Abstract:
The purpose of this study is to investigate the effect of performance management system on employees’ job-satisfaction a case study of selected private banks in Ambo town. The research approach was quantitative with explanatory. Quantitative type of data was collected as a primary and related literature and documents as a secondary source. Closed-ended questionnaires were distributed to entire clerical staff employees from three banks in Ambo town. Total of 91 questionnaires were collected and processed for analysis using descriptive and inferential statistics with the help of SPSS. Relationship of the independent and dependent variables were analyzed using the correlation and regression methods. The results were then presented in the form of tables followed by discussions for further interpretation on the findings. The major findings of the research indicated that the internal consistence variables of the performance management system to have been perceived as less effective. While the view of the employees towards the determinant factors varies, the overall perception of the employees towards the performance management system was positive. The study has found out that there was a positive moderate relationship between the independent variables (the PMS) and employees’ job-satisfaction. Finally, the researcher has recommended the bank PMS should be linked vertically and horizontally to other HRM practices like career progression and employees’ development, Financial and non-financial incentive should be linked to the annual performance management system so that employees would be motivated to perform better. Banks should address clear and attainable PMS policies which encourage employees, and finally the banks should encourage more communication between management staff and their subordinates
