of employees. There are other variables that account
for 37.5% of the variation in employees' performance.
The ANOVA table demonstrated that the F-statistics P-value (0.000) is less than the 0.05 significance
level (P<0.05). This indicates that, in terms of statistics, the model was significant or appropriate. At a
95% confidence level, employees' performance was significantly influenced by their consistency,
adaptability, involvement, and mission, as indicated by their respective P-values of 0.002, 0.010,
0.022, and 0.038. The significance criterion for them was P<0.05, or less than 0.05. With a P-value of
less than 0.05 (P<0.05), adaptability and consistency are the most important independent variables
that statistically significantly influence employees' performance.
Other theories about involvement, consistency, adaptability, and mission were approved.

43
 CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMENDATIONS
5.1. SUMMERY
The main purpose of the survey was to study the effect of performance appraisal practice on
employees’ job satisfaction in the case of ethio telecom, particularly in East Addis Ababa Zone. The
objectives of the study was to assess the effect of performance evaluation practices used in ethio
telecom, and to find out how employees reflect on performance evaluation technique, evaluators and
its impact on job satisfaction.
Majority of the staffs claim to know the performance appraisal procedure and process of ethio telecom
but a little less than the average number of employees lack the understanding on appraisal process and
procedure of the company. The analysis also indicated that improvement in this area would positively
impact job satisfaction of employees. As discussed in the previous chapter, this yields the highest
improvement on job satisfaction of employees, compared to other performance appraisal practice
variables. Among the procedure and process of performance appraisal system, use of similar template
to evaluate employees using identical evaluation template for all employees/professionals throughout
the company by different appraisers, which also need improvement to increase employee job
satisfaction.
As the response of the questionnaire indicated there is lack of consistency on employees’ participation
in appraising employees’ performance. All immediate supervisors or managers follow different
approach on appraising employees’ performance. The analytical result also proved that improvement
in employees’ participation in performance appraisal is the second important factor to enhance
employees job satisfaction. It is also recommended to use similar approach in the company to avoid
inconsistency and improve job satisfaction.
The statistical result showed that about average number of respondents have positive attitude toward
the rater overall competence like training, fairness, and supportiveness on appraising employees.
Similarly, it is the third important factor affecting employees job satisfaction that result in positive
improvement if an effort is made to improve the skill set of performance raters. The researcher also
recommends that ethio telecom need to give refreshment training or workshops for performance
raters, as performance appraisal time is approaching.

44
It is clearly seen that there is lack of understanding on the purpose of performance appraisal practice
used in ethio telecom. The statistical result also proved this to be the same.
Most of the employees of ethio telecom know the Standards or criteria of performance appraisal
system of the company. Majority of the employees agree or have positive response on individual or
personal improvement plan of the organization towards its employees.
It is also clearly seen that there is an average satisfaction level on ways of employee’s appeal towards
performance rating results given by their immediate supervisor or manager.
Only a third of the company employees claim to be satisfied in their job in ethio telecom, particularly
in EAAZ. It is also understood that there is a performance appraisal practice conducted every year for
each employee in the company that is used for bonus and partly for promotion.
Key Findings
Multicollinearity Check:
Variance Inflation Factor (VIF) values ranged between 1.183 and 4.199, all below the threshold of 10.
Tolerance values were above 0.1, confirming no multicollinearity issues.
Autocorrelation Check (Durbin-Watson):
The Durbin-Watson value of 1.655 indicates no autocorrelation of residuals, satisfying regression
assumptions.
Normality Test:
Skewness and kurtosis values for all variables were close to zero, confirming normal distribution.
Histogram and P-P plot further supported the assumption of normality.
Regression Analysis:
The regression model's R-square value is 0.625, indicating that 62.5% of the variance in employee
performance is explained by organizational culture dimensions. ANOVA showed the model is
statistically significant (F = 15.079, P < 0.05).
Coefficients revealed:
Adaptability (β = 0.313, P = 0.010) and consistency (β = 0.277, P = 0.002) are the strongest
predictors.
Mission (β = 0.157, P = 0.038) and involvement (β = -0.147, P = 0.022) also have significant impacts,
but involvement had a negative effect.

45
 Descriptive Analysis:
Adaptability had the highest mean score (3.4174), followed by consistency (3.3879), while
mission (3.3409) and involvement (3.3071) were lower.
Employee performance scored a mean of 3.4848, reflecting moderate agreement.
Correlation Analysis:
All dimensions of organizational culture positively correlated with employee performance (P <
0.01), except for involvement, which showed a negative relationship. Adaptability exhibited the
strongest positive correlation.
Discussion:
Organizational culture dimensions collectively account for a significant portion of employee
performance (62.5%).
Adaptability and consistency are pivotal factors for enhancing performance, while low
involvement indicates an area for potential improvement.
Recommendations
• Focus on enhancing adaptability and consistency to improve performance.
• Address involvement, as its negative relationship suggests a need for strategies to engage
employees more effectively.
• Strengthen alignment of the mission to foster employee motivation and productivity

5.1 Conclusion
The general objective of the study was to determine the effect of performance appraisal practice on
employee job satisfaction using a survey questionnaire in ethio telecom. The study was guided by the
following specific objectives: to assess the practice of performance appraisal of ethio telecom to
determine the relationship between performance appraisal practices and job satisfaction and to find
out its effect on level of employee job satisfaction in ethio telecom. The study shows that:
From the study, it is seen that about one third of the employees claim to be satisfied but the rest are
either neutral or not satisfied. This shows that employees job satisfaction is closely related with the
factors considered in this study like understanding the purpose of performance appraisal system of the
company, employees’ attitude about the rater and others except individual or personal improvement
plan of the organization towards its employees. It is concluded that human resource department in

46
collaboration with training and development should work on employees concerning performance
appraisal system of ethio telecom and related issues addressed in this study.
There is lack of consistency on employees’ participation in appraising employees’ performance and
hence it is recommended to use similar performance appraisal practice throughout the company. Some
managers or supervisors use participatory performance evaluation approach and yet others not. Since
this could be a potential reason for lack of satisfaction of employees on their jobs. It is better to decide
one approach by consulting concerned stakeholders and discussing on the pros and cons of existing
inconsistent approaches and finally decide on one approach that the company should follow. This
would reduce the grievances or job dissatisfaction happening due to different performance evaluation
approaches.
Having only one third employees that are satisfied with their job, would make it difficult for ethio
telecom to achieve its goal. The introduction of new telecom operators in the county would make the
competition for the company very challenging considering the likelihood of employee migration or
turnover. Ethio telecom can conduct additional survey by assuming the result of this study as an input
to device ways to address the gap of employee satisfaction level.
5.2 Recommendations

❖ In this sub-section, the researcher forwards her own recommendations to the concerned
stakeholders of the organization to solve the problems:
✓ The management should use and apply clear and measurable criteria or rates to conduct
performance appraisal.
✓ Before performance appraisal is carried out, necessary information and resources related with
their jobs should be provided to employees.
✓ The performance appraisal system of the organization should leave enough room for feedbacks
and comments
✓ The management should make the performance appraisal system a tool for learning and
development of its staffs.
✓ The organization is recommended to redesign its appraisal interview in such way that it should
be completely based on a constructive, two-way discussion of performance and goal setting.
Performance goals should consider pertinent environmental factors and PA results should fully
be acted upon.
47
✓ Resources that are required by the employees should be made available.
✓ Finally, the appraisal process should fully be made fair and reasonable.

5.3 Limitation And Suggestions for Future Research

Expand Geographic and Institutional Scope:
Future studies should include multiple branches across different regions or explore other banks
and industries to enhance the generalizability of the findings.
Longitudinal Studies:
Conduct longitudinal research to examine changes in organizational culture and their impact on
employee performance over time, providing insights into causal relationships.
Incorporate Additional Variables:
Future research could explore other factors influencing employee performance, such as leadership
styles, technological adaptation, or employee well-being, to build a more comprehensive model.
Mixed-Methods Approach:
Combining quantitative methods with qualitative approaches (e.g., interviews or focus groups)
could provide richer insights into how organizational culture impacts employee performance.
Examine Mediating and Moderating Variables:
Investigate potential mediating factors (e.g., job satisfaction, motivation) or moderating variables
(e.g., age, tenure, department) that could influence the relationship between organizational culture
and employee performance.
Cross-Cultural Studies:
Comparative studies across different cultures or countries could provide a broader perspective on
how cultural dimensions affect employee performance in varying contexts.
Focus on Specific Cultural Dimensions:
Further research could delve deeper into specific dimensions, such as involvement or adaptability,
to understand why they impact performance differently and how they can be improved.
Leverage Advanced Statistical Methods:
Use structural equation modeling (SEM) or mediation analysis to assess the complex relationships
among variables for a more robust understanding.
Explore Industry-Specific Dynamics:
Investigate how organizational culture and employee performance relationships vary across
industries, such as finance, healthcare, or technology, for industry-specific recommendations.
48
Impact of External Factors:
Examine how external factors like economic conditions, regulatory changes, or technological
advancements influence organizational culture and employee performance.

49
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 APPENDIX A:
QUESTIONNAIRES AND INTERVIEW GUIDE.
MARYLAND INTERNATIONAL COLLEGE
SCHOOL OF GRADUATE STUDIES
Dear Sir/Madam,
This survey is conducted as part of a research project which shall be submitted in partial fulfillment of
the master’s degree in Master of Business Administration at MARYLAND College of Post Graduate
Studies. The purpose of this study is to assess the effect of performance appraisal practice on
employee job satisfaction.
This survey is solely intended for academic purpose and would not be used for any other purpose.
You are not expected to write your name on this questionnaire.
I would like to thank you in advance for your valuable responses for the questions in this
questionnaire and your valuable time to fill this questionnaire. Your genuine and correct responses
give more value to this research. For anything that is not clear, please don’t hesitate to contact me via
my cell phone 0912924651.
Please put a tick mark in the space provided that indicates your level of agreement.
Part I – Demographic profile of the respondents
1. Sex: Male Female
2. Age: Below 25 25-35 36-45 46-55 Above 55
3. Educational background:
Certificate/vocational Diploma First degree
Master degree and above
4. Years of experience (in ethio telecom) _____________________________
5. Current position in ethio telecom
Analyst Specialist Supervisor/coordinator Expert Manager Director
Please read each statement in this part carefully and show the extend of your agreement on the
statements by putting” √ “or ”X” mark in the boxes using the following rating scales (likert
scales):
Strongly agree (SA)=5, Agree (A)=4, Neutral (N)=3, Disagree (D)2, and Strongly disagree
(SA)=1.

53
 Part II-General Questions
1. How do you rate your perception that the existing performance appraisal system
contributes to your job satisfaction.
Variable description Strongly Agree Neutral Disagree Strongly
Agree Disagree

Understanding the purpose of performance appraisal in ethio telecom

The method shows the strength and

weakness inside the employee

Promote a two-way system of

communication between the
supervisors and the employees from
clarifying expectations
Serves to determine appropriate salary
increment based on result
Promote personal growth and
advancement in the career of the
employees
Performance appraisal procedure and process

Clearly communicated to all before

implementation
Appraisal is done by the supervisor
and the employee sit together
Performance is evaluated as per pre-
established standards
Feedback on good or poor progress is
forwarded openly.
I have ways to appeal for appraisal
complaints

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 Variable description Strongly Agree Neutral Disagree Strongly
Agree Disagree

Performance is conducted regularly

Standards/ criteria of performance appraisal

The performance criteria are objective

The criteria distinguish effective from

ineffective performers
Criteria are customized based on the
characteristics of my job.
The Criteria are exhaustive to appraise
employee Performance
Employee attitude toward the rater

Appraisers lacks training

My supervisor gives equivalent ratings

My supervisor keeps a file on my

activities during the appraisal period
My rater frequently lets me know how
I am doing
Individual /Personal Improvement

My rater is cooperative enough to

improve myself in education and
training
The evaluator use my performance
appraisal result for education and
training
My supervisor shows and supports to
prepare myself for responsibility and
promotion

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 Variable description Strongly Agree Neutral Disagree Strongly
Agree Disagree

My performance is used to improve

performance and achievement.
My rater frequently lets me know how
I should do to improve performance
Ways of employees appeal towards performance rating

I have ways to appeal to a performance

rating that I think is biased and
inaccurate
I can challenge a performance rating if
I think is biased or inaccurate
Participation in appraising employees performance

Immediate supervisors are responsible

to performance appraisal
Performance appraisal among peers is
common in Ethio Telecom
Individuals employee assess their own
performance appraisal
Upward performance appraisal
techniques is practical in Ethio
Telecom (subordinates evaluate their
supervisors)
Participation in the process is not at

the required level

Job Satisfaction

How satisfied are you with your

current job in the department/section
you are working?

56
 Variable description Strongly Agree Neutral Disagree Strongly
Agree Disagree

How do you rate the appeal

process/procedure and its ease?
How much are you satisfied with the
performance appraisal system of the
company?
Your performance evaluation or
appraisal result does not affect your
job satisfaction.
I feel satisfied with ethio telecom
performance appraisal system that is
used to evaluate and rate my
performance.
I am comfortable in communicating
my feeling of disagreement on my
evaluation result to the
supervisor/manager.
I am satisfied with the appeal process
of performance appraisal system of
ethio telecom
The feedback for the appeal on my
performance is satisfactory.

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