How Does Performance Management System Contribute to Employee Performance?
Keywords:
Performance Management System, Performance Appraisal, Performance Feedback, Employee Performance.
Abstract
Performance management systems (PMS) are expected to improve employee performance; however, empirical evidence from 2020–2026 is dispersed across the fields of human resource management, management accounting, and public administration, leaving the underlying mechanisms and boundary conditions insufficiently mapped. This study aims to map research characteristics, the theories employed, the mechanisms linking PMS to employee performance, boundary conditions, and directions for future research. A systematic literature review was conducted following the PRISMA 2020 guidelines. A total of 150 articles were mapped, and 30 core articles from reputable journals published by Emerald, Taylor & Francis, SAGE, Springer, Wiley, and Elsevier were thematically synthesized. The findings indicate that PMS influences employee performance primarily through indirect mechanisms involving work engagement, motivation, psychological empowerment, job satisfaction, organizational commitment, and trust. This relationship may be non-linear and depends on leadership, organizational culture, sectoral context, and the manner in which technology is implemented.
References
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Baird, K., Tung, A., & Su, S. (2020). Employee empowerment, performance appraisal quality and performance. Journal of Management Control, 31(4). https://doi.org/10.1007/s00187-020-00307-y
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Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2). https://doi.org/10.1191/1478088706qp063oa
Brefo-Manuh, A. B., & Anlesinya, A. (2021). Performance appraisal justice and work attitudes of health-care workers in Ghana. European Journal of Training and Development, 47(1/2). https://doi.org/10.1108/ejtd-02-2021-0027
Canet-Giner, T., Redondo-Cano, A., Saorin-Iborra, C., & Escribá-Carda, N. (2020). Impact of the perception of performance appraisal practices on individual innovative behavior. European Journal of Management and Business Economics, 29(3). https://doi.org/10.1108/ejmbe-01-2019-0018
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Duy, P. K., & Nguyen Hoang, P. (2026). Performance management over time: Non-monotonic effects of personal values, work attitudes and situational strength on employee performance behaviour. International Journal of Productivity and Performance Management. https://doi.org/10.1108/ijppm-01-2026-0046
Ferreira, A., & Otley, D. (2009). The design and use of performance management systems: An extended framework for analysis. Management Accounting Research, 20(4). https://doi.org/10.1016/j.mar.2009.07.003
Ghani, B., Malik, M. A. R., & Memon, K. R. (2024). Effects of performance appraisal on employees' extra-role behaviors and turnover intentions – a parallel mediation model. Personnel Review, 53(9). https://doi.org/10.1108/pr-10-2022-0707
Ghazi, K. M., El-Said, O., Salem, I. E., & Smith, M. (2023). Does performance appraisal legitimacy predict employee sabotage and innovative behaviors? The mediating role of performance appraisal satisfaction. Tourism Management Perspectives, 47, Article 101117. https://doi.org/10.1016/j.tmp.2023.101117
Guo, Y., Xiong, G., Shaw, K., Liao, J., Zhang, Z., & Yi, F. (2023). Why does developmental feedback foster employee job performance? The mediating role of job crafting. SAGE Open, 13(3). https://doi.org/10.1177/21582440231185523
Hill, K., & Plimmer, G. (2024). Employee performance management: The impact of competing goals, red tape, and PSM. Public Personnel Management, 53(3). https://doi.org/10. 1177/00910260241231371
Hosciuc Rendi, C. D., Vihari, N. S., & Pappachan, R. (2025). The impact of performance management systems on employee work attitudes: Empirical evidence. Cogent Business & Management, 12(1). https://doi.org/10.1080/23311975.2025.2538717
Jang, S., Chung, Y., & Son, H. (2022). Employee participation in performance measurement system: Focusing on job satisfaction and leadership. International Journal of Productivity and Performance Management, 72(7). https://doi.org/10.1108/ijppm-08-2021-0448
Kakkar, S., Dash, S., Vohra, N., & Saha, S. (2020). Engaging employees through effective performance management: An empirical examination. Benchmarking: An International Journal, 27(5). https://doi.org/10.1108/bij-10-2019-0440
Ministry of State Apparatus Empowerment and Bureaucratic Reform. (2022). PANRB Ministerial Regulation Number 6 of 2022 concerning Performance Management of State Civil Apparatus Employees.
Kivipõld, K., Türk, K., & Kivipõld, L. (2020). Performance appraisal, justice and organizational effectiveness: A comparison between two universities. International Journal of Productivity and Performance Management, 70(1). https://doi.org/10.1108/ijppm-05-2019-0229
Lee, H. W., & Robertson, P. J. (2023). Improvements in employee performance management over time: Evidence from U.S. federal agencies. Public Management Review, 27(3), 598–622. https://doi.org/10.1080/14719037.2023.2254303
Lewandowski, R. A., & Cirella, G. T. (2023). Performance management systems: Trade-off between implementation and strategy development. Operations Management Research, 16, 280–295. . . https://doi.org/10.1007/s12063-022-00305-4
Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation: A 35-year odyssey. American Psychologist, 57(9). https://doi.org/10.1037 /0003-066X.57.9.705
Memon, K. R., & Ghani, B. (2021). The relationship between performance appraisal system and employees' voice behavior through the mediation-moderation mechanism. South Asian Journal of Business Studies, 12(2). https://doi.org/10.1108/sajbs-01-2020-0012
Muhammad, M., Suleiman, W., Al Mamun, M. A., Jewel, R. M., & Mozumder, M. A. S. (2025). Mediating effect of appraisal fairness between the relationship of appraisal satisfaction and employee performance appraisal: A case of Bauchi State Teachers Service Commission, Nigeria. Cogent Business & Management, 12(1). https://doi.org/10.1080/233 11975.2025.2450297
Natukunda, L. (2021). Communitarian norms and employee performance management in Africa. Employee Relations, 44(2). https://doi.org/10.1108/er-01-2021-0045
Page, M. J., McKenzie, J. E., Bossuyt, P. M., Boutron, I., Hoffmann, T. C., Mulrow, C. D., Shamseer, L., Tetzlaff, J. M., Akl, E. A., Brennan, S. E., Chou, R., Glanville, J., Grimshaw, J. M., Hróbjartsson, A., Lalu, M. M., Li, T., Loder, E. W., Mayo-Wilson, E., McDonald, S., Moher, D. (2021). The PRISMA 2020 statement: An updated guideline for reporting systematic reviews. BMJ, 372, n71. https://doi.org/10.1136/bmj.n71
Pei, J., Wang, H., Peng, Q., & Liu, S. (2024). Saving face: Leveraging artificial intelligence-based negative feedback to enhance employee job performance. Human Resource Management, 63(5). https://doi.org/10.1002/hrm.22226
Phan, T., & Baird, K. (2026). The use of big data analytics in performance management: The antecedents and role in enhancing performance measurement system effectiveness. Journal of Management Control. https://doi.org/10.1007/s00187-026-00414-2
Government of the Republic of Indonesia. (2019). Government Regulation Number 30 of 2019 concerning Performance Assessment of Civil Servants.
Rana, S., & Singh, S. (2021). Performance appraisal justice and affective commitment: Examining the moderating role of age and gender. International Journal of Organizational Analysis, 30(1). https://doi.org/10.1108/ijoa-04-2020-2124
Schleicher, D. J., Baumann, H. M., Sullivan, D. W., Levy, P. E., Hargrove, D. C., & Barros-Rivera, B. A. (2018). Putting the system into performance management systems: A review and agenda for performance management research. Journal of Management, 44(6). https://doi.org/10.1177/0149206318755303
Simons, R. (1995). Levers of control: How managers use innovative control systems to drive strategic renewal. Harvard Business School Press.
Siraj, N., & Hágen, I. (2023). Performance management system and its role for employee performance: Evidence from Ethiopian SMEs. Heliyon, 9(11). https://doi.org/10.10 16/j.heliyon.2023.e21819
Taneja, S., Srivastava, R., & Ravichandran, N. (2023). Employees' fairness perception towards performance appraisal system: Antecedents and consequences. Review of Managerial Science, 18(8). https://doi.org/10.1007/s11846-023-00680-7
Tong, S., Jia, N., Luo, X., & Fang, Z. (2021). The Janus face of artificial intelligence feedback: Deployment versus disclosure effects on employee performance. Strategic Management Journal, 42(9). https://doi.org/10.1002/smj.3322
Tranfield, D., Denyer, D., & Smart, P. (2003). Towards a methodology for developing evidence-informed management knowledge by means of systematic review. British Journal of Management, 14(3). https://doi.org/10.1111/1467-8551.00375
Wang, W., & Kim, T. K. (2022). Examining the effects of a performance management reform on employee attitudes and organizational climate. Public Management Review, 25(7). https://doi.org/10.1080/14719037.2022.2026095
Wei, F., Xu, L., Hu, X., Chang, S., & Wu, Y. (2023). Negative feedback change and employee performance: A goal-setting theory perspective. Asia Pacific Journal of Management, 41(4). https://doi.org/10.1007/s10490-023-09908-2
Yang, J., Wang, B., Zhao, B., & Ma, J. (2024). Performance appraisal interval and employee exploratory innovation behavior: The curvilinear relationship and the boundary conditions. Journal of Managerial Psychology, 39(8). https://doi.org/10.1108/jmp-03-2023-0197
Yuliansyah, Y., Khan, A., & Triwacananingrum, W. (2021). The "interactive" performance measurement system and team performance – towards optimal organizational utility. International Journal of Productivity and Performance Management, 71(5). https://doi.org/10.1108/ijppm-03-2020-0111
Aguinis, H. (2019). Performance management (4th ed.). Chicago Business Press.
Akanmu, M. D., Panatik, S. A., & Shahrin, R. (2025). The influence of performance appraisal practices on employee engagement at higher education institutions of Malaysia. Cogent Business & Management, 12(1). https://doi.org/10.1080/23311975.2024.2442093
Ambilichu, C. A., Akaighe, G. O., & Pepple, D. (2024). Performance appraisal process as a determinant of employee commitment: A serial mediation analysis. Journal of Organizational Effectiveness: People and Performance, 11(4). https://doi.org/10.1108 /joepp-07-2023-0273
Awan, S. H., Habib, N., Akhtar, C. S., & Naveed, S. (2020). Effectiveness of performance management system for employee performance through engagement. SAGE Open, 10(4). https://doi.org/10.1177/2158244020969383
Baird, K., Tung, A., & Su, S. (2020). Employee empowerment, performance appraisal quality and performance. Journal of Management Control, 31(4). https://doi.org/10.1007/s00187-020-00307-y
Bauwens, R., Audenaert, M., & Decramer, A. (2023). Performance management systems, innovative work behavior and the role of transformational leadership: An experimental approach. Journal of Organizational Effectiveness: People and Performance, 11(1). https://doi.org/10.1108/joepp-03-2022-0066
Berdicchia, D., Bracci, E., & Masino, G. (2021). Performance management systems promote job crafting: The role of employees' motivation. Personnel Review, 51(3). https://doi.org/1 0.1108/pr-05-2020-0361
Blau, P. M. (1964). Exchange and power in social life. Wiley.
Bowen, D. E., & Ostroff, C. (2004). Understanding HRM–firm performance linkages: The role of the "strength" of the HRM system. Academy of Management Review, 29(2). https://doi.org/10.5465/amr.2004.12736076
Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2). https://doi.org/10.1191/1478088706qp063oa
Brefo-Manuh, A. B., & Anlesinya, A. (2021). Performance appraisal justice and work attitudes of health-care workers in Ghana. European Journal of Training and Development, 47(1/2). https://doi.org/10.1108/ejtd-02-2021-0027
Canet-Giner, T., Redondo-Cano, A., Saorin-Iborra, C., & Escribá-Carda, N. (2020). Impact of the perception of performance appraisal practices on individual innovative behavior. European Journal of Management and Business Economics, 29(3). https://doi.org/10.1108/ejmbe-01-2019-0018
Colquitt, J. A. (2001). On the dimensionality of organizational justice: A construct validation of a measure. Journal of Applied Psychology, 86(3). https://doi.org/10.1037/0021-9010.86.3.386
Cosa, M., & Torelli, R. (2024). Digital transformation and flexible performance management: A systematic literature review of the evolution of performance measurement systems. Global Journal of Flexible Systems Management, 25(3). https://doi.org/10.1007/s40171-024-00409-9
DeNisi, A. S., & Murphy, K. R. (2017). Performance appraisal and performance management: 100 years of progress? Journal of Applied Psychology, 102(3). https://doi.org/10.1037/apl0 000085
Duy, P. K., & Nguyen Hoang, P. (2026). Performance management over time: Non-monotonic effects of personal values, work attitudes and situational strength on employee performance behaviour. International Journal of Productivity and Performance Management. https://doi.org/10.1108/ijppm-01-2026-0046
Ferreira, A., & Otley, D. (2009). The design and use of performance management systems: An extended framework for analysis. Management Accounting Research, 20(4). https://doi.org/10.1016/j.mar.2009.07.003
Ghani, B., Malik, M. A. R., & Memon, K. R. (2024). Effects of performance appraisal on employees' extra-role behaviors and turnover intentions – a parallel mediation model. Personnel Review, 53(9). https://doi.org/10.1108/pr-10-2022-0707
Ghazi, K. M., El-Said, O., Salem, I. E., & Smith, M. (2023). Does performance appraisal legitimacy predict employee sabotage and innovative behaviors? The mediating role of performance appraisal satisfaction. Tourism Management Perspectives, 47, Article 101117. https://doi.org/10.1016/j.tmp.2023.101117
Guo, Y., Xiong, G., Shaw, K., Liao, J., Zhang, Z., & Yi, F. (2023). Why does developmental feedback foster employee job performance? The mediating role of job crafting. SAGE Open, 13(3). https://doi.org/10.1177/21582440231185523
Hill, K., & Plimmer, G. (2024). Employee performance management: The impact of competing goals, red tape, and PSM. Public Personnel Management, 53(3). https://doi.org/10. 1177/00910260241231371
Hosciuc Rendi, C. D., Vihari, N. S., & Pappachan, R. (2025). The impact of performance management systems on employee work attitudes: Empirical evidence. Cogent Business & Management, 12(1). https://doi.org/10.1080/23311975.2025.2538717
Jang, S., Chung, Y., & Son, H. (2022). Employee participation in performance measurement system: Focusing on job satisfaction and leadership. International Journal of Productivity and Performance Management, 72(7). https://doi.org/10.1108/ijppm-08-2021-0448
Kakkar, S., Dash, S., Vohra, N., & Saha, S. (2020). Engaging employees through effective performance management: An empirical examination. Benchmarking: An International Journal, 27(5). https://doi.org/10.1108/bij-10-2019-0440
Ministry of State Apparatus Empowerment and Bureaucratic Reform. (2022). PANRB Ministerial Regulation Number 6 of 2022 concerning Performance Management of State Civil Apparatus Employees.
Kivipõld, K., Türk, K., & Kivipõld, L. (2020). Performance appraisal, justice and organizational effectiveness: A comparison between two universities. International Journal of Productivity and Performance Management, 70(1). https://doi.org/10.1108/ijppm-05-2019-0229
Lee, H. W., & Robertson, P. J. (2023). Improvements in employee performance management over time: Evidence from U.S. federal agencies. Public Management Review, 27(3), 598–622. https://doi.org/10.1080/14719037.2023.2254303
Lewandowski, R. A., & Cirella, G. T. (2023). Performance management systems: Trade-off between implementation and strategy development. Operations Management Research, 16, 280–295. . . https://doi.org/10.1007/s12063-022-00305-4
Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation: A 35-year odyssey. American Psychologist, 57(9). https://doi.org/10.1037 /0003-066X.57.9.705
Memon, K. R., & Ghani, B. (2021). The relationship between performance appraisal system and employees' voice behavior through the mediation-moderation mechanism. South Asian Journal of Business Studies, 12(2). https://doi.org/10.1108/sajbs-01-2020-0012
Muhammad, M., Suleiman, W., Al Mamun, M. A., Jewel, R. M., & Mozumder, M. A. S. (2025). Mediating effect of appraisal fairness between the relationship of appraisal satisfaction and employee performance appraisal: A case of Bauchi State Teachers Service Commission, Nigeria. Cogent Business & Management, 12(1). https://doi.org/10.1080/233 11975.2025.2450297
Natukunda, L. (2021). Communitarian norms and employee performance management in Africa. Employee Relations, 44(2). https://doi.org/10.1108/er-01-2021-0045
Page, M. J., McKenzie, J. E., Bossuyt, P. M., Boutron, I., Hoffmann, T. C., Mulrow, C. D., Shamseer, L., Tetzlaff, J. M., Akl, E. A., Brennan, S. E., Chou, R., Glanville, J., Grimshaw, J. M., Hróbjartsson, A., Lalu, M. M., Li, T., Loder, E. W., Mayo-Wilson, E., McDonald, S., Moher, D. (2021). The PRISMA 2020 statement: An updated guideline for reporting systematic reviews. BMJ, 372, n71. https://doi.org/10.1136/bmj.n71
Pei, J., Wang, H., Peng, Q., & Liu, S. (2024). Saving face: Leveraging artificial intelligence-based negative feedback to enhance employee job performance. Human Resource Management, 63(5). https://doi.org/10.1002/hrm.22226
Phan, T., & Baird, K. (2026). The use of big data analytics in performance management: The antecedents and role in enhancing performance measurement system effectiveness. Journal of Management Control. https://doi.org/10.1007/s00187-026-00414-2
Government of the Republic of Indonesia. (2019). Government Regulation Number 30 of 2019 concerning Performance Assessment of Civil Servants.
Rana, S., & Singh, S. (2021). Performance appraisal justice and affective commitment: Examining the moderating role of age and gender. International Journal of Organizational Analysis, 30(1). https://doi.org/10.1108/ijoa-04-2020-2124
Schleicher, D. J., Baumann, H. M., Sullivan, D. W., Levy, P. E., Hargrove, D. C., & Barros-Rivera, B. A. (2018). Putting the system into performance management systems: A review and agenda for performance management research. Journal of Management, 44(6). https://doi.org/10.1177/0149206318755303
Simons, R. (1995). Levers of control: How managers use innovative control systems to drive strategic renewal. Harvard Business School Press.
Siraj, N., & Hágen, I. (2023). Performance management system and its role for employee performance: Evidence from Ethiopian SMEs. Heliyon, 9(11). https://doi.org/10.10 16/j.heliyon.2023.e21819
Taneja, S., Srivastava, R., & Ravichandran, N. (2023). Employees' fairness perception towards performance appraisal system: Antecedents and consequences. Review of Managerial Science, 18(8). https://doi.org/10.1007/s11846-023-00680-7
Tong, S., Jia, N., Luo, X., & Fang, Z. (2021). The Janus face of artificial intelligence feedback: Deployment versus disclosure effects on employee performance. Strategic Management Journal, 42(9). https://doi.org/10.1002/smj.3322
Tranfield, D., Denyer, D., & Smart, P. (2003). Towards a methodology for developing evidence-informed management knowledge by means of systematic review. British Journal of Management, 14(3). https://doi.org/10.1111/1467-8551.00375
Wang, W., & Kim, T. K. (2022). Examining the effects of a performance management reform on employee attitudes and organizational climate. Public Management Review, 25(7). https://doi.org/10.1080/14719037.2022.2026095
Wei, F., Xu, L., Hu, X., Chang, S., & Wu, Y. (2023). Negative feedback change and employee performance: A goal-setting theory perspective. Asia Pacific Journal of Management, 41(4). https://doi.org/10.1007/s10490-023-09908-2
Yang, J., Wang, B., Zhao, B., & Ma, J. (2024). Performance appraisal interval and employee exploratory innovation behavior: The curvilinear relationship and the boundary conditions. Journal of Managerial Psychology, 39(8). https://doi.org/10.1108/jmp-03-2023-0197
Yuliansyah, Y., Khan, A., & Triwacananingrum, W. (2021). The "interactive" performance measurement system and team performance – towards optimal organizational utility. International Journal of Productivity and Performance Management, 71(5). https://doi.org/10.1108/ijppm-03-2020-0111
Published
2026-10-06
How to Cite
Rahma Utami, Y., Tri Amanda, P., & Sari, R. (2026). How Does Performance Management System Contribute to Employee Performance?. International Journal of Education, Vocational and Social Science , 5(04), 2603-2624. https://doi.org/10.63922/ijevss.v5i04.6821
Contact Person +6282139474255
Email : ijevss@citakonsultindo.or.id / editor.ijevss@gmail.com
