RESEARCH PROPOSAL

Assessment Of The Practice And Problems Of Employee Performance Appr

FEBRUARY, 2023

DEBARK, ETHIOPIA

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 Table of Contents
Content page
Chapter One
1. Introduction -----------------------------------------------------------------------------------3
1.1 Background of the study-----------------------------------------------------3
1.2 Statement of the problem----------------------------------------------------4
1.3 Research question-------------------------------------------------------------5
1.4 Objective to the study--------------------------------------------------------5
1.4.1 General objective----------------------------------------------5
1.4.2 Specific objective ---------------------------------------------5
1.5 Significance of the study-----------------------------------------------------6
1.6 Scope of the study-------------------------------------------------------------6
1.7 Limitation of the study-------------------------------------------------------6
1.8 Delimitation of the study-----------------------------------------------------6
1.9 Organization of the study----------------------------------------------------6
Chapter Two
2. Review of related Literature-----------------------------------------------------------------7
2.1 Meaning of performance Appraisal-----------------------------------------7
2.2 Propose performance Appraisal---------------------------------------------8

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 2.3 Need for performance Appraisal--------------------------------------------8
2.4 Use of performance Appraisal-----------------------------------------------9
2.5 Process of performance Appraisal------------------------------------------10
2.6 Method or technique of performance Appraisal--------------------------11
2.7 Problems of performance Appraisal---------------------------------------13
2.8 The Appraisal Program-------------------------------------------------------14
2.8.1 What should be Appraisal------------------------------------14
2.8.2 Who will appraisal--------------------------------------------15
2.8.3 When to Appraisal--------------------------------------------16
2.9 Characteristics of good Appraisal-------------------------------------------16
2.10 Experience of performance Appraisal--------------------------------------17
2.10.1 European perspective-----------------------------------------17
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2.10.2 Current practice and Trends---------------------------------18
2.10.3 Us experience--------------------------------------------------20
Chapter Three
3. Research Methodology-----------------------------------------------------------------------21
3.1 Research Design-------------------------------------------------------------------21
3.2 Sample size and sampling Techniques-----------------------------------------21
3.3 Source of data and Technique of data collection------------------------------21
3.4 Method of data analysis and presentation--------------------------------------21
Chapter Four
4. Budget of Resource --------------------------------------------------------------------------22
4.1 Time budget (in Ethiopia Calendar) -------------------------------------------22
4.2 Budget break down (in Ethiopia birr)-------------------------------------------22
5. References………………………………………………………………………..

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 CHAPTER ONE

1. INTRODUCTION
1.1 Background of the study

An organization is a human grouping in which work is done for the accomplishments of some
specific goals and missions. To achieve organizational objectives, there is a need to coordinate
the basic resource of the organizations i.e money, material machinery/plants and human
resources. From other, human resource is crucial for the effective and efficient utilization
objectives. (Decenzo and PRobbins, 2005).

The success for failure of organization is largely dependent up on the caliber/abilities/quality of

the people working there in. in other words, without positive and creative contributions from
people, organizations can not progress and prosper. This is because people are initiators and
determinants of all activities in a given organization, by the some taken, all tasks in the
organization depend on how welted human resource in managed. If the human element is
managed improperly the result will be ineffective and inefficient besides, managing this
resource is control and critical task in any organization. It appears that managers have a central
not only for the behavior and performance of the people but also of their own behavior (Mondy,
1999, p-119).

Identifying and measuring employee performance is crucial to the management of the

organization. Employee’s job performance is an important issue for all organizations. However
satisfactory performance does not happen automatically. It is more likely with good
performance management system (Gary Dessler, 2003, p-284).

Performance appraisal is acritical part of human resource management it deals about a formal
structured system of measuring and evaluating an employee’s job related behaviors and out
comes to discover how and why the employee is presently performing on job and how the
employee can perform more effectively in the future. So that employee, organization and
society all benefits. (Aswathapa K, 2005, P-227).

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In appraising performance managers/ organizations using a predetermined and formal method
like. Rating scale, paired comparison method, critical incident method, field review method,
forced distribution, and checklist method are included (PG Aquinas, 2006, p-95).

While practicing employee’s performance many organizations in our country. Ethiopia faces
various problems. These problems are mostly related with subjective measures which provide
on opportunity for bias. Bias is the in accurate distortion of measurement. The most common
rater bias includesthe hallo effect, error of central tendency, spill over effect, Rater effect
sentiency and severity, primacy and regency effect. In principle performance appraisal of
employees is supposed to be under taken regularly. However, in practice many organizations do
not undertake performance appraisal permanently.

Today performance appraisal is an essential activity in every organization, but the absence of
systematically designed performance appraisal for employees have an negative impact on overall
operation and performance of the organization. Absence of performance appraisal in an
organization leads problems that results decrease work quality and productivity decrease
efficiency, employee true over and absenteeism are occurred in the organizations.

Thus, the study will tries to assess employee’s performance appraisal practice and problems by
taking debark town municipality as the case study area.

1.2 Statement of the problem

In order find out whether an employee is worthy of continued employment or not and if so,
whether he/she will receive about a pay rise or a promotion his/her performance needs will be
evaluated from time to time. When properly conducted, performance appraisal is not only let the
employee know how well he/she performing, but will also influence the employees future levels
of efforts, actives, results and task directions. Under performance appraisal we evaluate not only
the performance of workers but also his/her potential for development (P.subbo Rao Vs PRao,
1990, p-218).

Carefully designed appraisal system provides an opportunity to effetely utilize human resource
in the organization. It helps to enhance professional development of employees; it helps for
allocating and also helps to make comparative judgment regarding employees in the

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organization. How ever when performance appraisal is practiced properly it affects the working
atmosphere of the organization, reduce the cooperation/smooth relation between employees and
managers, enhance bias during the time of appraisal, and also it affect the moral and satisfaction
level employees in the organization.

1.3 Research question

In short the study will tries to address the following basic question to over come the problem
which is related to employee performance appraisal practice in Debark Town municipality?

1. Is there clearly defined and developed performance appraisal system Debark town
municipality?
2. How does Debark town municipality practice its performance appraisal system Debark
town municipality?
3. What are the major problems that face in the appraisal process of Debark town
municipality?
4. Does Debark town municipality make decision based on the assessment result?
1.4 Objective of the study
1.4.1 General objective

The general objective of the study will be assessing the practices and problems of employee’s
performance appraisal in Debark town municipality.

1.4.2 Specific objective

1. To investigate the practice of employee’s performance will conduct in the
municipality of Debark town.
2. To identify how often assessment of employee performance will conduct in the
municipality of Debark town.
3. To assess the problems of performance appraisal practice in the municipality.
4. To investigate whether the municipality make decision based on the assessment
result or not.
5. Finally, to forward possible recommendation for future improvement in Debark
town municipality.
1.5 Significance of the study

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 Research studies mainly conducted either to solve practical social problems and/or
add valid knowledge to the existing ones. Specifically the result of the finding
wills the following importance.

 It helps to identify the practice and problems of employee performance appraisal in

Debark town municipality.
 The study will serve as a stepping stone for others who went to conduct future study on
these areas.
 More over, the study will help as appraisal fulfillment of the requirement for the words of
bachelor art degree in management.
1.6 Scope of the study

Regarding geographical areas, the scope of the study will be to limited on Debark town
municipality. However, it is difficult to conduct the study on all the issue found in the
organization because of time, finance and other resource, so the study will be to try to
incorporate the practices and problems of employee performance appraisal in the municipality.

1.7 Limitation of the study

The researcher will to face some problems when conducting this study, which include shortage
of finance, time constraint, and lack of recent and up to date information.

1.8 Delimitation of the study

This research will be to conduct in Debark town municipality. The organization might be
challenge by different problems, but the researcher did not paid attention to those challenges
that are not related with the topics of the study. The researcher will to also compile data only
from municipality, excluding regional and branch municipality.

1.9 Organization of the study

The research will to consist of five main chapters. Chapter one include background of the study,
statement of the problem, research question, objective of the study, significance of the study,
scope of the study limitation of the study. The second chapter will to include review of related
literature, while the third chapter deals with methodology of the study. The four chapter deals
with data analysis interpretation. Finally the last chapter comprises conclusion and
recommendation.

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 Chapter Two

2. Review of Related Literature

2.1 Meaning of performance Appraisal

Performance appraisal is a systematic, periodic, and so far as humanly possible, an impartial

rating of an employee excellence in maters pertaining to his potentialities for a better job.
Performance appraisal is an objective assessment of an individual’s performance against well
defined benchmarks, (PG Aquinas 2006, p-81).

Performance appraisal is the process of evaluating how well employees do their jobs
compared with asset of standards and communicating that information to those
employees. It is the systematic evaluation of the individual with respect to his or
her performance on the job and his or her potential for development (Aswathappa,
2005, p-226).

Performance appraisal is a method of evaluating the behavior of employees in the work spot,
normally including both quantitative and qualitative aspects of job performance. It is process
that involves determine and communicating to an employee how he it’s performing the job and
ideally establishing a plan of improvement. (PG Aquinas, 2006, P-81).

Performance appraisal means evaluating an employee’s current or past performance relative to

the person’s performance standards. Appraisal involves, (1) setting work standards; and (2)
assessing the employees actual performance relative to these standards and (3) providing feed
back to the employees with aim of motivating the persons eliminate deficiency or to continue to
perform above par (Gary Dessler, 2003, p-203).

Performance appraisal refers to all formal procedures uses in working conditions to evaluate
personalities, contributions and potential group of members. It is a systematic and periodic
evaluation or rating on an employee performance in his existing job and on his potentiality for
taking p greater responsibility. (Dr.H.L Kaila, 2006, p-106).

Appraisal provides information about the performance of individuals employed an

organization, such information is use full for any purpose like placement, selection, promotion,
financial rewards determination of grades, incentives, or compensation etc. (ibid).

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 2.2 Purpose of performance Appraisal

According to PG Aquinas origination use performance appraisal for three major

purposes.

1. Administrative; performance appraisal commonly serve or an administrative tool by

providing employers with a rational for making many personal decisions, such as
decision relating to pay increases, promotion demotion, termination and transfer.
2. Employee development; performance appraisal for employee development purses
provides feed back on an employee’s performance. Appraisal data can also be used for
employee development purposes in helping to identify specific training needs of
individuals.
3. Programs assessment; program assessment requires the collection and storage of
performance appraisal data for a number of uses. The records can show how effective
recruitment, selection and placement have been in supplying qualified work force.

It is generally accepted that performance appraisal serve one of more of the following purpose.

 To create and maintain as a satisfactory level of performance

 To meet individuals development needs
 To facilities fair and equitable compensation based on performance
 To bring about better operational or business results
 To facilitate testifying and validating selection tests, interview techniques through
comparing their scores with performance appraisal ranks.
 To help the supervisors, to/have a proper understanding about their subordinates
 To provide information use full for manpower planning by identifying employees with a
potential for advancement.
2.3 Need for performance appraisal

According to Psubba Rao, usp Rao performance, appraisal is needed in order to

 Provide valuable information for personnel decision such as pay increase, promotions,
demotions, transfers and terminations.

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  It provides feed back information about the level of achievement and behavior of
subordinate, rectifying performance deficiency and to set new standards of work if
necessary.
 It serve as a means of telling a subordinate how he is doing and suggesting necessary
changes in his knowledge, behavior and attitudes. It thus provides information which
helps to counsel the subordinate.
 It serves as a means for evaluating the effectiveness of dev ices used for the selection and
classification of employees.
 Performance appraisal facilitates human resource and career planning; permanent
performance appraisal records of employees help management in human resource
planning with out relying up on personal knowledge of supervisors.
 It promote positive work environment, which contributes to productivity when
achievement.

There fore performance appraisal provides the rational foundation for incentives,
bonus etc the estimates of the realties contribution of employees help to determine
the rewards and privileges rationally.

Performance appraisal records protect management form changes of favoritism

discrimination. Employee grievance can also be reduced as it helps to develop
confidence among employees.

2.4 Uses of performance Appraisal

Performance appraisal is significant element of the information and control system in

an organization. Properly designed and communicated performance appraisal system
can help to achieve organizational objectives and improve employee’s performance
(Mandy, 1999 p-122)

According to, Mandy performance appraisal used for:

 Human resource planning: a well designed appraisal system provides a profile of the
organizations human resources strength and weakness to support this effort.

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 Training and dev elopement: by identifying the strength and weakness of an employee
appraisal serve as a guide for formulating a suitable training and development programs to
improve his quality of performance in his present work. It can also inform employees about
their progress and tell them what skills they need to develop, to be come eligible for pay rises
and/or promotions.
 Promotion decisions: it can serve as a useful basis for job change or promotion. By
establishing whether the worker can contributed still more in a different or higher job. It
helps in his suitable promotion and placement.
 Personal development: performance appraisal can help reveal the cause of good and poor
employee performance. It thus helps the employee to over comes his weakness and improve
his strength so as to enable him to achieve the designed performance.
 Compensation decision; performance appraisal results provide a base for rational decisions
regarding adjustment, to design and implement fair performance appraisal system and then
reward the most productive works and teams accordingly
 Internal employee’s relation performance appraisal data are also frequently used of decision
in several areas of internal employee relation including motivation, promotion, demotion,
termination, layoff and transfer.
2.5 Process of performance Appraisal

Performance appraisal is planned, developed and implemented through aseries of steps.

1. Establishing standards of performance: appraisal system require performance standards

which serve as benchmarks against which performance is measured. The standards let for
performance must be clearly defined and un ambiguous. To be useful, standards should
relate to the desired results of each job performance standards must be clear to both the
appraiser and the Apprises. The permanent standards or goals must be developed with the
supervisors to ensure that all the relevant factor have been included (P.G Aquinas, 20006,
p-87).
2. Communicating performance standards to employees; once performance standards the
established, it is necessary to communicate these expectants. It is important to note that
communication is a two-way street more transference of information from the manager to
the subordinate is not communication, communication only takes places when the

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 transference of information has taken place and has been received and understood by the
subordinate. Therefore feed back is necessary from the subordinate to the manger.
(Decenzo & p. Robbins, 2005, P-3562).
3. Measuring actual performance: after the performance standard are set and communicated,
the next step is to measure the actual performance of employees. To determine what
actual performance is it is necessary to acquire information about it (ibid).
4. Compare actual performance with standard: this is simply compared with the
predetermine performance standards (PG. Aquinas, 2006,p- 088).
5. Discussing the appraisal with employees: discussion will enable an employee to know
his/her weakness and strengths. Weakness is discussed so that employee takes interest in
improving his/her performance motivated to improve him/her. Ibid)
6. Initiating corrective action, if any corrective action can be tow types.

One is immediate and deals predominantly with symptoms. The other is basic and delves in to
causes. Immediate corrective action gets to the sources of deviation and seeks to adjust the
difference permanently. Immediate corrective action is often described as putting out; where as
basic corrective action gets to the sources of deviation and seeks to adjust the f

2.6 Methods or technique of performance Appraisal

A number of different performance appraisal methods of techniques are available for evaluating
the performance of the employees. These methods try to explain how management can establish
standards of performance and devise ways and means to measure and evolutes the performance
of employees. Every method suffers from contain draw backs and merits (PG. Aqui9nas, 2006,
p-90),

Managers usually conduct appraisal by using apredetermined and formal method which include
the following.

A. Rating scale; rating scale is the simplest and most popular technique. It uses ajob related
performance criterion such as dependability, initiative, out put, attendance, cooperation
etc. it consists of several numerical scales. Each scale ranges from excellent to poor.
Rating scale offer the advantages of adaptability easy use and low cost only requirement
being that the job-performance criteria can be changed. This way, a large number of

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 employees can be evaluated in a short time, and the rater does not need any training to
use the scale. (Aswathapa, 2005, p-226). The disadvantage of his method is several. The
rater’s biases are likely to influence evaluation, and the bases are particularly pronounced
on subjective criteria such as cooperation, attitude and initiative, further more numerical
scoring gives an illusion of precision that is really unfounded. (I bids).
B. Critical incidents methods: Under this method, the performance of networker is rated on
the basis of certain events that occur during the performance of the job (i.e. the evolution
is based on key incidents). These critical incidents or events represent the out standing or
poor behavior of employees on the job. (Gary Dssler 2003, p-286) This method helps to
avoid vague impressions and general remarks as (PG Aquinas 2006,p-95)
C. Field review method: this is an appraisal by some one outside the assessors own
department, usually some one from the corporate office or the human resource
department. The outsider reviews employee records and holds interviews with the rate
and his or her superior. This method is primarily used for making promotional decision at
the managerial level. Field reviews are also usual when a comparable information is
needed from employee is different units or locations. (Aswathappa, K.2005p-228).
D. Check list: here a check list of behavior descriptions is prearranged and each person is
evaluated against such list.Ratter merely record the list and a separate group can allocate
weight age for each list and finally arrive at total points or marks obtained. Advantage it
reduces subjectivity because recording is done by some one else act as the rater
comparison is possible, limitations. The rater does not give relative ratings. (ibid)
E. Paired comparison: paired comparisons force refers to compare each employee with all
other employees who are being rated in the same group. This method helps to make the
ranking method more precisefor every taint (quantity of work, quality of work and so on),
you pair and compare every subordinate with other subordinate (Garry Desslier 2003,p-
283)
F. Forced distribution method: “this method is particularly useful when a large number of
individual is to be evaluated by the same rater. Most typically this scheme is used in
rating over all job performance but it lends it self equally we “to rating specific factors of
traits (Dr, H.L Kaila, 2006, p-109).

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 G. The primary purpose of this method is to correct the tendency of arater to give
consistently high or low ratings to all employees. (DG Aquinas 2006, p93).
2.7 Problems of performance Appraisal

None of the methods of appraising performance is absolutely valued and reliable. Each has its
own strength and weakness performance appraisals one subject to a wide Varity of
inaccuracies and biases referred to as rating errors. These errors occur in the rater’s
observation, judgment, and information procession and can seriously affect the assessment
results.

The performance appraisal process and techniques rely on the evaluator who as his own
personal, biases, prejudice and idiosyncrasies. (Aswathapa, 2005, p-239) the most common
rating error includes:

 Leniency/severity: leniency or severity on the part of the rater makes the assessment
subjective.Subjective assessment affects the very purpose of performance appraisal. As
compared to the actual performance some evaluators have a tendency to be liberal in their
ratings i.e. they tend to give very high rates to the employees while at other time the
evaluator may give low rating to the employees. (Ibid)
 Halo error; this the perception of evaluator that one factor is of paramount importance and
then gives a good or bad overall rating to an employee based on this particular factor. The
halo effect is the influence of rater’sgeneral impressions on ratings of specific rate qualities.
(Gary Dessler, 2003, p-282).

The halo effect is atendency to allow the assessment of one trait to influence assessment on
others. One ways of minimizing the hello effect is apprising all employees by one trait before
rating on the basis of another trait (PG Aquinas, 2006, P-108).

 Central tendency: This commonly occurs who employees are incorrectly rated near the
average of m idle of the scale. It is important that when evaluators rate an employee
extremely high or extremely low the have to justify in writing. (Decezo and Probins, 2005, p-
378)
 Rater effect: this includes favoritism, stereotyping, and hostility excessively high or low
scores are given only to certain individuals or groups based on the raters attitude towards the

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 rate non on actual out comes or/behaviors. Supervisors may have biases to their employees
on personal characteristics such as race, religion, gender, disability etc, although
discrimination on such grounds are protected by legislation, in practice such discrimination
continues to happen (Aswathapa, 2005, p-237)
 Spillover effect this refers to allowing past performance appraisal ratings to unjustifiable
influence current period although the demonstrated behavior does not deserve the rating,
good or bad. (Aswathapa 2005, p-238)
2.8 The appraisal program

An appraise program possess several questions which need answers

2.8.1 What should be appraised?

Every organization has to decide up on the content to be appraised be fore the program is
approved before the program is approved. Generally the content to be appraised is determined
on the basis of job analysis. According to H.John Bornarding the criteria for assessing
performances:

1. Quality: the degree to which the process or result of carrying some idea activity
approaches perfection interims of either conforming to some idea way of performing the
activity or fulfilling the activities intended purpose.
2. Quantity: The amount produced, expressed in monetary terms, number of units or number
of competed activity cycles.
3. Timelines: The degree to which an activity is completed or a result produced at the
earliest time desirable from the stand points of both coordinating with the out puts of
others and of maximizing the available for other activities.
4. Cost of effectiveness: The degree to which the use of the organization resources (e.g.)
human, monetary technological and material) is maximized in the sense of getting the
highest gain or reduction in loss from each unit or instance of use of a resource.
5. Need for supervision: The degree to which a job performance carry out a job function
with out either having to request supervisory assistance or requiring supervisory
intervention to prevent and adverse out come.

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6. Interpersonal impact: The degree to which a performance promotes feeling of self-
esteem, good will and cooperation among co-workers and subordinates.
2.8.2 Who will appraise?

The appraiser may person who has through knowledge about the job contents to be
appraised, standards of contents and who observe the employee which performing
a job. Typical appraises are supervisors, subordinates, peers, and employee
themselves.

 Supervisors; in most cases, the appraisal is done by the immediate manger or supervisors.

This is because supervisors are responsible for managing their subordinates and they
have the opportunity to observe, direct and control the subordinate continually.
Morevor, they are accountable for the successful performance of this
subordinate.) (P subba Rao Vs P Rao, 1990, p-222).

 Subordinates: the concept of superiors rated by subordinates is being used in most

organizations today. Appraisal by subordinates finds their chief usefulness in the
selection process for promotions. The use of this choice may be useful in assessing
employee ability to communication, delegate work, allocate resources, disseminate
information, resolve intra-personal conflict and deal with employees on affair basis. But
the problems with subordinate evolution is that the supervisors tend to become more
popular, not effective leader ship, but by mere gimmicks. (ibid)
 Peers; appraisal by employees peers is done on the belief hat a group of employees can
more reliably identity the out standing and poor performances that supervisor who is not
part of the group. Peer appraisal may bearable if the work group is stable over are a son
ably long period of time and perform tasks that require interaction’s (P, G aquinas, 2006,
p-85).
 Self appraisal: if individual understand the objectives they are expected to achieve and
the standards by which they are to be evocated, they are to a greater extent in the best
position to appraise their own performance. (P. Subba Rao Vsp, Rao, 1990,p-222)

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 2.8.3 When to Appraise?

Informal appraisal is conducted when ever the supervisor or personnel managers feel it
necessary. The day to day working relationship between a manager and employees offer an
opportunity for the employee’s performance to be judge. This judgment is communicated
through conversation on the job or by on the spot examination of a particular a piece of work.
Under informal appraisal, system no formal procedures, methods or times are established for
conducting performance appraisal (P.G Aquinas, 2006, p-86).

However, formal or systematical appraisals are typically conducted once or twice a year, most
often annually and near the employee’s anniversary data. Under systematic appraisal system,
procedures, methods, and times are established for conducting performance appraisals, (Ibid)

2.9 Characteristics of GoodAppraisal system

A sound appraisal system should comply with the following basic characteristics

 Reliability and validate the system should be both valid and reliable. The validity of
rating is the degree to which they are truly indicative of the intrinsic merit of employees.
The reliability of rating is the consistency with which the ratings are a\made, either by
different raters or by one rater at different times.

Appraisal system should provide, consistent, reliable and valid information an data, which can
be used to defined the organization even in legal challenges (P.G Aquinas 2006, p-91)

 Job relatedness: The evaluators should focuses attention on job related behavior under the
employees control; raters must become familiar with the observed behavior. (Ibib)
 Standardization: well defined performance factors and criterion should be developing. It
will help to ensure uniformly and comparison of ratings. The appraisal techniques should
measure what they are supposed to measure, (Mondy, 1999, p-128).
 Practical viability: The techniques should be practically viable to administer possible to
implement and economical to undertake continuously. (P.G Aquinas, 2006)
 Training to appraisers: The evaluators or appraisers should be provided adequate training
in evaluating the performance of the employees with out any bias. Evaluators should also
be given training philosophy and techniques of appraisal (Mondy, 1999,p-128)

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  Open communication: The system should be open and participative. Not only should it
provide feed back to the employees on their \performance, it should also include them in
the goals setting proceeds. (Ibid)
 Employee access to results: employee should receive adequate feedback on their
performance. (Mondy 1999.p-128)
 Clear objectives: the appraisal system should be objective oriented. The objectives should
be fai9r, timely and open, so that it is beneficial to both the individual employee and the
organization (Ibid).
 Post Appraisal interview: after appraisal, an interview with the employee should be
arranged. It is necessary to supply feed back, to know the difficulties under which the
employees work and to identify their training needs. The appraiser should adopt a
problem solving approach in the interview and should provide co -unseeing for
improving perforate (P.G, Aquinas, 3006,p,-90)
2.10 Experience of performance Appraisal
2.10.1 European perspective

Performance management is a key component in managing any business. It allows a company

to measure how well it has travelled a long its plan need pathway, to check whether resources
are being utilized effectively and what risks must be dealt. It also motivates personnel to keep
focuses on desired goals and helps identify training needs.

According to a definition by the organization for economic co-operation add development

performance appraisal is an “assessment against a set of predetermined criteria of the economy,
efficiency and effectiveness with which an organizationor an individual carries out a particular
activity or range of activities. Organizations or individuals may set regular targets on particular
aspects of their performanceromance financial returns, efficiency. Quality of services supplied
it agonist which their performance is monitored and evaluated” it involves as structured
process of both evaluating an employees part performance and setting future targets/timetables
for reaching them A broader variant of appraise is called “up ward” or “360 degree” feedback
in which the employee is also given the opportunity to comment on the performance of the
person to whom they report.

Appraisal is most effective if it avoid a number of common pitfalls. These are the:

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  Linking of appraisal to directly and rigidly to pay reviews or promotion
 Encouragement of risk avoidance
 Stifling of innovation
 Promotion of a “blame cultural and personal circum stances
 Sensitivity to an individual’s cultural and personal circumstances
2.10.2 Current practices and trends

In many European countries formal performance appraisals remain in their infancy although
there is a wider spread use of performance related bonus arrangement. In general only 7% of
works in small firm’s wit less than 5 employees are subject to performance appraisal, in contrast
with over s50% in firms with more than 2,000 employees.

In France and the UK term contracts are less subject to performance appraisal. In prance full
time worker more often appraised than part timers and in Germany men are more frequently
apprised than women.

Use of performance appraisal also varies substantially by industry sector and job type. In
Germany it is most commonly practice in financial service companies and least common in
constructing and agriculture when as in eastern European states such as Serbia and Macedonia
performance appraisal systems are almost wholly confined to public administration. In Ireland
pa is mainly used by multinational companies which normally have a high level of discretion on
performance appraisal and pay policies. Belgian performance appraisal is applied to both
manual and non manual workers in the flanges region but is largely confined the country
where manual work are most frequently subject to performance appraisal, although it is rapidly
growing in popularity for all levels of employee in Portugal thanks to its inclusion in several
collective agreement.

Generally self evaluation methods are less common in Europe than in the USA a few companies
use peers or customers as inputs to the appraisal process. Performance appraisal is linked to pay
determination appraisal as performance management tool. In the Russian federation there
remains a reluctance to place too much weight on individual accountability and therefore
employees are evaluated more on team and company performance than their separate
contribution to goal achievement.

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Appraisals are primarily the responsibility of an individual’s immediate supervisor or manager.
In Romania for instance, 60% of performance appraisal meetings are conducted by an
employee’s direct manager and only 23% by their departmental manager. Most appraisals are
conducted just once a year, especially for those well established in their posts. But they are
sometimes conducted on a more frequent basis such as Suring an employee’s first year in part or
if they have been performing poorly.

Studies indicate that performance appraisal has a beneficial impact on company performance. In
France firms with HRM practices have a higher level of productivity. Performance appraisal it
self has a long and colorful history being used extensively form earliest time to ensure that
individual and work group were motivated to complete tasks to are quire standard and in a
timely manner. Today much of the evidence for the USA and Japan. However, research carried
out between 2004 and 2008 by the institute for emplacement studies and the work foundation
found that in the UK companies that focus broadly on all aspects of human capital improvement
significantly increase their profit/employee, operating profit per employee and “the probability
of achieving sales form new technology”

In UK, almost 80% of companies now operate performance appraisal sy stem. Yes recent
surveys suggest that many employees and managers are far from happy with the schemes used
in their organizations.

Appraisal fails to motivate employees, says asurvey by employee assessment consultants Seville
and Holds worth, and almost 50% of the respondents to an industrial society survey claim that
appraisals have no positive effect on the work force. The objective of an appraisal can include
giving feed back and direction to employees, defining future objectives, identifying training
needs and career development fostering communication decisions.

But no system is every likely to do a first rate job on all those disparate requirements. Frankly in
most organizations, the appraisal has become too daunting and complicated and complicated
(www.fed.com/HRPA/)

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2.10.3 Us experiences of performance Appraisal

A common practice in us companies is to appraise the performance of new employees

comparatively soon after they are hired if performance does not meet the companies
expectations. Employment may be terminated but even for those who have been with a
company for many years performance is evaluated at least once a year and in many cases then
performance gets reviewed periodically during the year. In General the focus of performance
appraisal is on short tem results and individual contributions to the company aims. More over,
differentials in pay may be substantial spectrally at upper levels of management promotions in
us companies are based primarily on individual performance. Although progressive companies
provide continuo’s development training is often undertaken with hesitation because of the cost
and the concern that the trained person may switch to another company. Thus employees are
often tramped in specialized functions resulting in a rather narrow career path with in the
company. Finally in many us company’s employee feel that they may be land off during
economic hard times which naturally contributes to job insecurity. However family ties and
good relation with the superior greatly influence advancement with an organization in USA

------

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 Chapter Three

3. Research Methodology
3.1. Research Design

The study will to employee a descriptive survey method in order to investigate the problem
which will relate to employees performance appraisal practice in Debark town municipality. The
method will be help to describe the states of affairs of the topic under study and the present states of
areas of investigation.

3.2. Sample size and sampling Techniques

The total population of the organization is 102 from this population the researcher will to take a
sample of 45 employees based on simple random sampling so that each and ever employees in
the organization will get an equal chance of being included also this method to avoid bias.

3.3. Source of data and Technique of data Collection

The study will de to use both primary and secondary source of data in order to gather necessary
information which is related to the study.

The primary data will be to collected through questionnaire and interview. A questionnaire
with open and close ended questions will be to designed and distributed to the employees.
Interview will be to conduced to the managers of the municipality in order to get board
information which help for study.

Secondary source of data will be to obtained from published source that are essential for the
study.

3.4. Method of data analysis and Presentation

After data will be to collect from the above source, the result will be to analyze by keeping its
validity, accuracy and reliability. The researcher will be to use both quantitative and qualitative
method in order to analyze the data. Quantitative data will be to analyze by using tables and
percentage, where as qualitative data will be to analyze through statement forms.

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 Chapter Four
4. Budget of Resource
4.1. Time budget (in Ethiopia calendar )

Activity Time period (2015)

No Decembe January February
r
1 Topic Section

2 Literature 
Review
3 Proposal
Development 
4 Data Collection 

5 Data Analysis 

6 Interpretation 
7 Report Writing 
8 Presentation 

4.2 Budget break dawn (in Ethiopian birr)

Budget plan of the research: this research requires a total of birr 819.50 to accomplish the
research.

No Cost item Quantity Cost prevent Total cost

1 Paper Birr Cent Birr Cent
1 packet 400 00 400 00
Pen 2 40 50 15 00
Flash 1 350 00 350 00
Binder 1 30 00 30 00
2 Transportation cost 100 00 100 00
Telephone 50 00 50 00
3 Secretary 300 00 300 00
4 Binding 10 50 100 00
5 Contingency expense 75 00 75 00
Total 1420 50

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5. References
1. Aquinas PG (2006): Human resource management principle and practice New Delhi,
vikes blishing house.
2. Aswathapa K(2005):Human resource and personnel management 4th edition, New Delhi
Jata Mc Grow –Hill publishing
3. Decnezon, Stephen P.Robbins (2005), personnel and human resource management; 3 rd
edition, new Delhi prentice halls of in did private limited.
4. Dr.H. Kaild (2006), organizational behavior HRM, Mumbai, ALTBS publishers
5. Garry Dessler (2003); Human resource management 9th edition
6. H, John, 2003, HRM, 3re edition Mc (Graw-Hill Irwin companies Bemardm H,John:
HRM an experiential approach 3rd edition.
7. Mondy R.W et al (1999): Human resource management 7 th edition, 30 Ston Aflyn and
Bacon.
8. W.W.W mgt. body. Con.us.
9. W.W.W. fed. Com. /HRPA/

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