Investigation of Building Demolition Practices and Safety Precautions on Selected Sites of Addis ...

165 Pages·2016·6.1 MB·English

Addis Ababa University
School of Commerce

The Impact of Performance Appraisal on Employee
Motivation in United Bank S.C

BY
TIGIST GIRMA
GSD/0015/06

A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE
REQUIRMENTS FOR AWARD OF MASTER DEGREE IN HUMAN
RESOURCE MANAGEMENT

ADVISOR
ABRARAW CHANE (PhD)

May, 2017
ADDIS ABABA, ETHIOPIA

DECLARATION

I, Tigist Girma, hereby declare that this thesis is my own work towards in Partial Fulfillment of
the Requirements for the Degree of Masters of Arts in Human Resource Management and that, to
the best of my knowledge, it contains no material previously published by another person or
material which has been accepted for the award of any other degree by any university or
academic institutions, except where due acknowledgment has been made in the context.

Tigist Girma (GSD/0015/06) Signature
(Student’s Name & ID)

Date
Letter of Certification

This is to certify that Tigist Girma has done this study on the topic, “Impact of performance
appraisal on employee motivation: The case of united bank S.C under my supervision. This
work is original and suitable for the submission in partial fulfillment of the requirement for the
award of Degree of Masters of Arts in Human Resource Management.

Advisor
Abraraw Chane (PhD)
Addis Ababa, Ethiopia

Signature -------------------------

Date --------------------------
ADDIS ABABA UNIVERSITY
SCHOOL OF COMMERCE
POSTGRADUATE PROGRAM
DEPARTMENT OF HUMAN RESOURCE MANAGEMENT.

THE IMPACT OF PERFORMANCE APPISAL ON EMPLOYEES
MOTIVATION: THE CASE OF UNITED BANK S.C

SUBMITTED BY: Tigist Girma (GSD/0015/06)

Approval by Board of Examiners

--------------------- --------------------------

Advisor Signature

-------------------------- -------------------------
Internal Examiner Signature
-------------------------- --------------------------
External Examiner Signature

ACKNOWLEDGEMENT

The successful completion of this dissertation would have not been possible without the support
and cooperation of others.
I would like to extend my heart-felt appreciation and sincere gratitude to my advisor, Abraraw
Chane (PHD) for his critical reading and giving me invaluable advice, guidance and constructive
comment at every stage in making of the thesis more articulate.
I would like to extend my gratitude to employees of united bank who showed the willingness to
provide me all the necessary data used for successful completion of the study. Special thanks go
to my husband, Henok Kebede who has given his support in fulfilling this study.
Last, I want to give my special gratefulness to my family who have extended their unreserved
support and take care of my baby. Without their credible support, it would have been hardly
possible to complete this research.

Tigist Girma

June 2017, Addis Ababa
Contents
Chapter One
1.1. Background of the study ...................................................................................................................... 1
1.2 Background of the organization ........................................................................................................... 2
1.3 Statement of the problem ..................................................................................................................... 2
1.4 Research Questions .............................................................................................................................. 3
1.5 Objectives of the study ......................................................................................................................... 3
1.6 Hypothesis............................................................................................................................................ 4
1.7 Significance of the study ...................................................................................................................... 4
1.8 Scope of the study ................................................................................................................................ 5
1.9 Limitation of the study ......................................................................................................................... 5
1.10 Definition of terms ............................................................................................................................... 6
1.11 Organization of the study ..................................................................................................................... 6

Chapter Two
Literature Review ............................................................................................................................................. 7
2.1 Performance Appraisal: An Overview ................................................................................................. 7
2.1.1 Definitions of Performance Evaluation ........................................................................................ 7
2.1.2 Purposes of Performance Evaluation. .......................................................................................... 8
2.1.3 Performance Management Benefits ............................................................................................. 9
2.1.4 Factors Affecting Effectiveness of Performance Evaluation ..................................................... 10
2.1.4.1 Qualities of Evaluation Criteria ............................................................................................. 11
2.1.4.2 Feedback ................................................................................................................................ 12
2.1.4.3 Management by Objectives .................................................................................................... 13
2.1.4.4 Goal Setting ........................................................................................................................... 14
2.1.4.5 Judgment based on evidence .................................................................................................. 15
2.1.5 Performance Appraisal Process ................................................................................................. 15
2.1.6 Common Problems in performance evaluation system .............................................................. 16
2.1.7 Performance Evaluation Methods .............................................................................................. 18
2.1.7.1 360-Degree Feedback Evaluation Method ............................................................................. 18
2.1.7.2 Rating Scales Method ............................................................................................................ 19
2.1.7.3 Critical Incident Method ........................................................................................................ 19
2.1.7.4 Ranking Method ..................................................................................................................... 19
2.1.7.5 Behaviorally Anchored Rating Scale Method ........................................................................ 19
2.1.7.6 Results-Based System ............................................................................................................ 20
2.1.7.7 Work Standards Method ........................................................................................................ 20
2.2 Motivation .......................................................................................................................................... 20
2.2.1 Definition of Motivation ............................................................................................................ 20
2.2.2 Types of Motivations. ................................................................................................................ 21
2.2.2.1 Extrinsic Motivation. ............................................................................................................. 21
2.2.2.2 Intrinsic Motivation................................................................................................................ 21
2.2.3 Importance of Motivation. ......................................................................................................... 22
2.2.3.1 Improves Performance Level:. ............................................................................................... 22
2.2.3.2 Helps to Change Negative or Indifferent Attitudes of Employees:. ...................................... 22
2.2.3.3 Reduction in Employee Turnover:. ........................................................................................ 22
2.2.3.4 Organizational image. ............................................................................................................ 22
2.2.4 Motivational Theories. ............................................................................................................... 23
2.2.4.1 Maslow’s Hierarchy of Needs. ............................................................................................... 23
2.2.4.2 Herzberg Theory of Motivation. ............................................................................................ 24
2.2.4.3 Expectancy Theory. ............................................................................................................... 25
2.2.4.4 Incentive theory...................................................................................................................... 26
2.2.4.5 Reinforcement Theories. ........................................................................................................ 26
2.2.4.6 Alderfer’s ERG Theory. ......................................................................................................... 27
2.2.4.7 McClelland’s Need Theory. ................................................................................................... 27
2.2.5 Factors for Employee Motivation. ............................................................................................. 28
2.2.6 Performance Appraisal and Employees Motivation. ................................................................. 29
2.2.7 Conceptual Framework. ............................................................................................................. 31

Chapter Three
3.1 Research Design & Approach. ........................................................................................................... 33
3.2 Research Approach ............................................................................................................................ 33
3.3 Population .......................................................................................................................................... 33
3.4 Sample size ........................................................................................................................................ 34
3.5 Sampling Technique .......................................................................................................................... 34
3.6 Data Source and Collection Technique .............................................................................................. 35
3.7 Reliability ........................................................................................................................................... 35
3.8 Validity .............................................................................................................................................. 35
3.9 Ethical Consideration ......................................................................................................................... 36
3.10 Method of Data Analysis ................................................................................................................... 36

Chapter Four
Data analysis, Discussion and interpretation ................................................................................................. 36
4.1 Response Rate of respondents ............................................................................................................ 37
4.2 Background of respondents. ............................................................................................................... 39
4.3 Analyzing the perception of Employees towards performance Appraisal ......................................... 40
4.4 Analyzing the relationship between Performance Appraisal and Employee Motivation .................. 42
4.5 Analyzing the effect of performance Appraisal on Employee Motivation ........................................ 44

Chapter Five
Major Findings, Conclusion and Recommendation ....................................................................................... 46
5.1 Summary of major Findings .............................................................................................................. 46
5.2 Conclusions ........................................................................................................................................ 47
5.3 Recommendations .............................................................................................................................. 49
5.4 Future Research Directions ................................................................................................................ 50

References ...................................................................................................................................................... 51
LIST OF TABLES AND FIGURES

Descriptions Page No

Figure 2.1 Performance Appraisal Process 26

Figure 2.2 Conceptual Frame Work 42

Table 3.1 Population Vs Sample Size 45

Table 4.1 Respondents per branch & job classification 48

Table 4.2 Demographic Variables 49

Table 4.3 Descriptive Statistics of performance evaluation system & motivation 51

Table 4.4 Correlation result of study variables 52

Table 4.5 Dependent variable (motivation) Model summary 54
LIST OF ACRONYMS

HR Human resource

SPSS Statistical Package for social science

MBO Management by objectives

SMART Specific, Measurable, Achievable, Realistic & Time bound

S.C Share Company