Abstract

There is little research exists that examine the practice and problems of performance management and evaluation of employees in developing countries, especially in Ethiopia public sector. Therefore, this research was aimed to assess the practice and challenges of performance management and evaluation in public sector in the case of finance and economic development department of Gamo Gofa zone. The study was conducted by using descriptive survey type in which all data relevant to the case was gathered and analyzed. In this study, both qualitative and quantitative data type were used. For that matter, the researchers used both primary and secondary data as a source of information. The study used systematic sampling technique in order select sample employees and purposive sampling technique to select representative officials and experts. In line with this, 40 sample size was selected from 68 total population. For the purpose of this study the researchers employed questionnaire, interview and secondary data as a method of data collection. Both quantitative and qualitative data analysis method were used. The findings of the study revealed the practices of performance evaluation in their organization were high. They respond as performance evaluation was conducted by top management where self evaluation and subordinate evaluation was not commonly practiced in the study area. The study shows check list and goal settings are the commonly used methods of performance evaluation. Skills and quality were the most commonly used criteria of evaluation in the study area. Finally, the study shows as rater bias, similarity error, and low evaluator motivation were the factors that affect performance management and evaluation in Gamo Gofa zone, finance and economic development department. Therefore, the researchers recommend the organization to initiate BSC (self-evaluation, peer evaluation) which encourages the participation of employees in the evaluation process. Additionally, the or