This research work is designed to assess practices and challenges of employee relationsrnof Commercial Bank of Ethiopia (CBE). It is assumed to provide the objectives of identifyingrnthe current practices and challenges of employee relations in order to creaternawareness among employees about employee relations as well as to look at gaps concerningrncommunication gap, knowledge gap and fairness among employees in CommercialrnBank of Ethiopia. The following questions were raised and addressed: what are therncurrent practices and challenges of Commercial Bank of Ethiopia and major challengesrnthat hinders effective relationship among employees, how much the management and employeesrnunderstand the employee relations to the objectives of the bank. Descriptive researchrndesign was used to obtain precise and pertinent information based on current status.rnSo, the researcher selected descriptive research design the most appropriate. Due tornthe nature of the research, it is useful to capture the best of both qualitative and quantitativernapproaches. Therefore, the mixed approach was used and the most appropriate forrnthis study. In order to determine the sample size out of the total population of 1318 threernof the sampling technics were used such as simple random sampling, stratified samplingrnand systematic random sampling technics in order to get the sample size of 172. To gatherrninformation for the study, both interviews and questionnaires with close ended as wellrnas document analysis were used. On the basis of the data analysis, the majority of the respondentsrnexpressed their agreement on the practices of employee relations such as teamrnwork, trust and confidence, relationship between management and employees and communicationrnbetween management and employees. Whereas, the majority of the respondentsrnexpressed their disagreement concerning fairness and adequate knowledge amongrnemployees as a major challenge in CBE