ST/MARY’S UNIVERSITY

FACULTY OF BUSINESS
DEPARTMENT OF MANAGEMENT

AN ASSESSMENT OF EMPLOYEE PERFORMANCE

APPRAISAL PRACTICE: THE CASE OF ETHIOPIAN
TEXTILE INDUSTRY DEVELOPMENT INSTITUTE

BY
MISRAK BEKELE

June, 2014
SMU
Addis Ababa

1
AN ASSESSMENT OF EMPLOYEE PERFORMANCE APPRAISAL
PRACTICE: THE CASE OF ETHIOPIAN TEXTILE INDUSTRY
DEVELOPMENT INSTITUTE

A SENIOR ESSAY SUBMITED TO THE DEPARTMENT OF

MANAGEMENT

BUSINESS FACULTY
ST/MARY’S UNIVERSITY

IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE

DEGREE OF BACHELOR OF ARTS IN MANAGEMENT

BY
MISRAK BEKELE

June, 2014
SMU
ADISS ABABA

2
 ST/MARY’S UNIVERSITY

AN ASSESSMENT OF EMPLOYEE PERFORMANCE APPRAISAL

PRACTICE: THE CASE OF ETHIOPIAN TEXTILE INDUSTRY
DEVELOPMENT INSTITUTE

BY
MISRAK BEKELE

FACULTY OF BUSINESS

DEPARTMENT OF MANAGEMENT

APPROVED BY THE COMMITTEE OF EXAMINERS

Chairperson Signature

Advisor Signature

External Examiner Signature

Internal Examiner Signature

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 ACKNOWLEDGEMENTS

First of all I would like to express my great appreciation to my advisor Ato

Yimer Adem for his genuine advice, guidance, constrictive criticism and all
sided contribution to the successful accomplishment of the study. I convey my
gratitude to the employee of Ethiopian Textile industry Development Institute
who shared their time filling the questioner and also the management staffs in
providing information during interview.

Furthermore, I would like to thank all those who contribution in constrictive

comment & editing the final paper by Ato Abera Dinka.

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 Table of Contents

ACKNOWLEDGEMENTS ........................................................................................ i

Table of Contents .................................................................................................. ii

List of Tables........................................................................................................ iv

CHAPTER ONE ..................................................................................................... 1

1.1 Background of the study ................................................................................. 1

1.2 Statement of the Problem ................................................................................ 3

1.3 Research Question .......................................................................................... 4

1.4 Objectives of the study .................................................................................... 4

1.4.1 Specific objectives of the study are to: ...........................................................................4

1.5 Significance of the Study ................................................................................. 5

1.6 Scope (Delimitation) of the Study..................................................................... 5

1.7 Research Design and Methodology .................................................................. 5

1.7.1. Research Design .....................................................................................................................5

1.7.2. Population and Sample Size & Sampling Techniques ............................................6

1.7.3. Types of Data Collected .......................................................................................................6

1.7.4. Methods of Data Collection................................................................................................7

1.7.5. Method of Data Analysis .....................................................................................................7

1.7.7. Organization of the Study ..................................................................................................7

CHAPTER TWO ..................................................................................................... 8

2.1 Meaning and Definition of Performance appraisal ............................................ 8

2.2 Uses of Performance Appraisal ........................................................................ 9

2.3 Performance Appraisal process ...................................................................... 10

2.4 Approaches of Performance Appraisal ............................................................ 12

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2.5 Performance Appraisal Criteria ...................................................................... 13

2.6 Methods, techniques and tools ...................................................................... 14

2.6.1 Traditional Methods of Appraisal ...................................................................................15

2.6.2 Modern Methods of Appraisal ..........................................................................................16

2.7 Effectiveness of Performance appraisal systems ............................................. 18

2.8 Factors Influencing the Effectiveness of performance appraisal...................... 19

CHAPTER THREE ............................................................................................... 23

3.1. Findings on General information .................................................................. 23

3.2. Findings on Performance Appraisal Practice: ................................................ 24

CHAPTER FOUR ................................................................................................. 35

4.1 Summary of Findings .................................................................................... 35

4.2 Conclusions .................................................................................................. 36

4.3 Recommendation .......................................................................................... 37

BIBLOGRAPHY ................................................................................................... 39

Appendices

Questionnaire ....................................................................................................... a

Interview Question ................................................................................................ e

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List of Tables

Table 1. General Information about respondents ………………………………….. 23

Table 2. performance appraisal measurement criteria …………………………… 25

Table 3. performance appraisal usefulness …………………………………………. 26

Table 4. Who conduct performance appraisal practice……………….…………… 27

Table 5. Interval of performance appraisal takes place …………….…………….. 27

Table 6. Response to criteria’s performance appraisal …………………….……… 28

Table 7. performance appraisal criteria’s related to their work ………………… 28

Table 8. Response to performance appraisal takes

place on well organized data of the employee ………………………….. 29

Table 9. Satisfaction level on the current general performance

appraisal process ………………………………………………………………. 30

Table 10. Response whether high performers are distinguished

from low performers ………………………………………………………… 30

Table 11. How effective employee performance appraisal process …………….. 31

Table 12. To what extent employees trust your appraiser ………………………. 31

Table 13. How management communicates performance

appraisal result ………………………………………………………………. 32

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 CHAPTER ONE
INTRODUCTION

1.1 Background of the study

In public organizations of the developed countries like United States of America
modern performance appraisal tools being implemented since early of 1990
(Carter, 1991: 213). In recent period like business process reengineering,
balanced score card and to some extent kaizen comes to execution. During this
processes evaluating employee performance is the central idea. Performance
measurement in the private sector is in general seen as something normal, the
assumption being that the private sector is permeate with a performance-based
culture, conventional wisdom suggests that there are special characteristics of
the public sector which make performance measurement inappropriate or, at
least, very difficult. Two explanations are commonly used to explain the
differences in public/private performance measurement. The first assumes that
private firms putatively adhere to bottom-line profit requirements; performance
measurement is a straightforward and contestable technical procedure. The
second argument focuses on the particular social and political pressures on
public sector agencies. Public services operate with a fixed budget and
consumer groups are in competition with each other for scarce resources. The
market solution to this situation is to introduce the user pays principle in
selected public services so that users of a service are the actual people paying
for that service. But the imperative of the welfare state precludes this market
option from economic textbooks Carter (1991: 213).

Three major trends in performance measurement (1) the development of

measurement systems which enable comparisons of similar activities across a
number of areas (benchmarking instruments, such as citizens charters and
quality awards); (2) efforts at measuring customer satisfaction (citizen surveys;
output as indicators, such as the number of complaints; and throughput

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measures such as indirect proxies for measuring direct impact of programs on
clients); and
(3) Some lessening in the focus on the long-term impact of programs,
particularly in evaluating such programs.

In Ethiopian Textile Industry Development Institute this process are takes

place by developing system which helps to evaluate the employee performance
that is balanced score card (BSC). The major supporting department
Performance Improvement and Human Resource Directorate; has the duties
and responsibilities of evaluating employee performance. ETIDI semiannual
bulletin (vol. 2 no.3:2)

Despite of this Textile Industry Development Institute is established on the 7th

June 2010 pursuant to Council of Ministers Regulations No.180/2010. It is
established to provide the required developmental support to those who have
been engaged and wishing to engage in the textile sector business. And to
closely coordinate and support the sector is development in the framework of
one-stop-shop services.

The Institute is one of the catalysts towards achieving the textile industry sub-
sector’s goals set by the Government in its Five Years Growth and
Transformation Plan (GTP). The plan eyes on generating one billion US dollars
from export of textile products by the end of 2015 which would be a leap from
23.2 million US dollars registered in 2010.

To achieve this goal the institute organizes its 200 employee into two broad
categories line and supportive directorate. Line directorate holds Garment
Technology, Engineering, and Waiving, Finishing, Knitting and Marketing
directorates. Supportive also include Director General, Planning, Finance,
System improvement & Human Resource, Registrar, Laboratory and Corporate
communication. A more concerted effort of all stakeholders backed by the
necessary investment promotion, communication and public relation activity

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among other things would ultimately be paramount important to meet up the
goals. ETIDI semiannual bulletin (vol. 2 no.3:2)

1.2 Statement of the Problem

Performance appraisal is one of the important components of the rational and

systematic processes of human resource management. There will be
professional assumption that if performance appraisal is conducted
appropriately & its results communicated to employees effectively then it will
improve performance of employees and hence the performance of organization.
Ethiopian Textile Industry Development Institute has performance appraisal
policy, the policy has procedures on the process of the performance appraisal
of employees, but it has been regularly observed that there are unanswered
question raised each and every day on the areas related to the relevancy,
reliability, sensitivity, fairness, uniform participation of employees in the
process and full utilization of the performance appraisal results for the well
being of the employees as well as for the organization. The upshot of the
appraisal process stand for further measures taken by the management like:
employee salary increment, demotion & training selection criteria. While an
exclusive interview conducted with ethics and compliance officer also assures
that the above questions are frequently reported to the department. Hence, for
the aforementioned reasons I am encouraged to conduct a survey on the
assessment of performance appraisal practice of Ethiopian Textile Industry
Development Institute. The research were designed to answer issues directly
related with the performance appraisal in Ethiopian Textile Industry
Development Institute based on the following area of the research problem.

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1.3 Research Question

In order to find solution for the existing problems, the following basic questions
were treated.

1. What are the problems in executing the performance evaluation?

2. To what extent the techniques implemented by the institute for

measuring the performance are reliable, faire or sensitive?

3. What is the attitude of employee on the existing performance appraisal

throughout the institute?

4. How the institute uses performance appraisal result?

5. What measures’ taken to appropriately communicate the performance

appraisal to its employee

1.4 Objectives of the study

The main objective of this study is to assess the performance appraisal of

Ethiopian Textile Industry Development Institute.

1.4.1 Specific objectives of the study are to:

assess problems in executing the performance evaluation

assess the techniques which are implemented by the institute for

measuring the performance are reliable, faire or sensitive

assess the attitude of employee on the existing performance appraisal

uniformity throughout the institute

assess the institute utilization of performance appraisal result

evaluate how performance appraisal results communicate to the

employee

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1.5 Significance of the Study

This study serves as a partial fulfillment for bachelor degree in management.

Secondly it may help the organization to see its strength and weakness on
employee performance appraisal. The concerned personnel’s of the institute
can make corrections which are going to be identified and dealt in order to
improve the efficiency of their performance appraisal. In addition it serves as
benchmark for other researchers who are interested for further study in the
same topic. Also it assists the readers to simply understand how the
performance appraisal practice is undertaken in the institute and for what
motive do the output of evaluation is used.

1.6 Scope (Delimitation) of the Study

This study is conducted on performance appraisal practice of Ethiopian Textile

Industry Development Institute. Ethiopian Textile Industry Development
Institute is established in 2002 E.C. Now it has four years practical experience,
due to the absence of performance appraisal practice in 2002 we use data
starting from 2003E.C. The study is delimited in evaluating and assessing the
overall performance appraisal of the institute by taking three consecutive years
i.e. 2003, 2004 and 2005 E.C individual performance appraisal data of the
institute. The study was carried out in head office located at Addis Ababa
namely Akaki Kaliti Sub City.

1.7 Research Design and Methodology

1.7.1. Research Design

A general plan or strategy for conducting the research study, this research
was used descriptive research design for the reason that it makes the
entire survey more flexible, efficient and economical and at same time
describe the existing situation as it appears. It gives the opportunity to use
both quantitative and qualitative data in order to find data and
characteristics about the population or phenomenon that have been

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 studied. The data collection for descriptive research also presents a very
multifaceted approach including surveys.

1.7.2. Population and Sample Size & Sampling Techniques

To provide adequate data for analyzing the various sub population of the
organization Stratified Random Sampling Method was used. The population
which the sample to be drawn are heterogeneous on the activity, so
stratified sampling was used to obtain representative sample size. To
determine the proportional sample size the total population was divided in
to two strata (sub population) namely Line Directorates and Supportive
Directorates. Sample respondent were selected by using a Systematic
Sampling Technique. Out of the entire population of 200 employees sample
size of 60 are made which represent 30% of the population. For each
sample element will be selected in every 3 sample interval (200/60).

Directorate Number of Sample size Sample element

population
Line 83 30% 25
Supportive 117 30% 35
Total 200 60

1.7.3. Types of Data Collected

The research used both primary & secondary data. The primary data
sources comprise First hand data obtained from employee and managers.
Secondary data incorporated all type of internally generated documents
from the internal sources & supplementary information’s such as personal
files and annual organizational performance reports.

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1.7.4. Methods of Data Collection

Both primary and secondary source of data were used in this study. The
primary data was gathered via questionnaire from selected employee.

Likewise, the secondary data were obtained from books, HR manuals,

internet and other materials related to the research topic available in the
library using document analysis method.

1.7.5. Method of Data Analysis

The data obtained through questionnaire was analyzed quantitatively in

quantitatively Percentage cross tabulation a descriptive statistics were
employed for data collected by closed ended questionnaire. And the data
obtained through interview were analyzed qualitatively.

1.7.6. Limitation of the Study

This study has a number of its own limitations. Lack of awareness- affects
the accuracy and dependability of the information gathered from the
respondents to some extent. Unwillingness to fill and return questionnaires
on time was the major limitations of this study.

1.7.7. Organization of the Study

The study consists of four chapters. Chapter one deals with introducing the
problem, whereby, back ground and statement of the problem; objectives,
basic questions and significance of the study; scope & delimitations and
organization of the study are included. Chapter two is left to the review of
the related literature so as to put the theoretical foundations of the study.
Chapter three treats the analysis and interpretation of the data gathered.
Chapter four presents the summary of major findings, conclusions drawn
upon the findings, and possible recommendations.

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 CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 Meaning and Definition of Performance appraisal

Performance appraisal means the systematic evaluation of the performance of
an employee by his/her superiors. It is a tool for discovering, analyzing and
classifying the differences among workers in relation to job standards. It refers to
the formal system of appraisal, in which the individual is compared with others
and ranked or rated. Generally, appraisal is made by the supervisor or
manager once or twice in a year. (Joshi, 2010: 64). Subsequent to defining
performance appraisal one has to know what Performance management is,
therefore according to Armstrong (2009: 123), Performance management is a
systematic process for improving organizational performance by developing the
performance of individuals and teams. It is a means of getting better results by
understanding and managing performance within an agreed framework of
planned goals, standards and competency requirements. Performance
management is concerned with aligning individual objectives to organizational
objectives and encouraging individuals to uphold corporate core values;
enabling expectations to be defined and agreed in terms of role responsibilities
and accountabilities (expected to do), skills (expected to have) and behaviors
(expected to be); providing opportunities for individuals to identify their own
goals and develop their skills and competencies. Armstrong,(2009:124)
technological changes. Encouraging development of all employees including
supervisors and managers is necessary to performance appraisal organizations
for future challenges. Career planning identifies performance appraisal and
activities for individual employees as they develop within the organization.
Assessing how well employees are doing their jobs is the focus of performance
appraisal Mathis and Jackson, (1997:17). Furthermore, Gomez-Mejia & et.al.
(2005:225), stated that “performance appraisal as the process of identification,
measurement, and management of human performance in organization.”

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Therefore, to make these effective organizations should develop a system that
serve as a tool to performance appraisal process.

2.2 Uses of Performance Appraisal

The use of Performance appraisal is elaborated by Mullins (1996: 367) as a
formalized and systematic appraisal scheme can also form the basis of a review
of financial rewards and planned career progression. Performance appraisal is
therefore, a crucial activity of the personnel function and the management of
human resources. Also, the use of Performance appraisal discussed by
Henenman (1996: 423) as Performance appraisal is used to identify the
dimension of performance, and also to set standards of contributions for each
performance dimensions step. And also Mondy, Noe and Premeaux (1999: 361-
383) stated as: virtually every American business firm is affected by global
competition. For survival and Ethiopian Textile Industry Development Institute
cases, it is imperative that these organizations remain competitive. Continued
competence can only be maintained ceaseless development of human
resources. A potential mechanism for this growth is employee “Performance
appraisal”. Mathis and Jackson (1997: 344) finally discussed about the role
(use) of Performance appraisal as follows. “Performance appraisal has two roles
in organizations.
One role is to measure performance for rewarding or otherwise making
administrative decisions about employees. Promotions or layoffs might hinge
on these ratings making them difficult at times. Another role is development of
individual potential. Different institutions/ organizations use Performance
appraisal for different purposes as different scholars stated. The following are
some Examples: Managers often believe that the most significant Performance
appraisal outcome involves the contributions employees make to the
organizations goal attainment. Higher performing employee’s Ethiopian Textile
Industry Development Institute successfully meets their responsibilities and
thereby make a contribution to the goals of the organization. Mullins (1996:
339:341). Performance appraisal is a vital component of a broader set of

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human resource practices; it is the mechanism for evaluating the extent to
which each employee’s day-to-day performance is linked to the goals
established by the organization (Coutts and Schneider, 2004: 213). According
to Armstrong (2000: 126), a Performance appraisal function is a continuous
and evolutionary process in which performance improves over time. It provides
the basis for regular and frequent dialogues between managers and individuals
about performance and development needs based on feedback and self-
assessment. It is mainly concerned with individual performance but it can also
be applied to teams.

According to Gomez-Mejia et.al (2001: 226), Organizations usually conduct

appraisals for administrative and/or developmental purposes. Performance
appraisals are used administratively whenever they are the basis for a decision
about the employee’s work conditions including promotions, termination and
rewards. Development uses of appraisal which are geared toward improving
employees performance strengthening their job skills, including counseling
employees on effective work behaviors and sending them for training. The
major functions of Performance appraisal are to give employees feedback on
performance, to identify the employees developmental needs to make
promotion and reward decisions, to make demotion and termination decisions
and to develop information about the organizations selection and placement
decisions, as Nelson and et al. (1997: 345-346).

2.3 Performance Appraisal process

The performance appraisal process is one of the human resource activities in
government and private organizations of Ethiopia. The practice and process of
the performance appraisal in any government employees under Federal Civil
Service is according to the proclamation No. 262/2002 declared in chapter
four, stating that the federal civil servants proclamation performance
evaluation purpose is to enable civil servants (a) effectively discharge their
duties in accordance with the expected level quality standard time; (b)-identify

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their strengths and weaknesses: (c) improve their future performances and
develop self initiative. (2) Performance evaluation shall be trans performance
appraisal rent and shall be carried out with the collective performance
appraisal of-civil servants working together. (3) Performance evaluation shall be
carried out in accordance with, directives issued by the Commission. This
proclamation works for ETIDI employee’s performance appraisal. In the books
of human recourse management 2010, 68) there are serious of Steps in
Appraisal process. The process of performance appraisal follows a set pattern,
viz., an employee’s performance is periodically appraised by his superiors. The
following usually form the main steps of an appraisal program:

Step-1: Establish performance standards: At the time of designing a job and

formulating a job description, performance standards are usually developed
for a position. These standards should be clear, and objective enough to be
understood and measured. Weights and points are to be given to each factor
of these standards and should be indicated on the appraisal form. These are
used for appraising the performance of the employees.
Step-2: Communicate performance expectation to employees: It is difficult
for employees to guess what is expected of them. Hence the standards of
performance should be communicated to the employees. To make
communication effective, feedback’ is necessary from the subordinates to the
manager. Satisfactory feedback ensures that the information communicated
by the manager has been received and understood in the way it was
intended.
Step-3: Measure actual performance: To determine what actual
performance is, it is necessary to acquire information about it. We should
be concerned with how we measure and what we measure. Four sources of
information are frequently used to measure actual performance: personal
observation, statistical reports, oral reports and written reports.

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Step-4: Compare actual performance with standards: The employee’s
appraisal is done and he/she is judged in terms of potential for growth and
advancement. Attempts are made to note the deviations between standard
performance and actual performance.
Step-5: Discuss the appraisal with the employee: The results of the
appraisal are discussed periodically with the employees where strong points,
weak points, and difficulties are indicated and discussed so that performance
is improved. The information that the subordinate receives about his/her
assessment has a great impact on his subsequent performance. Conveying
good news is easy for both manager and subordinate but it is considerably
difficult when performance has been below expectation.
Step-6: Initiate corrective action, if necessary:
Corrective action can be of two types. One is immediate and deals mainly with
symptoms. The other is basic and looks deep into the causes. Immediate
corrective action is often described as “putting out fires”, whereas basic
corrective action gets to the source of deviation and seeks to adjust the
difference permanently. Counseling may be done or special assignments may
be set, people may be deputed for formal training courses, and decision-
making responsibility and authority may be delegated to the subordinates.
Attempts may also be made to recommend for salary increases or promotion, if
it is required in the light of appraisals.

2.4 Approaches of Performance Appraisal

Numerous techniques for measuring performance have been developed over the
years. According to Gomez-Mejia (2001: 228), Techniques of measuring
performance of employees involve wide array of appraisal formats from which
to choose. Here we discuss the formats that are most common legally
defensible. These formats can be classified in two ways: (1) the type of
judgment that is required (relative or absolute), and (2) the focus of the
measure (trait, behavior, or outcome). Performance appraisal roots in the early
20th century and its existence consists of different approaches in its history.

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The three approaches that deal with Performance appraisal are presented
below. (Henenman and et.al. 1997: 331)

The traditional trait rating scale approach: involves rating an individual’s

personal traits or characteristics. Commonly assessed traits are: initiation,
decisiveness and dependability. Although the trait approach is widely used by
managers and it is generally considered by experts to be the weakest. It
contains different method during application.

Behaviorally anchored rating scale approach: is done on job –by-job basis.

The steps in developing a behavioral anchored rating scale are both time
consuming and rigorous. It contains different method, during application.

2.5 Performance Appraisal Criteria

According to Armstrong (2009:127), the criteria for reviewing performance
should be balanced between: achievements in relation to objectives; the level of
knowledge and skills possessed and applied (competences or technical
competencies); behavior in the job as it affects performance (competencies); the
degree to which behavior upholds the core values of the organization; day-to-
day effectiveness. As Mathis and Jackson (1997:341) stressed, performance
criteria are standards commonly used for testing or measuring performances.
Criteria for evaluating job performances can be classified as trait-based,
behavioral based, or results based.

Trait based criterion: identifies a subjective Character trait ETIDI as “pleasant

personality”, “initiative” or “creativity and has little to do with the specific job.
ETIDI traits tend to be ambiguous and courts have held that evaluation based
on traits ETIDI as “adaptability” and “general demeanor” are two vague to use
as the basis for performance-based HR-decisions.

• Behavior-based criterion: focus on specific behaviors that lead to job ETIDI

cases.

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• Results-based criterion: look at what the employee has done or
accomplished. For some jobs where measurement is easy and appropriate,
a results-based approach works very well.
Generally, criteria are relevant when they measure employees on the most
important aspects of their jobs. But there are also problems with these criteria.
Mathis and Jackson (1997: 341) again said, jobs usually include many duties
and tasks, and so measuring performance usually requires more than one
dimension. If the performance criteria leave out some important job duties,
they are deficient. If some irrelevant criteria are included in the criteria, the
criteria are said to be contaminated. Managers use deficient or contaminated
criteria for measuring performance much more than they should.

2.6 Methods, techniques and tools

Several methods and techniques are available for measuring the
performance of an employee. The methods and scales differ for various
reasons. First, they differ in the sources of traits or qualities to be appraised.
The qualities may differ because of difference in job requirements, statistical
requirements and the opinion of the management. Second, they differ
because of the different kinds of workers, viz., factory workers, executives or
salespeople. Third, the variations may be caused by the degree of precision
attempted in evaluation. Finally, they may differ because of the methods used to
obtain weight for various traits.

The traditional methods of performance appraisal lay emphasis on the rating of

the individual’s personality traits, such as initiative, dependability, drive,
responsibility, creativity, integrity, leadership potential, intelligence, judgment,
organizing ability etc. On the other hand, modern methods lay more emphasis
on the evaluation of work results – job achievements – than on personality
traits. Result-oriented appraisals tend to be more objective and worthwhile,
especially for counseling and development purposes. Mejia (2001:213)

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2.6.1 Traditional Methods of Appraisal
• Straight Ranking method: It is the oldest and simplest method of
performance appraisal by which an employee and his performance are
considered as an entity by the evaluator. The relative position of each
employee is tested in terms of his/her numerical rank. It may also
be done by ranking a person on his/her job performance against that of
another member of a competitive group by placing him/her as number one
or two or three in the total group i.e. persons are tested in order of merit and
placed in simple grouping. But this method has its limitations. Firstly, it is
very difficult to compare a single individual with human beings having
varying behavior traits. Secondly, this method only tells us how a person
stands in relation to the others in the group, but does not indicate how
much better or worse he/she is than another. Thirdly, the task of ranking is
difficult when a large number of persons are rated. Fourthly, the ranking
system does not eliminate snap judgments, nor does it provide us with a
systematic procedure for determining the relative ranks of subordinates.
Joshi (2013:67)
• Person-to-person Comparison Method:
By this method certain factors are selected for the purpose of analysis (such
as leadership, dependability and initiative) and scale is designed by the rater
for each factor. A scale of a person is also created for each selected factor.
Then each person to be rated is compared with the person in the scale, and
certain scores for each factor are awarded to him/her. This method is not of
much use because the designing of scales is a complicated task. Joshi
(2013:68)

• Grading Method:
Under this system, the rater considers features and marks them accordingly
to a scale. Certain categories of worth are first established and carefully
defined. The selected features may be analytical ability, cooperativeness,
dependability, self- expression, job knowledge, judgment, leadership and
organizing ability etc. The rating scale may be: A – Outstanding; B – Very

15
Good; C – Good or Average; D – Fair; E – Poor. The actual performance of an
employee is then compared with these grade definitions and he/ she is
allotted the grade which best describes his/her performance. Such type of
grading is usually done in the selection of candidates by the Public Service
Commissions. Joshi (2013:69)

Graphic or Linear Rating Scale: This is the most commonly used method of
performance appraisal. A printed form is used for each person to be rated.
The factors to be rated are: employee characteristics and employee
contribution. In employee characteristics are included qualities such as
initiative, leadership, cooperativeness, dependability, industriousness,
attitude, enthusiasm, loyalty, creative ability, decisiveness, analytical ability,
emotional ability and coordination. In employee contribution are included the
quantity and quality of work, the responsibility assumed, specific goals
achieved, regularity of attendance, leadership offered, attitude towards
superiors and associates, versatility etc. These traits are then evaluated on a
continuous scale wherein the rater places a mark somewhere along a
continuum. However, this method suffers from serious disadvantage for it is
arbitrary and the rating is generally subjective. Another limitation is that it
assumes that each characteristic is equally important for all jobs. Joshi
(2013:69)

• Forced Choice Description Method: Under this method, the rating

elements are several sets of pair phrases or adjectives (usually sets of 4
phrases, two of which are positive, two negative) relating to job proficiency or
personal qualifications. The evaluator is asked to indicate which of the four
phrases is the most and least descriptive of the employee. Joshi (2013: 70)

2.6.2 Modern Methods of Appraisal

Most traditional methods emphasize either on the task or the employee’s

personality, while making an appraisal. In order to bring about a balance
between these two, modern methods have been developed. Of such methods

16
the prominent one is Appraisal by Results or Management by Objective
(MBO). This method has been evolved by Peter Drucker. It seeks to minimize
external controls and maximize internal motivation through joint goal setting
between the manager and the subordinate, and increasing the subordinate’s
own control of his work. It strongly reinforces the importance of allowing the
subordinate to participate in the decisions that affect him directly. Joshi
(2013:74)

Objectives of MBO: The objective is to change the behaviour and attitudes

towards getting the job done. In other words, it is result-oriented. It is
performance that counts. It is a management system and philosophy that
stresses goals rather than methods. It provides responsibility and
accountability and recognizes that employees have need for achievement and
self-fulfillment. It meets these needs by providing opportunities for
participation in the goal setting process. This approach focuses on the
product of one’s efforts. It is the most common format for the results
approach. Also, it contains different methods during application. Henenman
et al. (1996: 335). According to Joshi (2013:74) MBO programs have the
following benefits.

Benefits of MBO program: It has the following benefits:

• It increases employee motivation.

• Since MBO aims at providing clear targets and their order or priority, it
reduces role conflict and ambiguity.
• It provides more objective appraisal criteria.
• It identifies problems better and early. Frequent performance review
sessions make this possible.
• It identifies performance deficiencies and enables the management and
employees to set individualized self-improvement goals and thus proves
effective in training and development of people.
• It helps the individual manager to develop personal leadership,
especially the skills of listening, planning, counseling, motivating and
evaluating.
17
2.7 Effectiveness of Performance appraisal systems

To meet the vision, mission, objective, goals and targets of an organization or

an institution, everyone should set clear and precise methods of Performance
appraisal system objectivity. If so, effective output of Performance appraisal
system leads an organization to prosper specially, in the environment where
formal learning and other similar activities are held. As a result of, every
employee’s awareness leads to set and control how to implement effective
Performance appraisal system. Nelson and et.al (1997: 390) discusses that an
effective Performance appraisal system has about five main characteristics.

Validity: Comes from capturing multiple dimensions of person job

performance.
Reliability: comes from capturing evaluation from multiple sources and at
different times over the course of the evaluation period.
Responsiveness: allows the person being evaluated some input in to the final
outcome.
Flexibility: it opens to modification based on new information Ethiopian
Textile Industry Development Institute as federal requirements.
Equitableness: results in fair evaluations against established performance
criteria, regardless of individual differences.
Again clear and very important statements, about the effectiveness of
performance appraisal system are expressed by Mathis and Jackson (1997:
364) as follows. An understanding what an appraisal is supposed to do is very
critical whichever of the method is used. It usually works if performance
appraisal is used to develop employees as a source. When management uses
appraisal as a punishment or when raters fail to understand its limitations is
fails.
What and whichever the appraisal method is used, the main point is that
managers and employees must understand the purposes of performance
appraisal system. So, consistent with the strategic mission of the organization,

18
useful as an administrative tool, legal as development tool, as documentation of
employee’s performance are points of chances to be obtained if and only if
performance appraisal is practiced properly.

2.8 Factors Influencing the Effectiveness of performance

appraisal
Performance appraisal can be influenced by three major factors appraisal
system, subordinate and supervisor relationship, and the interview process.
Michael Beer (1987:184) has discussed these three factors than can influence
appraisal outcomes. First, the appraisal system can be designed to minimize
the negative dynamics causing problems of performance appraisal. The
supervisor often has only marginal control over these matters. Second, the
ongoing relationship between boss and subordinate will have major influence
on the appraisal process and outcome. Third, the interview process itself, the
quality of communication between boss and subordinate, can help to minimize
problems of performance appraisal.

The appraisal system: In order to solve the problem of defensiveness of rates

that resulted as a result of conflict in the goals of performance appraisal, raters
should conduct two performance appraisal rate performance appraisal
interviews –one focused on evaluation and the other coaching and
development. The other solution is choosing appropriate performance data. For
instance, using behavioral rating scales and behavior related appraisal
techniques may solve this problem.

Supervisor-subordinate relations: The quality of the appraisal process is

dependent on the nature of the day-to-day boss subordinate relationship. In an
effective relationship, the supervisor is providing feedback and coaching on an
ongoing basis. Thus, the appraisal interview is merely a review of the issues
that have already been discussed. On the other hand, if a relationship of
mutual trust and supportiveness exists, subordinates are more apt to be open

19
in discussing performance problems and less defensive in response to negative
feedback.

There are no easy techniques for changing a boss subordinate relationship. It

is highly affected by the context with in which the boss and subordinate work,
the broader culture of the organization, and the climate of the primary work
group will have important influences on boss-subordinate relationship. If the
organization culture encourages performance appraisal, open communication,
supportiveness, a concern for employees, and egalitarianism, it is more likely
that these values will characterize.
The appraisal interview: The best techniques for conducting a performance
appraisal reticular appraisal interview depend on the mix of objectives pursued
and the characteristics of the subordinate. Employees differ in their age,
experience, sensitivity about the negative feedback, attitude towards the
supervisor, and desire for the influence and control over their destiny.

According to Michael Beer (1987: 185) there are three types of appraisal
interviews each with distinct specific objectives. The differences are important
in determining the skills required by the supervisor and the outcomes for
employee motivations and supervisor-subordinate relationships. The three
methods are termed as: tell-and-sell, tell-and-listen, and problem solving.

The tell and sell method: The aim of this method is to communicate
evaluations to employees as accurately as possible. The fairness of the
evaluation is assumed and the manger seeks (1) to let the subordinate know
how they are doing, (2) to gain their acceptance of the evaluation, and (3) to get
them to follow the manger’s plan for improvement. In the interview, supervisors
are in complete control; they do most of the talking. They attempt to influence
and persuade subordinates that their observation and recommendations are
valid. Clearly, this method leads to defensiveness, lack of trust, lack of open
communication and exchange of invalid information and it can hurt
supervisor-subordinates relations.

20
The tell and listen interview: The purpose of this interview method is to
communicate the evaluation to the subordinate and then let him /her respond
to it. This method is apt to result in better understanding between supervisor
and subordinate than the -tell and sell method.

Employees’ perception about the performance appraisal in their

organizations: According to McShane and Glinow, (2000:113), Perception is
the process of receiving information and making sense of the world around us.
It involves deciding which information to notice, how to categorize this
information, and how to interpret within the framework of our existing
knowledge. Perceptual process is the dynamics of selecting, organizing, and
interpreting external stimuli. The perceptual process begins when
environmental stimuli are received through our senses. Most stimuli are
screened out; the rest are organized and interpreted based on various
information- processing activities. The resulting perceptions influence our
emotions and behavior toward those objects, people, and events.

According to Armstrong (2009:125), Perception is the intuitive understanding,

recognition and interpretation of things and events. Behavior will be influenced
by the perceptions of individuals about the situation they are in. The term
psychological climate has been coined to describe how perceptions give the
situation psychological significance and meaning. Therefore, the perception of
employee about their performance appraisal depends upon their understanding
of themselves and interpretation of their own. The perception of employees
about the performance appraisal in the selected institutions of textile industry
factories in Ethiopia have been organized and presented by posing question
about their attitudes or perceptions toward performance appraisal practice of
Ethiopia Textile Industry Development Institute.
Perception about the Performance Appraisal System Fairness and
Objectiveness: Performance appraisal should be fair and objective oriented, if
it is for aligning employees to organizational goals and employees development.

21
Fairness is emphasized more specifically; trust will be developed if
management acts fairly, equitably and consistently, if a policy of trans-
performance appraisal is implemented, if intentions and the reasons for
proposals or decisions are communicated both to employees generally and to
individuals, if there is full involvement in developing reward processes, and if
mutual expectations are agreed through performance management. Failure to
meet these criteria, wholly or in performance appraisal, is perhaps the main
reason why so many performance-related performance appraisal schemes have
not lived up to expectations. The starting point is to understand and apply the
principles of distributive and procedural justice.

One antecedent to distributive and procedural justice of performance, appraisal

is social justice between groups and employees. When we do not compensate
employees fairly, by basing their compensation on work results, then the
employees waste their time rather on getting the desired levels of compensation
and not on improving their work. According to Susan, (1995:110), performance
evaluation system is fair if: 1) It provides adequate notice; 2) fair hearing
which requires a formal review of meeting in which an employee is informed of
a tentative assessment of his/her performance and employees are permitted to
challenge the assessment; and 3) Judgment based on evidence that requires
the organization to apply performance standards consistently across
employees.

22
 CHAPTER THREE
DATA ANALYASIS AND PERESENTATION

This chapter presents empirical findings in reference to the research questions

in chapter one. These findings were obtained from both primary and secondary
data sources. They were presented and analyzed using frequency tables and a
percentage was used to appraise the performance evaluation practice.

3.1. Findings on General information

In this part of the questionnaire the demographic information of the
participant employees of understudy, is presented for analysis. The analysis
tries to provide information related to sex, age, educational background and
years of service of respondent employees.

Table1. General Information about respondents

Respondent
No. Items Option
No. %
Male 36 60
1 Sex Female 24 40
Total 60 100
18-30 48 80
31-40 11 18.33
2 Age 41-50 1 1.67
Above 50 0 0
Total 60 100
Certificate 0 0
Diploma 18 30
3 Level of education 1st Degree 40 66.67
2nd Degree & above 2 3.33
Total 60 100
0-2 year 11 18.33
3-5 22 36.67
4 Work Experience
Above 5year 27 45
Total 60 100

23
From table 1, item 1 indicates sex of respondents. Regarding respondents sex
36 (60%) were males while 24 (40%) were females. This shows that Textile
industry development institute has more males than females. It seems there is
gender inequality in Textile industry development institute.
From table 1, item 2 indicates age of respondents. Regarding respondents age
48 (80%) were between 18-30, 11 (18.33%) were between 31- 40, 1 (1.67%) were
between 41-50 and no respondent were above 50 years. This implies that most
of the employees of Ethiopian textile industry development institute are young.
Also the data we gathered is affair representation of the population as almost
all classes were represented and the data provided reflected the views of the
entire population.

From table 1, item 3 indicates level of education of respondents. Regarding

respondents level of education 40 (66.7%) was registered on 1st Degree level, 18
(30%) was registered on Diploma level, and 2 (3.33%) was registered on 2nd
Degree and above level with no response on certificate level. This implies that
the majority of Ethiopian textile industry institute workers are bachelor degree
holders who have the potential to understand what asked.

From table 1, item 4 indicates work experience of respondents. Regarding

respondents work experience 11 (45%) of the respondents had served in
Ethiopian textile industry development institute for a period of above 5 years,
22 (36.67%) for a period of 3-5 years, 11 (18.33%) for a period of below 2 years.
This implies that almost all respondents had taken reasonably enough
experience to see how the performance evaluation process in the institute is
under taken.

3.2. Findings on Performance Appraisal Practice:

The answers to the research objective, questionnaires on performance

appraisal practice were addressed by the major parts of the analysis which is
research specific questions were the questionnaire and the questions are
designed to be filled by the respondents.

24
Table 2. Performance appraisal

Respondent
No. Items Option
No. %
1 Is the appraiser appropriate person to Yes 40 66.6
measure your performance in terms of No 20 33.4
qualification, closeness, etc? Total 60 100
2 Do you believe that the performance Yes 38 63.33
appraisal measurement based on No 22 36.67
work plan & work performance? Total 60 100
3 Is there any discussion under taken Yes 35 58.33
prior to performance appraisal No 25 41.67
method, criteria and purpose of the
Total 60 100
appraisal process?

From table 2, item 1 indicates, Is the appraiser in Ethiopian textile industry

development institute are appropriate person to measure your performance in
terms of qualification, closeness, regarding respondents 40 (66.6%) say yes and
20 (33.4%) say that the appraiser are not appropriate person. This implies
that majority of respondent do not believe that the appraisers are not
appropriate person to measure performance.

From table 2, item 2 indicates, Do the employees believe that the performance
appraisal measurement of the institute based on work plan & work
performance, Regarding respondents 38 (63.33%) say yes and 22(36.67%) say
that the appraisal measurement are not based on work plan & work
performance. This means that Ethiopian textile industry institute performance
appraisal measurement based on work plan & work performance.

25
From table 2, item 3 indicates, is any discussion under taken prior to
performance appraisal method, criteria and purpose of the appraisal process in
the institute Regarding respondents 35 (58.33%) say yes and 25 (41.67%) say
that there is no any discussion under taken prior to performance appraisal
method, criteria and purpose of the appraisal process. This implies that
Ethiopian textile industry development institute under taken discussion about
performance appraisal method, criteria and purpose of the appraisal process
prior to the practice.

Table 3. Performance appraisal usefulness

Respondent
Item Option
No. %
Do you think performance Very Useful 36 60
appraisal is useful to the Useful 16 26.67
employees? Average 6 10
Less Useful 2 3.33
Not Useful at all 0 0
Total 60 100

From table 3, item 1 indicates, do employees of Ethiopian Textile Industry

Development Institute believe that the performance appraisal is useful to the
employees? Respondents 36 (60%) says that performance appraisal is very
useful to the employees 16 (26.67%) says that performance appraisal is very
useful to the employees 6(10%). says that performance appraisal on average it
is useful to the employees, 2(3.33%). says that it is less useful and no says not
useful at all. This means that the institute employee believes that performance
appraisal is useful to the employee.

26
Table 4. Who conduct performance appraisal
Respondent
No. Item Option
No. %
1 Who appraise your performance? Senior HR expert 4 6.67
Team coordinator 27 45
HR Director 4 6.67
other 25 41.67
Total 60 100

From table 4, item 1 indicates, Who appraise your performance in Ethiopian

textile industry institute Regarding respondents 4 (6.67%) say that Senior HR
expert apprise their performance 27 (45%) say Team coordinator 4 (6.67%)
says that HR Director apprise their performance appraisal and 25(41.67%) says
their immediate boss apprise their performance. This means in Ethiopian
textile industry development institute immediate boss appraise their
performance.

Table 5. Interval performance appraisal takes place

Respondent
Item Option
No. %
At what interval performance Once in a year 2 3.33
appraisal taken place in the Two times in a year 55 91.67
institute? Four times in a year 2 3.33
More than four times 0 0
No response 1 1.67
Total 60 100

From table 5, item 1 indicates, At what interval performance appraisal taken

place in Ethiopian textile industry development institute, Regarding
respondents 2 (3.33%) says Once in a year, 55 (91.67%) says appraisal taken

27
place two times in a year, 2 (3.33%) says that four times in a year, 1(1.67%) do
not give any response. This means that Ethiopian textile industry development
institute performance appraisal measurement taken place two times in a year.

Table 6. Response to criteria’s of performance appraisal

Respondent
Item Option
No. %
How do you see the criteria of Very clear 4 6.67
performance appraisal method in Clear 20 33.33
your institute? Average 23 38.33
Less clear 9 15
Almost not clear 4 6.67
Total 60 100

From table 6, item 1 indicates, How do you see the criteria of performance
appraisal method in your Ethiopian textile industry institute, Regarding
respondents 4 (6.67%) says very clear, 20 (33.33%) says that performance
appraisal method and criteria are clear, 23 (38.33%) says clear on average, 9
(15%) says less clear, 4 (6.67%) says almost not clear. This implies that
Ethiopian textile industry development institute performance appraisal
measurement criteria and method are clear on average.

Table 7. Response to criteria’s related to their work

Respondent
Item Option
No. %
Do you think the performance Highly related 13 21.67
appraisal criteria related with your Related 23 38.33
work? Averagely related 18 30
Less related 4 6.67
Almost not related 2 3.33
Total 60 100

28
From table 3.3.6, item 1 indicates, Do employees of Ethiopian textile industry
institute believe that the performance appraisal criteria are related to their
work? Regarding respondents 13 (21.67%) says that highly related to their
work, 23 (38.33%) says that related to their work, 18 (30%) says averagely
related to their work, 4 (6.67%) says less related to their work and 2 (3.33%)
says that performance appraisal criteria are almost not related to their work.
This implies that Ethiopian textile industry development institute performance
appraisal criteria are related to their work.

Table 8. Response to performance appraisal takes place on well organized data

of the employee

Respondent
Item Option
No. %
Do you think the evaluation Well organized 9 15
process is under taken based on Organized 20 33.33
well organized data of the Not sure 14 23.33
Less organized 15 25
employee
Almost not organized 2 3.33
Total 60 100

From table 8, item 1 indicates, Do employees of Ethiopian textile industry

institute believes the evaluation process is under taken based on well organized
data of the employee? Regarding respondents 9(15%) says evaluation process is
under taken based on well organized data of the employee, 20 (33.33%) says
that based on organized data of the employee, 14 (23.33%) says that they are
not sure that evaluation process is under taken based on organized data of the
employee, 15 (25%) says less organized data of the employee and 2 (3.33%) says
not organized data of the employee. This implies that Ethiopian textile industry
development institute performance appraisal process is under taken based on
organized data of the employee.

29
Table 9. Response to satisfaction level on the current general performance
appraisal process

Respondent
Item Option
No. %
How do you rate your satisfaction Very satisfied 0 0
level on the current general Satisfied 11 18.33
performance appraisal process? Average 20 33.33
Less Satisfied 25 41.67

Almost not satisfied 4 6.67

Total 60 100

From table 9, item 1 indicates, how do Ethiopian textile industries institute

workers rate satisfaction level on the current general performance appraisal
process? Regarding respondents 11 (18.33%) says that they are satisfied on the
current general performance appraisal process, 20 (33.33%) says averagely
satisfied, 25 (41.67%) says less satisfied on the current general performance
appraisal process, 4 (6.67%) says that almost not satisfied on the current
appraisal process. This implies that majority of the employee are less satisfied
on the current general performance appraisal process.

Table 10. Response whether high performers are distinguished from low
performers

Respondent
No. Item Option
No. %
1 Do you think high performers Fairly 18 30
are distinguished from low distinguish
neutral 26 43.33
performers?
Not 16 26.67
distinguished
Total 60 100

30
From table 10 item 1 indicates do employees of Ethiopian textile industry
institute believe that high performers are distinguished from low performers?
Regarding respondents 18 (30%) says that high performers are distinguished
from low performers, 26 (43.33%) neutral 16 (26.67%) says not distinguished.
This implies that high performers are not well distinguished from low
performers

Table 11. Response on how effective employee performance appraisal process

Respondent
Item Option
No. %
How effective do you think the employee Effective 14 23.33
performance appraisal process is? Neutral 37 61.67
Ineffective 7 11.67
No response 2 3.33
Total 60 100

From table 11 item 1 indicates how employees of Ethiopian textile industry

institute believe that the employee performance appraisal process is effective?
Regarding respondents 14 (23.33%) says that employee performance appraisal
process are effective, 37 (61.67%) neutral, 7 (11.67%) says ineffective and 2
(33.33%) doesn’t respond to the question. This implies that performance
appraisal process is not effective.

Table 12. Response on To what extent employees trust your appraiser

Respondent
Item Option
No. %
To what extent you trust your Very High 2 3.33
appraiser? High 14 23.33
Average 40 66.67
Very Low 0 0
Low 4 6.67
Total 60 100

31
From table 12 item 1 indicates to what extent do the employees trust their
appraiser? Regarding respondents 2 (3.33%) says that very highly trust their
appraiser, 14 (23.33%) says that highly trust their appraiser, 40 (66.67%) says
that they on average trust their appraiser, 4(6.67%) says that they do not trust
their appraiser. This implies that most of the employees trust their appraiser.

Table: 13 table show response on how management communicate performance

appraisal result

Respondent
Item Option
No. %
In which way does the management Formal report 23 38.33
communicate performance Formal meeting 22 36.67
Telephone 0 0
appraisal result to the employee?
Memos 9 15
Mail 0 0
other 2 3.33
No response 4 6.67
Total 60 100

From table 13 item 1 indicates in which way does the Ethiopian textile industry
institute management communicate performance appraisal result to the
employee? Regarding respondent’s 23(38.33%) says the management uses
Formal report to communicate performance appraisal result to the employee,
22(36.67%) says the management uses Formal meeting, 9(15%) says the
management uses Memos, 2(3.33%) says the management uses other method
like team evaluation and critics, 4 (6.67%) doesn’t give any response. This
implies that Majority says the management through formal report and meeting.
But practically the management communicates performance appraisal result to
the employee through memos. As the system improvement and human resource
team coordinator states the institute use balanced score card /BSC/
performance appraisal techniques and other civil service individual /personal

32
evaluation manual. It is result oriented performance appraisal system it is a
tool of communication Strategic management.
Performance measurement so result communication done by monitoring and
supervision and by taking assessment.

The performance appraisal techniques the institutes use Balanced Score Card
evaluation method. By seeking feedback from the employees and by putting
certain criteria and measurement the institute test the reliability and fairness
of the appraisal techniques. Majorly the institute uses the appraisal result for
promoting the employees and for the result of good work results, assessing
training gaps. As the system improvement and human resource team
coordinator answer the major problems they face in executing the performance
appraisal processes are:-

1. Lack of data and employees carelessness when doing the evaluation

2. By showing every detail results for each employee.
3. The ability to primate employees and strengthen work performance of the
employees.
4. Lack of data and knowledge on how to measure the individual of as a
team and
5. By automating the data management system and by training each
employees on the process and benefit of performance appraisal method
As the system improvement and human resource coordinator explains the
strengths that he notice in the institute in relation to performance appraisal
method are: Measuring job performance by amount, time, cost and quality of
activate and achieving expected goals and results then improve the institute
overall performance, Determine the future plan and policy, Increase employee
morals, quality of work, employee relation and performance and creating
absence of competition.

33
The strength which is observed by the employee are:

Measure every employee contribution and the role of individual, Assessed

performance gaps of employee attitude knowledge and skills then identify the
training and human development needs, Identify area of strength and
weakness and take remedial action, Encouraging and recognizing good
performance by promotion training opportunity and necessary for pay increase
decision, Clarify duties, goals and roles of the employee, Providing job
performance feedback and improve internal and external communication

The Major weaknesses are

Understanding is less the benefit of performance measurement by employee

and their leaders, The planning technical capacity of the performer is not
fulfilled, Continues data and information are not registered for the evaluation
and Lack of commitment because not only measure the expected goals and
results seamless measurement is takes place. The backlogging factors within
communication feature concerns is: 1st of all measurement is involved by full
engagement of team members and team leaders and the final performance
results put by two parties agreement the sign it.

34
 CHAPTER FOUR
SUMMARY OF FINDINGS CONCLUSIONS AND RECOMMENDATIONS

The purpose of this chapter is to discuss the findings, draw conclusions to the
results presented in chapter four. The chapter also contains recommendations
and conclusions according to the objectives of the study.

4.1 Summary of Findings

According to the analysis made in chapter three the major findings of the
study are the following:
• Sex of the respondent shows that there is unequal sex composition in
the institute.
• 60% of the preponderance of the respondent deem that performance
appraisal is valuable to the institute.
• Respondent says that their immediate bosses apprise their performance
• Mass of the respondent judge that prior discussion under taken on
criteria, appraisal method and purpose of the appraisal process.
• High performers are not distinguished from low performers.
• According to the respondent appraisal result uses for provide training
and promoting purpose only.
• The appraisers are the appropriate person to measure performance in
terms of qualification and closeness.
• 66.6% of the respondents say that they trust their appraiser.
• 63.33% of the respondents agree that the measurements are based on
work plan.
• All most all of the respondent says employee appraisal process taken
place two times in a year.
• As the response indicate a little clarity problem on performance
appraisal method and criteria.

35
 • The response of the mass indicates work performance and appraisal
criteria are slightly unrelated.
• The response indicates evaluation process in under taken based on
organized not on well organized data of the employee.
• 41.67% of the respondents are less satisfied on the current general
performance appraisal process.
• Management uses formal report to communicate performance appraisal
result to the employee.
• Mass of the employee says that performance appraisal process is not
effective.
• Balanced score card are the main performance appraisal techniques the
institutes use.
• Reliability and fairness of the system are measured through rigorous
monitoring and follow up.
• The management says lack of data and knowledge on how the measure
and employees carelessness when doing the evaluation are the major
problems that the institute face in executing the performance appraisal
processes and the employee says lack of uniform performance
evaluation system and presenting the balanced score card evaluation
systems as a political tool.

4.2 Conclusions
Based on the summery of the findings the following conclusions are driven:

• The entire employee deems that performance appraisal is valuable to the

institute. Lack of data and knowledge on how to measure, employees’
carelessness, lack of uniform implementation of performance evaluation
practice and considering the balanced score card systems as a political
tool are the main problem. In addition immediate bosses appraise
employee’s performance and they trust their appraiser. Majority have

36
 doubt on the aptness of the appraiser to measure performance. So that
the general appraisal system have implementation problem.

• Currently the institute uses Balanced Score Card evaluation system as

the main performance appraisal techniques. Reliability and fairness of
the system are measured through rigorous monitoring and follow up. It
indicates that there is uniform performance evaluation system.
• The evaluation process in under taken based on organized not on well
organized data of the employee, high performer are not distinguished
from low performer, the result of appraisal uses for provide training and
promotion purpose only, for the reason that the employees are less
satisfied on the current general performance appraisal process.
• Employee appraisal process taken place two times in a year. Based on
the evaluation result high performers are not distinguished from low
performers and appraisal result uses for training and promoting purpose
only, therefore performance appraisal process in the institute is not
effective.
• Management uses formal report and memos to communicate
performance appraisal result to the employee. As a result there is frail
appraisal results communication system.

4.3 Recommendations
The procedures in the previous part have laid a firm foundation upon which
recommendations can be drawn from the study in light of the study objectives.
Based on the findings of the study and conclusion, the student researcher has
prepared the following recommendation.

• To mitigate the major problems the management should implement

uniform performance evaluation system and enable the employee, middle
and top level managers through training. Also the management

37
 implements strong follow up system on data handling. While apprising
individual performance it is better to introduce team involvement.
• The management should strongly carry on implementing Balanced Score
Card evaluation system to insure reliable, faire and sensitivity of the
techniques.
• The management should properly implement a system which cascades
the individual activity from strategic goal, set evaluation criteria and
build strong correlation between work performance and appraisal
criteria.
• The management should design and implement a system which
distinguished high performers from low performers and in addition to
training and promoting the appraisal result should also used for hiring,
firing, demotion and rewarding.
• The management it’s better to implement honest, straight-between-the-
eyes feedback session to tell the employee exactly what they have to do to
improve and where they stand in the organization.

38
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39
40
 St.Mary’s University Facility of Business

Department of Management
Questionnaire for Employees of Ethiopian Textile Industry Development
Institute on Employee Performance Appraisal Practice

This questionnaire prepared by under graduate degree students in order to collect

data for the research entitled employee performance appraisal practice: The case study
on Ethiopian Textile Industry Development institute to the prepared in partial
fulfillment of B.A degree in management. All information you give is very useful for the
academic purpose and kept confidential. The validity of your response will highly
contribute for success of this research paper I would like to ask with due respect for
you to give your genuine response.

Thank you in advance for your cooperation.

Instruction
 Writing your name is not needed
 Put the liker scale (
) in your appropriate response
 If you have additional idea to add please don’t hesitate

I. Personal information

Sex: Male Female

Age: 18-30 31-40 41-50 Above 50

Qualification: Certificate Diploma BSC/BA Masters & Above

Position:

Work Experience: 0-2year 3-5year Above 5 years

II. Specific Information

1. Do you think performance appraisal is useful to the employees?
Very Useful Useful
Average Less Useful
Not Useful at all

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2. Who appraise your performance?
Senior HR expert
Team coordinator
HR Director Any other specify
3. At what interval performance appraisal taken place in the institute?
Once in a year Two times in a year
Four times in a year More than four times
4. Have you seen any problem in executing performance evaluation?
Yes No
5. If your answer of question No. 4 is yes, what are the problems?

6. To what degree you agree or disagree the evaluation criteria of the institute are
subjective?
Strongly Agree Agree
Disagree Strongly disagree
Neutral
7. How do you see the criteria of performance appraisal method in your institute?
Very clear Clear
Average Almost not clear
Less clear
8. Do you think the performance appraisal criteria related with your work?
Highly related Related
Averagely related Almost not related
Less related
9. Do you think the evaluation process is under taken based on well organized data of
the employee?
Well organized Organized
Not sure Less organized
Almost not organized

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10. How do you rate your satisfaction level on the current general performance
appraisal process?
Very satisfied Satisfied
Average Less Satisfied
Almost not satisfied

11. Do you think high performers are distinguished from low performers?
Fairly distinguish neutral Not distinguished
12. Does the management reward high performers?
Yes No
If No, Why

13. How effective do you think the employee performance appraisal process is?
Effective Neutral Ineffective
14. To what degree you agree or disagree performance appraisal results generate
Feedback for employees?
Strongly Agree Agree
Strongly Disagree Disagree
Neutral
15. To what extent you trust your appraiser?
Very High Very Low
High Low
Average
16. Is the appraiser appropriate person to measure your performance in terms of
qualification, closeness, etc?
Yes Some How No
17. In which way does the management communicate performance appraisal result to
the employee?
Formal report Memos Telephone
Formal meeting Mail If any other specify

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18. Do you believe that the performance appraisal measurement based on work plan
& work performance?
Yes Some How No
19. Is there any discussion under taken prior to performance appraisal method,
criteria and purpose of the appraisal process?
Yes Some How No
20. To what degree you agree or disagree self evaluation mechanisms are implemented
in your organization?
Strongly Agree Agree
Disagree Strongly Disagree
Neutral
21. To what extent the performance appraisal helps employees to assign the right
place, salary increment, training etc?

22. What are your opinions on ETIDI performance appraisal implementation?

23. What would be the possible solution to improve and apply to performance
appraisal successfully? Would you please state the point

d
 St.Mary’s University Facility of Business
Department of Management
Interview question for Ethiopian textile industry development institute
experts and management

1. What performance appraisal techniques do the institutes use?

2. How do you test the reliability and fairness of the appraisal techniques?

3. For what purpose mainly do the institutes use the result of appraisal?

4. What are the major problems that you face in executing the performance
appraisal process?

5. How do you communicate appraisal results to the employees?

6. What are the strengths & weakness did you notice in the performance
appraisal method in your institute?

Strength

Weakness

7. What do you suggest to solve those weaknesses?

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a
 Declaration

The undersigned, declare that this senior essay is my original work, prepared
under the guidance of Ato Yimer Adem. All sources of materials used for the
manuscript have been duly acknowledged.

Name: Misrak Bekele

Signature:

Place of Submissions: St/Mary’s University

Facality of Business

Department of Management

Adiss Ababa

Date of Submission:

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 Submission Approval Sheet

This senior research paper has been submitted to the department of

Management in partial fulfillment for the requirement of BA degree in
Management with my approval as an advisor.

Name: Ato Yimer Adem

Signature:

Date: