Human resource is one of the most determinant factors for organizations success and survival. In light of this,rnsubstantiating employee performance and creating performance-oriented culture is inevitable. Organizationsrnneed to practice effective performance management system so as to improve the performance of individualsrnand teams. Performance management system aims to build up the capacity of people to meet and exceedrnexpectations and achieve their full potential to the advantage of themselves and the organization. The mainrnpurpose of this study was to assess performance management practices in Ethiopia Electric power. The studyrnalso addresses the practice & process of performance management system, the attitudes of the employees &rnleaders towards the system and challenges faced while implementing it. Descriptive type of research designrnwas used. In order to collect primary data, structured questionnaire which includes demographic profiles andrnissues that related to performance practices designed with a five-point Likert scale was used. A total of 262rnquestionnaires were distributed to employees of the organization selected by using proportionally stratifiedrnrandom sampling technique. Of which 247(94%) questionnaires were properly filled and returned. Interviewsrnwere also conducted with Human resource development director, performance and reward managementrnmanager and performance and reward management experts of the organization selected by using purposivernsampling technique. Data analysis was made using descriptive statistics, frequency and percentage. SPSSrnversion 24 was used to process the primary data which was collected through the questionnaire. The studyrnfound that the practice of performance management system in EEP is not properly implemented thoughrnperformance management directives are designed. Employees are well aware of the mission, vision andrnstrategic objectives and the alignment between organizational objectives with departmental and individualrnobjectives. Managers and employees didnâ€™t equip with the necessary attitude, skill, and awareness inrnimplementing the whole performance management process. In addition, EEP was not using performancernmanagement results for any administrative and developmental purpose and high-level performances were notrnrecognized and rewarded adequately. Therefore, EEP should establish a full-fledged performancernmanagement system that would cover all PMS steps and create employee understanding on this matter. Toprnmanagement of EEP should also be committed and exert its maximum effort to put the system institutionalized