EFFECT OF EMPLOYEE PERFORMANCE MANAGEMENT SYSTEM ON BUSINESS COMPETITIVENESS; COMPARATIVE STUDY BETWEEN COMMERCIAL BANK OPERATING IN WOLKITE TOWN

Abstract

This study investigates the relationship between employee performance management systems and business competitiveness in commercial banks located in Wolkite Town. A sample of 150 respondents from commercial banks was surveyed to gather data on their perceptions and experiences with performance management systems. The data were analyzed using correlation analysis to examine the relationships between different performance management components and business competitiveness. Additionally, regression analysis was employed to determine the extent to which these performance management variables explain the variability in business competitiveness. Using a quantitative research approach, data was collected from employees of both public and private banks through structured questionnaires. The sample included 174 employees from various banks in Wolkite town, representing a census approach to ensure comprehensive representation. The data was analyzed using statistical techniques, including regression analysis, to examine the relationships between EPMS components and business competitiveness. The results indicate significant associations between certain components of EPMS and business competitiveness in both public and private banks. Performance appraisal emerges as a key driver of competitiveness, with a positive correlation observed between the implementation of effective performance appraisal systems and enhanced business competitiveness in both bank types. Similarly, career development programs show a significant positive impact on competitiveness, highlighting the importance of investing in employee growth and advancement opportunities. Based on these findings, recommendations are provided for both public and private banks to enhance their competitive position. Public banks are advised to focus on improving performance appraisal systems and investing in career development programs to foster employee engagement and motivation. Private banks, on the other hand, should also prioritize performance appraisal and career development, while paying attention to refining reward systems to further enhance competitiveness. Overall, the study highlights the critical role of effective performance management practices in driving business competitiveness in the banking sector. By implementing targeted strategies to strengthen EPMS components, both public and private banks can enhance their competitive position and contribute to sustainable growth in Wolkite town's financial industry.