The objective of the study is to examine the effect of performance appraisal on employee jobrnsatisfaction in the case of Ethiopian Airlines and to provide recommendation as how tornEthiopian bring employee job satisfaction by improving its performance appraisal practices.rnThe success of any organization depends on the quality and characteristics of its employeesrnbecause employees are the soul and blood steam of the organization and without them thernorganizations cannot achieve their goals and objectives. The researcher employed explanatoryrnresearch design and quantitative research approach to analyze the effect of PA on jobrnsatisfaction. The data required for study is obtained from primary and secondary data sources.rnA self-administered structured questionnaire was intended to collect the relevant and requiredrndata from the respondents. The researcher was used simple random sampling technique forrnthe selection of respondents. A total of 388 questionnaires were distributed to the sampledrnrespondents randomly among the target 350 questionnaires were answered & returnedrnsuccessfully which denoted 90% response rate. To check the reliability Cranach alpha wasrnemployed and to check the validity of the instruments pilot test was carried out. The data wasrnanalyzed by using SPSS software and it was presented through descriptive and inferentialrnstatistics. The findings revealed that there is a strong positive and high degree of correlationrnbetween PA and employees job satisfaction. The study found that 56% of variations in jobrnsatisfaction is explained by PA components.rnThe findings indicated that majority of the employees are not satisfied with the currentrnperformance appraisal practices. Therefore, Ethiopian should develop a good feedback systemrnand done fair PA result of employees based on objective data. Besides, the highest managementrnshould appreciate the effectiveness, importance and fairness of performance appraisal tornincrease the level of employee job satisfaction