The main purpose of the study was to explore the effectiveness of performance appraisal in ethiorntelecom in correlating with staff professional improvement and organizational development. Inrnorder to achieve the objective of the study, descriptive survey method was employed. The studyrnused questionnaire to collect primary data. Accordingly 182 respondents from 1821 employeesrnworking in the six zonal offices were selected using purposive sampling technique .the datarngathered through questionnaire were analyzed using both descriptive and inferential statisticsrnmainly frequency, percentage and correlation coefficient respectively. The descriptive studyrnrevealed that is unclear performance standards/criteria, lack of ongoing performance feedback,rnrater’s error in evaluating performance and use of performance appraisal program forrnadministrative purpose only. The inferential study also revealed that there is a strong positivernrelationship between performance appraisal variables with personal improvement andrnorganizational development particularly appraisal process and procedure. Hence, it isrnreasonable to conclude that the appraisal process was not clearly communicated beforernimplementation; lack of required skill on the side of the appraiser and the criteria is weak tornmeasure performance highly affected the overall effectiveness of the performance appraisal ofrnethio teleocm at large and personal development in particular.rnIt is recommended that since appraisal process and procedures are the most significant factorsrnof all the performance appraisal dimensions resulting in personal improvement andrnorganizational development, the management should conduct detailed study and assess criticallyrnon performance appraisal process and procedures for it is a starting point in the design ofrnperformance appraisal dimensions. Moreover, it is recommended that ethio telecom shouldrndevice training for it’s appraisers to make them equip with the all the required skill which in turnrnwill avoid problems related with failing to keep file during prior to evaluation periods, givingrnequivalent ratings to all regardless of their performance and not frequently letting know howrnemployees are doing which impacts and affects both personal improvement and organizationalrndevelopment