Analysis On Employees Performance Appraisal System In The Financial Institutions Of Eritrea

Performance appraisal, which refers to the formal assessment of employees’ performance, is considered one of the most important parts of effective human resources management practices in any organization. As a result of its importance in an organization, many researchers are carrying out broad researches to determine its effectiveness. In the case of organizations in Eritrea however, little research has been conducted in this area. The relative lack of research is therefore the primary driving force for this study. Thus, this research paper seeks to review how performance appraisal is carried out in the financial institutions of Eritrea. To explore the above theme, an interview with managers of the financial institutions was carried out. Furthermore, a sample of200employees was selected out of which,120questionnaires were returned. Analysis was done quantitatively and qualitatively by the use of descriptive statistics. The data set includes employees from both genders of all age groups and of relatively high educational level. The findings in this research reveal that Performance appraisal is been practiced in most of the institutions; however it is not meeting the requirements of an ideal performance appraisal. Generally, insufficient knowledge and understanding of the application of performance appraisal coupled with poor communication between supervisors and subordinates were identified as the key challenges to proper and efficient performance appraisal. As a result most of the employees in the institutions are not satisfied with the appraisal. Thus, from the findings the study concludes that improperly conducted performance appraisal leads to employees’dissatisfaction and hence affects their productivity in their institutions. The results of this study are of high significance to the management of the institutions and suggest ideas to improve it.