Employee performance appraisal is one of the most commonly used management tools inrnorganizations irrespective of their type, size and objective. Performance appraisal is one ofrnthe most widely researched areas in industrial/organizational psychology. However, therntraditional research agenda has done little to improve the usefulness of performance appraisalrnas a managerial tool.rnRecent research has moved away from studies of rater accuracy and rating instruments tornthemes of employee reactions towards performance appraisal as indicators of systemrnsatisfaction and efficiency. Employee attitude towards performance appraisal has beenrnstudied as a significant factor in employee acceptance and satisfaction of performancernappraisal.rnThis study investigated the attitude and reactions of employees towards the overallrnperformance appraisal system as well as its major component parts such as standard setting,rnappraisal instrument, feedback, and appeal procedure in Bank of Abyssinia.rnData were obtained via a questionnaire from 75 participants in the head office and fourrnbranches of the bank. An interview was also made with some 10 key personnel of the bankrnparticularly with employees working in Administration and Human Resource departmentrnThe findings of the study indicated that respondents perceived the performance appraisalrnsystem as an unfair and a system which cannot accurately measure their job relatedrnperformance. Respondents also indicated their dissatisfaction with standard setting, andrnperformance rating instrument used by the organization,rnThe respondents indicated their relative satisfaction with feedback aspect of performancernappraisal. Satisfaction was indicated with the appeal procedure of the performance appraisalrnof the organization.