The Effect of Performance Management system on Employees’ Performance: The Case of Selected Public Sectors of Addis Ababa City Administration

Abstract

Performance Management System is among the New Public Management (NPM) reform initiatives that has been adopted and implemented in Ethiopia, aiming to bring performance improvement in the public sectors and improving individuals' performance. The study examined the effects of Performance Management System on Employees’ Performance in the selected public sectors of Addis Ababa city Administration. A quantitative research approach and descriptive-explanatory design were employed; and primary data were collected from employees, process owners and leaders in the selected sectors. Both descriptive statistics (Mean and Standard deviation) and inferential statistics (regression analysis) were used to see the relationship and predicting ability of performance management system on employees’ Performance. The result revealed that the existence of positive and moderate relationship between components of Performance Management system and Employees’ Performance in the selected sector. Moreover, Performance Management System can explain 26.9% of the change in employees’ Performance (P=0.000< α =0.01). Hence, the sectors should strive to effectively implement Performance Management system to enhance its’ contribution in improving employees’ performance.