The Effects Of Performance Appraisal System On Job Satisfaction: The Case Of Awash Bank S.C

Abstract

This study examines the effect of performance appraisal on employees’ job satisfaction at Awash Bank Share Company. Recognizing that employees are the backbone of any organization; the study highlights how organizational success is closely tied to employee well-being. An explanatory research design and mixed research approaches were employed, utilizing primary and secondary data. A self-administered structured questionnaire was used to collect relevant data, and a census approach was applied due to the small population size, with considerations based on previous studies, published tables, percentage cut-off points, and formula-based sample size calculations. A total of 131 questionnaires were distributed through non-probability judgmental sampling techniques, and 107 questionnaires were successfully collected, yielding a response rate of 81.68%. To ensure reliability, the census approach was adopted, and data were analyzed using Statistical Packages for Social Science software, presented through descriptive and inferential statistical methods. Findings revealed a strong positive correlation between performance appraisal and job satisfaction, with 56% of variations in job satisfaction attributed to performance appraisal components. However, results also indicated that a majority of employees were dissatisfied with the current appraisal practices. Consequently, it is recommended that Awash Bank implement a more effective feedback system and ensure fair, objective appraisals. Furthermore, senior management should recognize the importance of a well-structured performance appraisal system in fostering higher employee satisfaction