The purpose of this study is to assess the performance management practices of Berhan Bank SharernCompany. Accordingly, the research descriptively tested using a sample data collected from 206 clericalrnand professional employees. The performance management system is seen from the alignmentrndirection. Where the organization vision, mission and goals are aligned with the employees and thernperformance management system. The processes of performance management system are dulyrndiscussed. The process are performance requisite, performance planning, performance execution,rnperformance assessment, performance review and performance renewal and re contracting are alsorndiscussed. The effective implementation of performance management system has also been dulyrnfocused. In addition an interview made with different head office and branch employees of thernorganization. Finally the implementation problem is clearly solicited. The major challenges of applyingrnperformance management system are also raised, then the research comes to conclusion by pinrnpointing ways of improvement for effectively implementing the performance management system.