ASSESSMENT OF PERFORMANCE APPRAISAL PROBLEMES (IN

CASE OF ARBA MINCH GENERAL HOSPITAL)

BY

SHIFERA BAZEZEW

ADVISOR

AMANUEL TESFAYE

A SENIOR ESSAY SUBMITTED TO THE DEPARTMENT OF MANAGEMENT IN

PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE BACHELOR OF
ARTS DEGREE

ARBA MINCH UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENTS OF MANAGEMENT

ARBA MINCH, ETHIOPIA

JUNE, 2017
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2
 DECLARATION
I hereby declare that the research entitled on “Assessment of Performance Appraisal
Problems" is my own work, that it has not been submitted for any degree or examination at any
other institution of higher learning, and that all references have, to the best of my knowledge,
been correctly reported. It is being submitted for BA degree in management at Arba Minch
University.

Student's Full Name: _________________

Date: ______________________________________

Sign: _______________________________________

_________________________ ____________________________

Advisor Name Signature and Date

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 CERTIFICATION
It is certified that this research project titled “assessment of performance appraisal problems” is
based on original research work carried out by Shifera Bazezew under our supervision and that
it has not been submitted for the award of any degree in this or any other University.

1. _____________________________ ____________ ________________

Advisor Signature Date

2. ___________________________ _____________ _________________

Examiner 1 Signature Date

3. ___________________________ ______________ _________________

Examiner 2 Signature Date

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 ACKNOWLEDGEMENT
First and foremost I would like to say thanks for my “ALMIGHTGOD” for his inexpressible
gifts. I am deeply thankful to my advisor Mr. Amanuel Tesfaye (MBA) for his professional
advice, respectful help, valuable and constructive comments and suggestion to complete this
research.

I would like to express my gratitude to all those Chamo campus teachers who provide suggestion
and guideline before, during and after completion of this study initial draft.

Also I would like to acknowledge the imminence role of my family especially for my sister
Zenebu Bazezew and my brother Abebe Bazezew for their continual support and treatment to
complete my education as well as this research.

Lastly I would like to show my deep appreciation and gratitude for my Uncles Eshetu Cherienet
and Beshah Bogale for their advice and for their unconditional financial support to complete this
study.

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 Table of Contents
DECLARATION..............................................................................................................................I
CERTIFICATION..........................................................................................................................II
ACKNOWLEDGEMENT.............................................................................................................III
LIST OF TABLES........................................................................................................................VI
ABSTRACT.................................................................................................................................VII
CHAPTER ONE..............................................................................................................................1
1. Introduction..................................................................................................................................1
1.1. Background of the Study......................................................................................................1
1.2. Statement of the Problem......................................................................................................2
1.3. Objective of the Study..........................................................................................................3
1.3.1. General Objective..........................................................................................................3
1.3.2 Specific Objective...........................................................................................................3
1.4. Significance of the Study......................................................................................................4
1.5. Scope of the Study................................................................................................................4
1.6. Limitation of the Study.........................................................................................................4
1.6. Organization of the Study.....................................................................................................5
CHAPTER TWO.............................................................................................................................6
2. REVIEW OF RELATED LITERATURE...................................................................................6
2.1. Definition of Performance Appraisal....................................................................................6
2.2. Importance of Performance Appraisal..................................................................................7
2.3. Performance Appraisal Methods..........................................................................................7
2.3.1. Graphical Rating Scale..................................................................................................7
2.3.2. Check List Method........................................................................................................8
2.3.3. Goal setting or Management by Objectives (MBO)......................................................8
2.3.4. Work Standard Approach..............................................................................................8
2.3.5. Essay appraisal...............................................................................................................8
2.3.6. Critical Incident Appraisal.............................................................................................9
2.3.7. Forced – Choice rating...................................................................................................9
2.3.8. Behaviorally anchored rating scale (BARS)..................................................................9
2.3.9. Ranking Methods.........................................................................................................10
2.4. Potential Error or problems in Performance Appraisals.....................................................10
2.4.1. Halo Effect Error.........................................................................................................10
2.4.2. Leniency error..............................................................................................................10
2.4.3. Central Tendency error................................................................................................10
2.4.4. Recency Error..............................................................................................................10
2.5. Overcoming error in performance Appraisals....................................................................11
2.6. Purpose of Performance Appraisal.....................................................................................11
2.6.1. For Administration Purpose.........................................................................................11
2.6.2. For Development Purpose...........................................................................................12
2.7. Requirements for Effective Performance Appraisal System..............................................12
CHAPTER THREE.......................................................................................................................14
3. RESEARCH METHODOLOGY..............................................................................................14
3.1. Research design..................................................................................................................14
3.2. Target Population................................................................................................................14
3.3. Sampling Technique and Sample Seize..............................................................................14

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 3.3.1. Sampling Technique....................................................................................................14
3.3.2. Sample Size.................................................................................................................15
3.4. Data Source.........................................................................................................................15
3.5. Method of Data collection..................................................................................................15
3.6. Data Presentation and Analysis..........................................................................................16
3.7. Study Area Profile..............................................................................................................16
CHAPTER FOUR.........................................................................................................................18
4. DATA PRESENTATION AND ANALYSIS...........................................................................18
4.1 introductions........................................................................................................................18
4.2. Analysis of Respondents Personal Profile..........................................................................18
4.3. Evaluation in the Organization...........................................................................................22
4.4. Impact of Performance Appraisal on employees................................................................23
4.5. Role or important of Performance Appraisal......................................................................26
4.6. Drawback Of Performance Appraisal................................................................................27
4.7. Important ofperformance Appraisal For Employee............................................................29
4.8. Analysis and interpretation made for open indeed question related to performance
evaluation problem and its resolution method...........................................................................30
4.9 Analyze on general interview question related to evaluation technique and standards.......31
CHAPTER FIVE...........................................................................................................................32
5. CONCLUSION AND RECOMMENDATION........................................................................32
5.1 Conclusion...........................................................................................................................32
5.2. Recommendations...............................................................................................................34
REFERENCES..............................................................................................................................36
APPENDIX I.................................................................................................................................37
Appendix II....................................................................................................................................41

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 LIST OF TABLES
TABLES
PAGES

Table.1 Demographic Characteristics of the Employee------------------------------------------------18

Table.2 Existence of Performance Appraisal------------------------------------------------------------20

Table.3 Evaluators in the Organization-------------------------------------------------------------------21

Table.4 Impact of Performance Evaluation --------------------------------------------------------------23

Table .5 Role of Performance Appraisal to the Organization------------------------------------------25

Table.6 Drawback Of Performance Evaluation --------------------------------------------------------27

Table. 7 Important Of Performance Evaluation To The Employee----------------------------------28

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 ABSTRACT

This research is entitled as assessment of performance appraisal problems evaluation in case of

Arba Minch General Hospital. The main objective of the study is to identify problem of employee
performance evaluation. To achieve this objective primary and secondary data was collected.
The samples were taken from permanent employees of the organization. Form the total
population of the organization the researcher were take only 85 sample representative by using
simple random sampling technique. To obtain relevant information regarding the problem
questionnaire and direct interview were used. The collected data would be edited to avoid some
error during data collection and then organized it in to a suitable form to achieve the objective
of the study. This edited data were presented in the form of tabulation and percentage. The types
of analysis is descriptive analysis because to analyze the data like table the most important one
than other techniques. According to the finding the organization conducts performance
evaluation semi – annually by their boss or immediate supervisors. The organization mostly used
graphic rating scale evaluation technique and standard of evaluation like punctually, clarity,
completeness on time, skill, knowledge and quality of work. However there are problems in
evaluation of employees which come from poor evaluation standards and techniques. The major
problems are subjectivity and biasness. Performance evaluation has both positive and negative
impact on employees moral and satisfaction. Based on the finding most of the time the
organization evaluates individual employees rather than the overall employees to improve the
performance of each and every individual employee. Finally, in order to solve problems
concerning about employee performance evaluation, it is better that the organization have to
evaluate its employees through a committee or supervisors rather than a single immediate
supervisor. It is better that evaluators of the organization take a training program concerning
about performance evaluation on how to evaluate and interpret the result and purpose of
performance evaluation.

VII
VIII
 CHAPTER ONE

1. Introduction
1.1. Background of the Study
Performance evaluation is one of the human resource management activities. Human resource
management is the systematic planning and management of a network of fundamental
organizational process affecting and involving the overall organization members. Performance
evaluation is help to determine the extent to which an employee is performing the job effectively
or the process of determining and communicating to an employee how he or she is performing on
the job and ideally establishing a plan of improvement. It can also be termed as performance
review, performance rating, merit rating, performance appraisal, and employee appraisal and
employee evaluation (Lioyd L. Byars and Leslie W. Rue, 1997).
Performance is said to be a result of employee and abilities and role perception in the
organization during formal specified period of time is assessed. It can also defined as a structural
form of interaction between subordinate and supervisor that usually takes the form of periodic
interview annually or semi-annually in which the work of the employee is examined and
discussed used a view of identifying weakness and strength as well as opportunities for
improvement and skill development (Dessler,2002).
Performance is defined here as the record of outcomes of produced on a specified job function or
activities during a specified time period. Performance appraisal is a system of review and
evaluation of job performance of an individual or a team. Performance appraisal data are
potentially valuable for use in numerous human resource functional areas including human
resource planning, recruitment and selection, training and development, career planning and
development, compensation program, internal employee relation and assessment of employee
potential. Appraisal is a procedure by which an organization assesses employee’s performance
based on present standards. The main purpose of appraisal is to support managers efficiently,
staff companies and deal with human resource and development efficiency (H. John Bernarndin,
2010).

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While evaluating employee’s performance, many organization in our country, Ethiopia Face
various problems or errors like leniency or strictness, central tendency, recency, hallo effect,
perceptual differences and biasness. These problems limit the full purpose of performance
evaluation. When appraisal are properly conducted it not only let employees know how well
they are performing, but also influence their future level effort and task direction (LioydL.Byar,
1997).

In case of Arba Minch General Hospital, major problems in related to employee performance
evaluation are subjectivity, biasness, recency and problems in interpretation of the result of
performance appraisal. So, these problems limit the full purpose of the performance evaluation
development, reward, motivation, human resource employment planning and compensation
which are the root cause of or employee’s dissatisfaction. .

1.2. Statement of the Problem

Performance evaluation can have many problems in any organization. But the problems are
different from organization to organization because employees of one organization may have
different performance from other organization. When the managers are starting the appraisal
procedure, then there are several problems or obstacle that they have to be overcome. As human
beings, you tend to favor someone and dislike someone, but as a manager you can’t measure or
evaluate someone on the basis of your personal liking or disliking. Instead you must look in to
the performance of employees and rate them fairly. If they have done well their responsibility all
throughout the year, then they deserve to get a good performance rating. No matter how much
you like or dislike him (Lioyd L. Byars and Leslie W. Rue, 1997, Michael Harris, 1997).
Performance evaluation may have many problems like subjection, recency and biasness that
create employee dissatisfaction. These problems may be due to the result of poor performance
appraisal method, poor performance appraisal process, lack of experience in appraisers and so
on. But more or less these problems can affect the initiative and motivation of the employee on
the productivity. Inappropriately evaluated employees are not willing and initiate to perform
their responsibility to achieve the organizations objective. So the appraiser or rater such as
immediate supervisor, peer appraiser, self-rater and committees should be qualified, experienced
and trained in related to performance appraisal system. Most researcher were conduct a research
related to performance appraisal practice, role of performance appraisal to the employee and
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organization, impact of performance evaluation on employee morale and satisfaction. But this
study differs from that study because here the main focus of the researcher is only assessing the
major serious problems that related to employee performance evaluation. All most it is known
that properly and effectively appraised or evaluated employees are very interested and motivate
to perform their responsibility and also they can motivated by their own interest in order get
more recognition, promotion and reward in their career and they can perform activity which
assigned to them more than they expected by their managers in efficient and effectively manner.
Hence, this study tried to answer the following questions in order to arrive at effective and
efficient decision making. Generally the reason that motivates the researcher is to find out the
major serious problems of performance appraisal. .
This study was tirade to addresses the following real problems in the study area.
1. What evaluation standards used by the organization to conduct employees performance?
2. What are the techniques of performance appraisal used by the organization?
3. What is the importance or relevance of performance appraisal for both employee and the
organization?
4. What are the problems of performance appraisal (evaluation)?

5. What should the organization do to solve problem related to performance evaluation?

1.3. Objective of the Study

1.3.1. General Objective

The general objective of this study is to assess problem of employee’s performance appraisal
(evaluation) in case of Arba Minch General Hospital.

1.3.2 Specific Objective

In addition to the above general objective, this study was addressees the following specific
objectives.
 To identify what techniques are used by the organization to evaluate employees
 To find out the problem’s related to performance evaluation
 To identify the relevance of performance appraisal for both employee and the
organization
 To identify the evaluation standard or criteria used to evaluate the employees
performance
 To identify solutions to solve the problem related to performance evaluation

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1.4. Significance of the Study
The study strongly believed to have a significant importance for both organization and for the
researcher. To the organization it will be useful to understand the problems that related to poor
performance appraisal. It will also use to know the relevance of good performance evaluation for
the employee and to the organization. It also used to know how the organization can solve
problems that related to the performance evaluation and also to understand the effect of good
performance appraisal (evaluation) to the employee productivity.
Again this study will have an important significant for the researcher to get knowledge and
experience regarding or related to the performance evaluation also it will be used as a guideline
or source for someone who will conduct a study on the related problem.

1.5. Scope of the Study

The scope of the study is limited only on the assessment of performance appraisal problems in
case of Arba Minch General Hospital. In order to accomplish this study the researcher were use
valuable and more recent information that ranges from 2005 up to 2009.
During data gathering, Daily labor workers and contract employees were not included. This is
because most of the time the only employees being evaluated are permanent employees so that
daily labor employees and contract workers employees may not have a sufficient information
related to performance evaluation.

1.6. Limitation of the Study

Any research undertaken is not without limitation. During conducting this study there were
some limitations that were raised from different directions. Some of them are described as
follow:
 While conducting this research, the researcher was faced some constraint such as
unavailability of sufficient source of data and information, unwillingness of the
respondents to give full information.
 The total questionnaire that was duplicated and distributed to the respondents were not
collected fully due to the carelessness of some respondents.

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1.6. Organization of the Study
The study is organized in to five main chapters. The first chapter is an introductory part, which
contains background of the study, background of the organization, statement of the problem,
objective of the study, significance of the study, scope of the study limitation of the study and
organization of the study. The second chapter were provides review of relate literature. The third
chapter were provides the research methodology, such as research design, sampling technique
and sample size, source of data, data collection method. The fourth chapter was concerned about
presentation and analysis of the data. The last and the fifth chapter was provides the conclusion
and recommendation of the researcher.

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 CHAPTER TWO
2. REVIEW OF RELATED LITERATURE

2.1. Definition of Performance Appraisal

Different authors define performance appraisal in differently and the meaning and understanding
of the term is vary to different individuals. Performance appraisal is the formal, systematic
assessment of how well employees are performing their job in relation to established standards
and the dialogue about that assessment with employees. It is the processes of determining and
communicating to an employee how he or she is performing on the job and ideally establishing a
plan of improvement. When properly conducted, performance appraisals not only yet employees
know how well they are performing but also influence their future level of effort and task
direction. Effort should be enhanced if the employee is properly reinforced (Wendell L. French,
1998, ByarsLoyd. L and Leslie w. Rue 1997, JohnIvancievich1989).

Performance appraisal is a systematic evaluation of employee by some other qualified persons

who is familiar with the employee performance. This definition suggests individuals who involve
in performance appraisal have a necessary training and knowledge about the characteristics of
works and performance level of the employee (Para sand and Banner Pea, 1985).

Performance appraisal is a process of evaluating the performance and qualification of an

employee in terms of requirement of jobs for which he or she is employed for the purpose of
administration including placement, selection for promotion and providing financial reward and
other action which require differential treatment among the number of the groups as distinguish
from action affecting all member equally. This definition indicant there is a common goal to take
a performance appraisal (Rao and Nurayana, 1999).
Performance appraisal is a formal and systematic assessment made in prescribed and uniform
manner in order to evaluate employee performance and then give feedback o the employee
evaluated in order to improve his or her performance or continue in his or her strength(Math and
Jackson,1997).

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2.2. Importance of Performance Appraisal
One of the most common uses of performance appraisal is for making administrative decisions
relating to promotions, firing, layoffs, and merit pay increases. Performance appraisal
information can also provide needed input for determine both individual and organizational
training and development needs. Performance appraisal is used to encourage performance
improvement. In this regard, performance appraisal, are used as a means of communicating to
employees how they are doing and suggesting needed changes in behavior, attitude, skills or
knowledge. This type of feedback clarifies for employees the job expectations held by manager
often this feedback must be followed by coaching and training by the manager to guide on
employees work efforts (Lioyd L. Byars and Leslie W. Rue, 1997, Michael Harris,
1997).Performance appraisal has different common importance. Such as:
 Providing feedback to employees about their performance
 Determining who gets promoted
 Facilitating layoff or downsizing decision
 Encouraging performance improvement
 Motivating employees though recognition and support
 Counseling poor performers
 Determines compensation changes
 Encourage coaching and monitoring
 Determining individual training and development needs
 Determining organizational training and development needs
 Confirming that good hiring decision are being made
 Improving overall organizational performance (Wendell L.French, 1998).

2.3. Performance Appraisal Methods

Whatever method of performance appraisal an organization uses, it must be job related. The
following are some of performance appraisal methods.

2.3.1. Graphical Rating Scale

It is a method of performance appraisal that requires the rater to indicate on a scale where the
employee rates on factors such as quantity of work, dependability, job knowledge, and
cooperativeness. Graphical rating scale includes both numerical ranges and written descriptions.

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The graphic rating scale has some weakness is that evaluators are unlikely to interpret written
descriptions in the same manner due to differences in background, experience and personality.

2.3.2. Check List Method

It is a methods of performance appraisal in which the rater answers with a yes or no a series of
questions about the behavior of the employee being rated. The problem of using checklist
methods is time consuming to assemble the questions for each job category, a separate listing
question must be developed for each job category and the check list questions can have different
meaning for different raters.

2.3.3. Goal setting or Management by Objectives (MBO)

It is a method which requires the managers to set specific measurable goal with each employee
and then periodically discuss his or her progress toward these goals. It consist of establishing
clear and precisely defined statement of objectives for the work to be done by the employees,
establishing an action plan indicating how these objectives are to be achieved, allowing the
employee to implement the action plan, measuring corrective action when necessary and
establishing objectives for the future (H.JohnBernarndin, 2010).
There are so many problems in using MBO. Such as setting unclear and immeasurable objectives
is the main one. And also the MBO method is time consuming. Taking the time to set the
objectives, to measure progress and to provide feedback can take several hours per employee
sometimes turns in to tug of war with the manager pushing for higher goals and the employee
pushing for lower ones.

2.3.4. Work Standard Approach

It is a method of performance appraisal that involves setting a standard or an expected level of
output and then comparing each employee’s level to the standard.

2.3.5. Essay appraisal

It is a methods of performance appraisal in which the rater prepares a written statement
describing an individual, strengths, weakness, and past performance. The primary problem with
easy appraisal is that their length and content can vary considerably, depending on the rater. For
instance, one rater may write a lengthy statement describing employees potential and little about

8
past performance another rater may concentrate on an employee, past performance. Thus easy
appraisal is difficult to compare.

2.3.6. Critical Incident Appraisal

It is a method of performance appraisal in which rater keeps a written record of incidents that
illustrate both positive and negative behaviors of the employee. The rater then uses these
incidents as a basis for evaluating the employee’s performance.
The main drawback to this approach is that the raptors are required to jot down incidents
regularly, which can be burdensome and time consuming. Also the definition of critical incident
is unclear and may be interpreted differently by different people.

2.3.7. Forced – Choice rating

It is a method of performance appraisal that requires the rater to rank a set of statements
describing how an employee carries out the duties and responsibilities of the job. This method
attempts to eliminate evaluation bias by forcing the rater to rank statements that are seemingly
indistinguishable or unrelated. However the force choice method has been reported to irritate
rater who feels they are not being trusted. The results of the forced choice appraisal can be
difficult to communicate to the employees.

2.3.8. Behaviorally anchored rating scale (BARS)

It is a method of performance appraisal that determines an employee’s level of performance
based on whether or not certain specifically described job behaviors are present. Is which focus
on specific job behaviors rather than treats or characters. The use of BARS can result in several
advantages. First, BARS are developed through the active participation of both manager, and
job incumbents. This increases the Likelihood that the method will be accepted. Second, the
anchors are developed from the observation, and experiences of employees who actually perform
the job. Finally, BARS can be used to provide specific feedback concerning an employee, job
performance. One major drawback to the use of BARS is that they take considerable time and
commitment to develop.

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2.3.9. Ranking Methods
Method of performance appraisal in which the performance of an employee is ranked relative to
the performance of others.
(Loyal L. Byars and Leslie W.Rue, 1997, G. Dessler, 1994)

2.4. Potential Error or problems in Performance Appraisals

2.4.1. Halo Effect Error

It occurs when rater allows a single prominent characteristic of an employee to influence his or
her judgments on each separate item in the performance appraisal. Represents the situation in
which the rater generalizes from one aspect of a person’s job performance to all aspects of
performance. For example, the supervisor may rate the “quantity of work” for a person as
“excellent” and then in appropriately rate all other dimensions as “excellent” when they actually
are only “average” or “good”

2.4.2. Leniency error

Occurs in performance appraisal, when a managers rating a grouped at the positive and instead of
being throughout the performance scale is made by appraiser who gives employees higher rating
than they deserve.

2.4.3. Central Tendency error

Tendency of a manger to rate most employees’ performance near the middle of the performance
scales. The central tendency error also occurs on an individual basis if the rater or evaluator is to
rate an employee on numerous performances dimensions and rates all of the dimensions in the
middle of the scale.

2.4.4. Recency Error

Tendency of a manager to evaluate employees on work performed most recently, usually one or
two months prior to evaluation.
(Lioyd L. Byorsand and LeslieW.Rve, 1997, Wendell L Rench, 1998).

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2.5. Overcoming error in performance Appraisals
One approach to overcoming these errors is to make requirement in the design of appraisal
methods, for example one could argue that forced – distribution method of performance appraisal
attempt to overcome the errors of leniency and central tendency. In addition, behaviorally
anchored rating scales are designed to reduce halo effect, leniency, and central tendency errors,
because manager have specific example of performance against which to evaluation an
employee.

A more promising approach to overcoming errors in performing appraisal is to improve the skill
of raters suggestion on the specific training that should be given to evaluators are often vague but
they normally emphasize that evaluators should be trained to observe behavior more accurately
and judge it more fairly. Many suggestions have been offered for making performance appraisal
systems more legally acceptable. Some of these include.

 Deriving the content of the appraisal system from analysis;

 emphasizing work behaviors rather than personal traits;
 ensuring that the results of appraisal, are communicated to employees
 ensuring that employees are allowed to give feedback during the appraisal interview;
 training managers, in how to conduct proper evaluations;
 ensuring that appraisals are written, documented and retained
 Ensuring that personnel decisions are consistent with the performance appraisals

2.6. Purpose of Performance Appraisal

Organizations are using performance appraisal in different way for different purpose. But its
overall purpose is to lay a base for making personnel related decision. The plan and method to be
used are highly depending up on its purpose. The performance appraisal making is used for
administrative and employee development purpose.

2.6.1. For Administration Purpose

Appraisal is for administrative purpose when a manager wants to determine the performance of
employee for salary administrative, promotion, transfer, layoff, termination, demotion and

11
making other administrative human resource planning. The result helps to estimate the quality
and number of personnel required to replace poor performance that are expected to be fired or
demoted. It also help to full fill those positions that are left empty when employee are promoted
or transferred, (Monday, 1990).

2.6.2. For Development Purpose

Performance appraisal help to assess performance strength and weakens and it can be used as
basis of determine training program needs. Identifying area where training is needed can be
facilitated by acquiring information from the appraisal. It is advantageous to train employee for
poor performance rather than firing or demoting them because acquiring new employee to fill the
position may be cost and time consuming. It may also take more effort to familiarizing those new
employees to the organization environment. Training required not only for improving poor
performance of an employee but also facing to assess employees potential for higher and key
position,(Monday et al.1990).

2.7. Requirements for Effective Performance Appraisal System

The key requirements of performance appraisal are relevancy, sensitivity, reliability,
acceptability and practicality. Here under we will look the entire above listed in deep.
1. Relevancy: It implies that there are clean link between performance standards for a
particular job element identify through job analysis and the dimension for rated on appraisal
form.
2. Sensitivity: This also implies that a performance appraisal system is capable of
distinguishing effective from ineffective performance. It is not and the best employee are
rated differently from the worse employees that the appraisal system cannot be used for an
administrative purpose, it certainly will not help employees to develop and it will undermine
the motivation on both supervisor and subordinates.
3. Reliability: It refers to consistence of judgment for any given employee appraisal system
made by a rates working independently one on other should agree closely.
4. Acceptability: In practice acceptability is the most important of all HR programs have
the support of those who will use or else human will be used to worth them. Unfortunately

12
 many organizations have no put much effort in to garnering the truant end support and
participation of those who will use the appraisal system.
5. Practicality: It implies that the appraisal instruments are easy and understandable for man
power and employee to understand and use it.

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 CHAPTER THREE
3. RESEARCH METHODOLOGY

3.1. Research design

In order to accomplish this study, the researcher was used both qualitative and quantitative
research design and also uses descriptive type of research. The main purpose of this study was to
identifying the problems or factors that affecting the employee performance evaluation. The
reason why the researcher was use descriptive type of research is in order to describe the major
serious problems and issues to come up with the appropriate solution.

3.2. Target Population

Permanent employees of the organization in Arba Minch general hospital which accounts 548
were the target population of the study. To accomplish the study daily labor workers and contract
employees were not included because most of the time only permanent employees being
evaluated so that daily labor employee and contract workers may not have sufficient information
in related to performance appraisal. (Human Resource Department of the Hospital).

3.3. Sampling Technique and Sample Seize

3.3.1. Sampling Technique

In order to gathering the relevant and necessary data the research was use a simple random
sampling technique because it gives equal chance for the respondents to being selected as a
sample.

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3.3.2. Sample Size
Due to the unmanageability or large number of employee existing in the organization the
researcher were take a small number of sample representative. The target population of Arba
Minch General Hospital is 548, but the researcher was take only 85 employees as a sample
representative (Human Resource Department in Arba Minch General Hospital, 2009).
n=N/1+n (e) 2
n=548/1+548(0.1)2
n=548/1+548(0.01)2
n=548/1+5.48
n=548/6.48
n=85 where N= Total Population
e=error (10%)
n=sample size
Confidence level = 90%
Source: a formula developed by (Tayro Yamane, 1967).

3.4. Data Source

In order to accomplish the objective of this study the researcher was use both primary and
secondary source of data. The primary data are those which are collected from the permanent
employee of the organization for the first time and thus happen to be original in their character. It
was a bead rock for generalization or conclusion and recommendation of the study and the
secondary data has been collected from different source that has been already existed like book,
journals, internets and other related materials.

3.5. Method of Data collection

In order to collect the primary data the researcher was use both questionnaire and interview. The
questionnaire were organized in to both open ended and close ended form because open ended
questionnaire help the respondents in order to express their idea in unlimited way and the close
ended questionnaire also provide actualize question to the respondent and the researcher also
prepared structured interview to collect the relevant and necessary data from the managers of the
organization. The interview part helps the researcher in order to collect the valuable and

15
necessary data that has been not included in the questionnaire part. The secondary data also has
been collected from different and already existed materials like document review, by referring
preliminary studies on which was conducted related issue etc.
The researcher focuses only on the permanent employees because of the fact that they are
expected to fill the performance evaluation form and have possibility to see the strength and
weakness of the evaluation system. Due to this, they are believed to give the required and
relevant information in more certain reliable manner and they have more access to activities in
improving their performance before and after performance evaluation undertaken.

3.6. Data Presentation and Analysis

After the relevant data has been collected, there were editing, coding and classifying of data to
make it suitable for further presentation and analysis. The collected, processed and organized
data is presented in the form of tabulation and percentage which is based on their
appropriateness to the processed data. Then descriptive method of data analysis would be employ
to examine the finding of the study. The reason that the researcher used descriptive method is in
order to clarify and describe both qualitative and quantitative data; the descriptive method of
analysis is used than other. Then, from the analyzed data the researcher were put conclusion by
summarizing the main points about the study and also forwarded his own recommendation.

3.7. Study Area Profile

Arba Minch is a city in southern Ethiopia the first common name for this city called Ganta Garo
located in the Gamo Goffa zone of the southern nation nationalities and peoples region about 500
km south of Addis Ababa, at an elevation of 1285 meter above sea level. It is the largest town in
Gamo Gofazone as well as Arba MinchWoreda and the second town in SNNPR next to Hawassa.
Arba Minch received its name for the abundant local springs which produces a ground water
forest located at the base of the western side of the Great Rift Valley. Arba Minch consists of the
uptown administrative center of Secha and 4 kilo meter away the down town commercial and
residential areas of Sikela, which are connected by a paved road on the eastern side of Sikela is
the gate to Nechsar national park, which covers the isthmus between lake Abaya to the north and
lake Chamo to the south. Arba Minch is a warm year around with moderate climate during
winter months of July and august. You never fill winter in Arba Minch regardless of severe cold
in the capital Addis Ababa and some other parts of the century, Arba Minch are known as a

16
source for fruit including mango, banana, orange, and an apple and pine apple and is also known
for its fish farming. When we came in to the researcher specific study area, Arba Minch general
hospital is one of the important and lifesaving service provider institutions for the whole society
without any discrimination. It also have a total of 548 employee, of them 350 are men and the
remaining of 198 are women. The main objective of the hospital is to providing health service to
the whole society in order to preserve their health

17
 CHAPTER FOUR
4. DATA PRESENTATION AND ANALYSIS

4.1 introductions

This chapter deals with analysis and interpretation of the data collected fromArba Minch general
hospital which concerned about problems of employee performance evaluation. The organization
has about 548employees of which 350 are male while the rest about 198 are female. This study
was concerned only on the regular employees of the organization because of the permanent
employees have more knowledge and they can provide reliable and relevant information to the
researcher than temporary and daily workers. The findings are made based up on the responses in
the questionnaire filled by employees of the organization. 95 copies of questionnaire were
distributed to the permanent employees of the organization. But out of 95 copies of questionnaire
76(89%) were filled correctly and returned whereas the rest of 9(11%) employees are non-
respondent.

4.2. Analysis of Respondents Personal Profile

The table below represents the demographic characteristics of the sample population which
contains gender, age, marital status and educational level of the respondents.

18
Table1. Demographic Characteristics of the Employee
No Item Response No Of Percentage
Respondents (%)
1 Sex Male 43 57%
Female 33 43%
Total 76 100%
2 Age Below-18 - -
18-30 38 50%

31-40 26 34%
41-50 8 11%
51-60 2 5%
Above 60 - -

Total 76 100%
3 Marital status Single 36 47.5%
Married 32 42%
Divorced 7 9%

Windowed 1 1.5%

Total 76 100%
4 Educational Uneducated - -
status Diploma 7 9%

First degree 43 57%

Master 20 26%

Ph. Degree 6 8%

Other -
Total 76 100%
Source: own questionnaire, (2017).

19
As indicated in the table.1 analysis and presentation made for demographic background
information of the permanent employees of the organization. As in terms of sex distribution on
the above table 1 item one indicating that57%of respondents are male employee and the
remaining of 43% respondents are females. So, on the basis of this information the researcher
can conclude those male employees are dominant or take the major place in the organization than
females in terms of job opportunity. So it is better that the organization empower the female
employees like to males in order to enhance and facilitate the performance of the organization
more.
Regarding Age distribution of the respondents, from the given total respondent of 76 employees
of the organization in Arba Minch general hospital there is no one respondents who is below-18
and while from the total respondents, 50% respondents are between the age of 18-30 years and
the remaining of 34%, 11% and 5% are found between the age range of 31-40, 41-50 and 51-60
years respectively. But there is no one respondents above the age of 60 years. Generally the
result shows that the majority of respondents of the employees are found between the age ranges
of 18-30 and31-40 respectively. So, from this information the researcher can conclude that the
organization have majority of young, more productive and potential employees engaged in the
organization.
In the table 1 on the third item the respondents were requested or asked to tell their marital
status. The data shows that 47.5% respondents are single or unmarried while the rest of 42%, 9%
and 1.5% respondents are married, divorced and windowed respectively. Generally from the
above findings the researcher can conclude that single and married employees of the
organization are almost equal 47.5% and 42% respectively.
Based on the educational status of the employee, there are no respondents who are uneducated.
This implies that all employees of the organization can at least read and write. From the total
respondents of the organization, 9% are diploma holder, 57% respondents are in first degree and
the rest of 26%and 8% respondents are master holder and Ph. degree holder respectively.
Therefore the researcher concluded that based on the educational level of the employee, first
degree holders are dominant or they takes above half parts from the total respondents of
employees of the organization. On the other hand the organization has 26% master holder
employees so it shows the organization have major degree holder employees. This indicates that
the organization have limited master holder.

20
Table2. Practices of Performance Appraisal
No Item Response No of Percentag
respondent e (%)
1 Is their performance evaluation of Yes 63 83%
employee in this organization? No 4 5%

I don’t know 9 12%

Total 76 100%

2 If you say “yes “how often Annually 15 24%

evaluation takes place per year? Semiannually 41 65%
Monthly 3 5%
Quarterly 4 9%
Other r - -

Total 63 100%
Source: own questionnaire, (2017).
Performance appraisal is intended to evaluate the performance and potential of employees.
Moreover, employer or appraisers are more effective if they measure an employee’s performance
item of how well specific job standard are met.
As indicated in the table 2 items 1, 83 % of employees approves the existence of performance
appraisal system in the organization. But the rest5% of them replied that there is no performance
evaluation in the organization. While the remaining 12% of respondents aren’t sure about
whether there is performance evaluation or not in the organization. This indicates that
performance appraisal is not a useless exercise because it provide highly useful
information for making decision about various personal aspect of employees for instance
merit increase or promotions. Performance appraisal determine who shall receive merit
increases counsel employees on their improvement, determining training need,
determining probability identifies the employees to be promoted or rewarded . Generally,

21
based on the above replied information one can conclude that employee performance appraisal is
a crucial and important activities in order to improve the performance of organization as well as
employees to achieving the objectives of the organization.
Again in the table 2 of item 2 shown that the organization evaluates its employee semi-annually,
which accounted 65% and annually which accounted 24% respectively. The rest are evaluated
quarterly and monthly which accounts 5% and 6% respectively. So, based on the given evidence
in the above, the researcher can concluded that most of the time the organization conducts
employee performance evaluation semi-annually in order to improve the organization as well as
the performance of employees. This indicates that performance evaluation is performed in planed
and coordinating manner.

4.3. Evaluation in the Organization

Evaluators are someone who employees based on the performance standards stated to evaluate
the employees.
Table 3.Showing the evaluators in the organization
No Item Response No of respondents Percentage
(%)
1 Have you ever been Yes 68 89%
evaluated?
No 8 11%
I don’t know - -
Total 76 100%
2 If you say “yes” in the Your - -
above question, who was subordinate
evaluate you? Your boss 42 62%
Peers 24 35%
Yourself 2 3%
Other - -
Total 68 100%
3 Who are evaluated in Individual 48 63%
your organization? employee
Department 22 29%
The overall 6 8%
organization
employees
Other - -
Total 76 100%
Source: own questionnaire, (2017).

22
As indicated in the table 3 item 1, from the total respondent of 76, 89% respondents are
responded that they are evaluated. On the other hand 11% of respondentes replied that they are
not evaluated. From this result one can conclude that the majority of employees are evaluated
and it indicates the strongly existance of performance review of the employee in the organization
to improve their performance and productivity.
Bsed on the table 3 of item 2, most of the time employees of the orgnaizaiton are evaluated by
their immediate supervisors (boss) and peers which accounts 62% and 35% respectively. The
restemployees are evaluated by them selfs by comparing their performance with risponsibility
which assignd for them which accounts 3%.So that, most of the employee performance
evaluation in the in the organization are conducted by their immediate supervisors (boss). It
indicate the existance of strong superior-subordinat relationship.
Again according to the table 3 in the third item indicate that 63% of respondents respondedthat
most of the time the organization evaluate individual employees followed by department which
accountes 29%. The rest of respondents are responede that the organization evaluates the overall
system which accountes only 8%. As indicated in the above finding the organization give spcial
attention to evaluat the the individual employees. This implis that

4.4. Impact of Performance Appraisal on employees

Performance evaluation have both negative and positive impacts on employees moral and
satisfaction. Most of the time even if employees perform well, the manner in which the
evaluation is communicated and interpreted can have matteron their moral and satisfaction.If an
employees performance feedback is satisfactory /good they expectpromotion, reward, pay
increase and discipline which is termed as positive impact on performance evaluation. Contrast
to this, if an employee performance feedback result is not that much satisfactory as compared to
performance level actually they perform or do, their boss/evaluator will take some corrective
actions such as demotion, pay decrease /reduction which leads to moral dissatisfaction.

23
Table4. Shows the Impact of Performance Evaluation
No Item Response No of Percentage
respondent (%)
1 Do you think that the Yes 64 84%
standards and No 10 13%
techniques used to I don’t know 2 3%
evaluate you can have Total 76 100%
any impact on you?
2 If you say “yes” for Positive 41 64%
above item, does it have Negative 23 36%
positive or negative Total 64 100%
impact?
3 Employee expectation If Pay increase 6 14%
their performance is Promotion 16 39%
positive Discipline 3 7%
Reward 9 22%
Transfer 2 5%
Other 5 12%
Total 41 100%
4 Evaluation action if Moral dissatisfaction 13 57%
performance of
employee not Pay decrease 2 9%
satisfactory or Demotion 4 17%
negative Disappointment 3 13%
Other 1 4%
Total 23 100%
Source: own questionnaire, (2017).
According to table.4 item 1, the respondents that constitute 84% assured that performance
evaluation have a great impact. But the impact may be positive or negative or both positive and
negative. But the remaining of 13% respondents were denied the impact of performance
evaluation, while the rest 3%of respondents replied that they don’t know the impact of
performance evaluation whether it have positive or negative impact. It indicates that those
respondents have not any know how about the impact of performance evaluation. From this the
researcher can concluded that the majority of employees have a good understanding and know
how about the impact and effects of performance appraisal. But the rest of 3% those who have
not any know how about performance appraisal indicates that their newness to the organization

24
and they have not evaluated before this. Again based on table 4 on the second item the majority
of 64% respondents are replied that the performance evaluation has positive impacts because if
the result of employee performance is satisfactory or positive, 39% of the respondents are expect
promotion in to the higher position from their present position. Again the remaining 22% and
14% of respondents are expecting reward and salary increment respectively. While the rest 12%
of respondents are replied that they will expects different other things like recognition and
appreciation. The rest 7% and5% of respondents are expecting discipline and transfer
respectively.
So that, from this the researcher can conclude that if performance evaluation result is
satisfactory/good or enough, the expectation of employees are promotion and reward which
account 61% together. After taking perfomance evaluation, by promotion and rewarding of the
employees that are good performer/do their work can raise the moral and satisfaction of
empoyees as well as the productivity of the organization is increase.
Again as indicated in table 4, 36% of respondents are replied that performance appraisal have a
negative impact because if the result of performance appraisal is negative or unsatisfactory, 57%
and 17% of respondents are responded that the performance appraisal creates moral
dissatisfaction or psychologically attacked and the manager also take an action of demotion from
their present position to the lower position. The rest 13%9% of employees replied that
unsatisfactory performance appraisal result creates disappointment and also it may leads to pay
reduction. These may be due to the working condition involved the organization policy and if
there is no growth in that organization. While 4% of respondents responded that unsatisfactory
performance result creates so many additional negative impacts like fairing and layoff. But some
employees politely accept the negative result of their performance because they consider it as a
means of tools that indicate their inefficiency and weakness.
Therefore, from the above presented evidence the researcher can conclude most employees are
motivated by positive evaluation results because positive result is an engine in order to increase
motivation level as well as their confidence in order to perform their responsibility above they
are expected to perform. And the negative result is also needed to inspire and motivate the
employees by indicating their weakness and inefficiency.

25
4.5. Role or important of Performance Appraisal
Performance evaluation is really important to the organization in many/every aspects of activities
performed in the organization. The presence of performance evaluation is necessary for both the
organization and the employees, this is because of the fact that employees does not work well to
motivate themselves if performance evaluation is not there. Performance evaluation helps the
organization to identify good performers and poor performers, giving feedback to employees to
they know where they stand, and to design training and development for employees.
Table5. Showing Role of Performance Appraisal to the Organization
No Item Response No of Percenta
respondent ge (%)

1 Do you think Yes 68 89.5%

that performance No 4 5.25%
evaluation
(appraisal) is I don’t know 4 5.25%
necessary to this
Organization? Total 76 100%
2 If you say” yes” Because it help to design 32 47%
in the above training and development
item, why? program
Because it help to work 6 9%
performance
Because it help to improving 2 3%
communication
Because it help to improve 3 4.5%
decision making
Because it help to identify good 5 7%
performer from poor performer?
All are essential to the 20 29.5%
organization
Total 68 100%
Source: own questionnaire, (2017).

As indicated in the table.5, from the total respondent of 76, 89.5% of respondents are responded
that performance evaluation can have a great important. As indicated in table 5, the main purpose
of performance evaluation in organization is to design training and development programs if an
employee’s needs further training or continuing education which account 47% followed by all
other important factors such as to improve work performance, to identify good performer from
poor performer, improving decision making, improving communication and design training and

26
development program which accounts 29.5%.Hence, the main importance of performance
evaluation in this organization is to design training and development programs for employee who
needs additional education and give the development for the good skill employees, to improve
work performance and to identify goods and poor performers. So that performance evaluation
has important for employees and also for organization to increase productivity in effective and
efficient manner.
It indicates that Performance appraisal helps to assess performance strength and weakness and its
can be used as basis of determining training needs. Identifying area where training is needed can
be facilitated by acquiring information from the appraisal. It is advantageous to train employees
of poor performance rather than firing or demoting them because acquiring new components
employee to fill the position may be cost and time consuming. It may also take more effort to
familiarizing those new employees to the organization environment.
Generally, from the table 5 the researcher can conclude that employee performance evaluation is
really important to the organization in different dimensions described above in order to create
close relationship and mutual understanding within the organization.

4.6. Drawback Of Performance Appraisal

The evaluation techniques and standards of performance appraisal have drawbacks or problems
on the performanceevaluation. This is due to the fact thatemployees are not fully agreed up on
the evaluationtechniques and through which they are evaluated.Most of these draws
backs/problems were emanated from the standard used to evaluates employees.
Table.6 Showing Drawback Of Performance Evaluation
Item Variable or No of employees responded Percentage
Alternative to the question

1 Is there any draw Yes 54 71%

backs on the No 12 16%
standardes or I don’t know 10 13%
criteria used for
evaluation of the Toal 76 100%
employee?

27
2 If you say ”yes” in Subjectivity 26 48%
the above question
nomber ten , what Biase 14 26%

kind of draw back?

Erroes in 10 19%
rating
Problems of 4 7%
interpretation
Other - -

Total 54 100%
Sorce: own questionaire, (2017).

As shown in the table 6 in item 1, from the total respondents of 76, 71% replied that the
thecnichues and evaluation criterias have a gereat drawback on them. The rest of 16%
respondents are replied tha the standardes and evaluation criterias have no problems and the
remaining of 13% respondents are responded that they don’t have ay knowlegde whether the
standaedes and evaluation technichues have any impact or problem or not. So this indicates that
those who didn’t know whther it have impact or not, they are a newcomer or still they didn’t
evaluated. This indicates that when the evaluator uses biasful and subjection criteria are the
evaluation becomes less reliable and less valid for decision making regarding to the employees.
Based on table 6 of item 2 shows, 48% and 26% of respondents were responded that the draw
backs/problems of employee performance evaluation in the Arba Minch general hospital were
subjectivity whichaccounts 39.48% and biasness, which accounts 26.3%. The rest are errors in
rating and problems in interpretation which accounts 23.68% and 10.53% respectively.From the
above the researcher can conclude that, the major problems of employee performance evaluation
in these organization were subjectivity and biasness, which account 65.78%together.This indicates
that even if the system is well designed little knowledge and skill on the side of raters can lead to
a serious of problem and error in competing appraisal. From this information the researcher
concluded that unfairness and biasful evaluation decresases employee efficiency and
effectiveness. But , fair evaluation leads to higher performance result and higher motivation even
if the result is negative or positive.

28
Generally, effective and faire employees’ performance evaluation and organizational goal
achievement has a direct relationship. It means that if the evaluation system is well designed and
the appraisers are operated correctly all employees are striving for the achievement of the goal of
the organization and vice versa.

4.7. Important ofperformance Appraisal For Employee

To be effective, employee performance evaluation system should involve employees in the
appraisal process. Since the major goal of performance appreaisal are performance improvement
and beulding desirable work behavior, these goals could not be realized as desired with out the
active participation of emploees.
Table7. Showing important of performance evaluation to the employee
No Item Variable No of Percentage
respondent (%)
1 Do you think that Yes 73 96%
performance No 1 1%
evaluation is really I don’t know 2 3%
important for you? Total 76 100%
2 If you say”yes” Because it hep me to know my 24 33%
what is its streangth and weakness
important? Bcause it help me to get promotion 20 27%
and reward
Bcause it hep to get training for 18 25%
aditional skill
For all purpose 11 15%
Total 73 100%
Source: own questionaire, (2017).
As indicated in the above table 7of first item,96% of respondents are assured that the real
important of performance appraisal for them for different purpose. This implise that all most all
of the respondents bileve that performance evaluation have great significance to improve their
performance to be fruit full in their working area.

29
Again the above table 7 of the second item shows, from the respondents of 73, 33%, 27% and
25% of respondents responded that performance appraisal is important for them because it help
to know their strength and weakness, to get promotion and reward and go get training further
skill development respectively. The ramaining 15% of respondents are replide that performance
appraisal isimportant to get all advantages listed in the above table.

4.8. Analysis and interpretation made for open indeed question related
to performance evaluation problem and its resolution method
As the researcher has been describe in earlier, the researcher were use this open ended
questionnaire because it helps the respondents to express their idea in unlimited way what they
want to tell.
Since performance appraisal is conducted by human being, it is subjected to a number of biases,
errors, weaknesses and pitfalls. There are different kinds of appraisal problems, but as a manager
we should have to overcome and avoid all of them for the wellbeing of our organization as well
as for our employees. So, if we can avoid those problems, then our employees become motivated
and they will give us their full talent and experience to perform their responsibility more than
they are expected to perform.
Generally, as the respondents are replied that there are different major serious problems related
to performance evaluation like most of the time performance appraisal assesses only individuals
but it doesn’t assess the overall or groups, the evaluators are not trained or poorly trained
evaluators, some evaluators make unfair decision by focusing recent behaviors of the employees
but not consider their former performance, there is no standard based and job related
performance assessment and sometimes evaluators comparing the performance of employees
with other organization employees rather than comparing with the stated standards and
responsibilities assigned to the employee.

The managers or evaluators should make sure that he or she do the right performance appraisal in
a correct manner and then take corrective action if there is any deviation, then after it yields right
and desired fruits for the organization.
According to the respondent’s response, in order to overcome or eliminate the problems that
related to performance evaluation, the respondents were replied different points as a solution like
giving training to the evaluators or supervisors in order to reduce errors that related to

30
performance appraisal like recency, the appraisal should be linked to the job. It means the
appraisal should be related to the job that has been assigned to the employees, designing clear
and easily understandable performance appraisal system, the evaluator should be evaluate the
groups or departments because if individuals are evaluated and rewarded always they may run
only for their personal benefit rather than doing for mutual benefit and evaluating the employees
based on the given standards rather than comparing them with others because if the evaluator
comparing the employee with other organizations employee the evaluator may rank wrongly the
employee even if he or she perform his or her duty well.

4.9 Analyze on general interview question related to evaluation

technique and standards
An interview was made with manager of the organization in order to collect the second first hand
data related to evaluation criteria and performance measurement technique. According to the
response of the manager, the organization used graphic rating scale evaluation technique to
measure the performance of employees because it help the manager to express gap that exist
between the employee and it also help to express the result quantitatively. As replied by the
manager of the organization, the organization measures the performance of the employee based
on the number of performance dimension or stated standards such as accuracy, completeness on
time, interpersonal skill, knowledge, punctuality, and communication skill.
Generally, why the organization adopt graphic rating scale evaluation technique because it not
measure only the contribution of individuals to the success of the organization, but it also
evaluate the personal behavior of each and every employee within the organization.

31
 CHAPTER FIVE
5. CONCLUSION AND RECOMMENDATION

5.1 Conclusion
After data presentation, analysis and interpretation a researcher summarize about the problem of
employees performance evaluation and its impact ton employees moral and satisfaction of
employees.
Based on the above information he majority of the employees in the organization are male. The
majority of employees in the organization are between the ages intervals of 18-30 which
accounts 50%. It implies that the organization have young, more productive and potential
employees. Based on the previous analysis the majority of employees of the organization are first
degree holder. The majority of employees in the organization are evaluated individually.
Based on the previous finding the organization conducts employee’s performance evaluation
semi-annually by their immediate supervisors (boss).
As indicated in the analysis part of the study responded by managers of the organization, the
organization used mostly graphic rating scale evaluation techniques to evaluate employees. The
evaluation standards that the organization used to evaluate the work of employees are accuracy,
clarity, completeness on time and punctuality.
There are problems in evaluating employee which comes from poor evaluations standards and
techniques. The major problems of employee’s performance evaluation in this organization were
subjectivity and biasness, which account (75%). According to employees responded in the
questionnaire, these problems was due to the fact that evaluators are not well trained on how to
evaluate and rate performance of their subordinate employees. If performance evaluation result is
satisfactory/good the expectation of employees are promotion and reward, but if it is not
satisfactory the expectation of employees are moral dissatisfied and demoted was force to leave
the organization.
The importance of performance evaluation in this organization is for the purpose of design
training and development programs for employees who needs additional education and give the
development for the good skill employees, to improve work performance and identify goods and

32
poor performers. So that performance evaluation has important for employees and also for
organization to increase productivity.
The study had been conducted mainly to assess the problem of employee performance evaluation
in the factory and find out the management to take corrective actions so as to minimize the
severity of the problem. More analysis and discussions were presented in the analysis section.
Here only important and major findings are presented by referring the previous sections.
The implementation of employee performance evaluation in a proper manner has a valuable
effect on the overall organizational objectives as well as on employees day to day activities
performed in the organization.
Performance evaluation can have both positive and negative impact ton employee’s moral and
satisfaction. If performance evaluation is satisfactory /good, employees would have a change to
get promotion, salary increments, reward (which could be financial as well as psychological
reward) which can be viewed as positive impact. On the other hand, it is negative impact when
performance evaluation feedback is not that much satisfactory. The negative impacts of
performance evaluation are salary reduction, demotion and morally dissatisfied. This is a
waste/loss to the organization which restricts the full purpose of achieving organizational
objectives through the use of qualified and motivated manpower.
Generally performance evaluation have different important for the individual employees in
different dimensions such as to know their weakness and strength, to get promotion, reward and
training to develop their skills to do more for their as well as for organizational achievement.
Performance evaluation also has different importance to the organization for different purpose
like to designing training and development programs, to improving working performance,
identifying good and poor performance and to strength superior – subordinate relationships
within the organization.

33
5.2. Recommendations
Having concluded the study the researcher would like to recommend some points to be applied
by the organization in order to solve problems concerning about employee performance
evaluation. So, points that are recommended are forward as follows:
1. As stated in the previous analyses the organization have not evaluated its employee
based on the given standard and job which have been assigned to each employee. So it
is better that the organization evaluate each employees based on the job description
given to each employee and the criteria for evaluation as well as it is better that the
evaluation is based on objective evaluation format rather than` using subjective
evaluation which can be a solution to avoid performance evaluation problems that
observed in the organization like subjectivity, bias, and problems in interpretation.
2. Based on the previous finding the major problems of employee’s performance
evaluation are subjectivity and biasness. So it is better that the organization have to
evaluate its employees through a committee of supervisors rather than a single evaluator.
This approach has the advantage of offsetting bias and subjectivity on the part of one
supervisor and adding additional information to the evaluation especially if it follows,
meeting format.
3. The evaluators are not well trained on how to evaluate and rate performance of their
employees. So, it is better that evaluators of the organization have to take a training
program concerning about employee performance evaluation on how to evaluate and
interpret the result and purpose of performance evaluation.
4. As indicated in the previous analysis the organization mostly focuses on individual
employee evaluation. So, it is advisable to the organization to continue evaluating the
performance of individual employees rather than evaluating teams because if the
organization gives great attention to evaluate the team, social loafing may be occurring.
But it does not mean that totally ignoring team evaluation but it is better that the
organization seen as a complementary.
5. Sometimes evaluator’s are evaluating employees based on recent behavior of employee.
So, it is better that the evaluators note the activity of each and every employee and
evaluating them based on the recorded evidence. The strong side of the organization that
after they are evaluates their employees, the employee which has good performance got

34
promotion and reward; these are motivating the other employee to do their work
effectively.

35
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Parasand and Banner Pea. (1985). Human resource management, 4th edition

Byarlioyd and W. Rive. (1994). Human Resource Management, 4th edition Vonhoff Man press
USA

G, Dessler. (1994). Human Relation in Management. London, Glencoe.

Harris, David.M (1994). Human Resource Management.4thEdition.Harcourt.

Donal, R. Cooper. (1996). Business Research Method.

Jill Hussey. (1997). Business Research. Practical GuideforUndergraduate students.

LioydL.Byars. (1997).Human Resource Management. 5th Ed9ition, London.

Michael harries (1997), Human Resource Management. 4th Dryden press

John Ivancivich. (1998). Human Resource Management, 7th Edition

Wendell L.Frecnh (1998), Human Resource Management, 4th edition French –

Boston Hougton, Mifflin Co.

H, John Bernerndin. (2010). Human Resource Management. 5th Edition, Indian

36
 APPENDIX I
ARBA MINCH UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENTS OF MANAGEMENT

Questionnaire

Dear respondents, I am conducting a research on the “assessment of performance appraisal

problem in case of Arba Minch general hospital” for the purpose of partial fulfillment of the
award of bachelor of art (BA) degree in management. So I am kindly requesting you to give your
accurate and relevant information which is the most valuable input for my study. Therefore, I
hope that you will answer questions frankly and your response will be kept confidential.

Thank you in advance for your cooperation!!

Instruction

 No need of write your name

 Put () mark inside the box proved you or circle your answer from the given alternatives
 Write neatly and with clear writing question that are constructed with open-ended
question
 Please answer the question in attentive manner because it is very essential for the success
of the study

Part- I: Personal information related question

1. Gender: A. Male B. Female

2. Age: A. below 18 D. 41-50

B. 18-30 E. 51-60

C. 31-40 F. above 61

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3. Marital Status: A. Single B. Married C. Divorced
D. Windowed

4. Educational Status: A. Uneducated B. Diploma C. First Degree

D. Master E. Ph degree if other specify _____________

Part – II: Research related questions

1. is their performance evaluation of employees in your/this organization?

A. Yes B No C. I don’t know

2. If you say “Yes” in question number 1, how often the evaluation takes place per years?

A. Annually B. Semi-Annually C. Monthly D. Quarterly Other Specify

__________

3. Have you ever been evaluated?

A. Yes B. No C. I don’t know

4. If you say “Yes” in question number 3, who was evaluate you?

A. Your Subordinator B. Your boss C. Peers D. Yourself Other

specify _____

5. Who are evaluated in your organization?

A. Individual employee B. Department

C. The overall organization employees other specify______________________

6. Do you think that the techniques and standards used to evaluate you can have any impact?

A. Yes B. No C. I don’t know

7. If you say “Yes” for question number 9, does it have positive or negative impact?

A. Positive B. Negative

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If positive

A. Pay increase B. Promotion C. Discipline

D. Reward E. Transfer Other specify ________________

If negative

A. Leads to dissatisfaction B. Pay decrement(decrease)

C. Demotion D. Disappointment Other

specify_________________

8. Do you think that performance evaluation or appraisal is necessary to this organization?

A. Yes B. No C. I don’t know

9. If you say “Yes” for question number 11 why?

A.

10. Is there any draw back on the techniques and standards used for evaluation of the
performance?

A. Yes B. No C. I don’t know

11. If you say “Yes” what kind of draw back?

A. Problem of interpretation C. Subjectiveness/subjectivity/

B. Error in rating D. Business

Other specify ____________________________

12. Do you think that performance evaluation is really important for you?

A. Yes B. No C. I don’t know

13. If say “Yes” what is its important?

A. Because it help to know my strength and weakness

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Because it helps to get promotion and reward

Because it helps to get training for additional skill

D. All of the above are important

14. What are the problems related to performance evaluation? At least list two problems.

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

15. What the organization should do to solve the problems that related to performance appraisal?
At least list two solutions.

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 Appendix II
ARBA MINCH UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

Interview questionnaire

Dear Manager, I am conducting a research on the “assessment of performance appraisal

problem in case of Arba Minch general hospital” for the purpose of partial fulfillment of the
award of bachelor of art (BA) degree in management. So I am kindly requesting you to give your
accurate and relevant information which is the most valuable input for my study. Therefore, I
hope that you will answer questions frankly and your response will be kept confidential.

Thank you in advance for your cooperation!!

Instruction

 No need of write your name.

 Put () mark inside the box proved you or circle your answer from the given alternatives
 Write neatly and with clear writing question that are constructed with open-ended
question.
 Please answer the question in attentive manner because it is very essential for the success
of the study.

1. What evaluation techniques /method/ do you use to evaluate your employees?

2. What standards do you use to evaluate your employees?

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