PERFORMANCE MANAGEMENT SYSTEMS: WHAT IS THE IMPACT ON EMPLOYEE MOTIVATION, COMMITMENT, AND WORK PERFORMANCE?
Texas A&M University-San Antonio
The effectiveness of a performance management system, including aspects such as goal
setting, manager-driven employee ratings, self-evaluation, and discussions between manager and
employee has been under increased scrutiny. Current research questions the necessity for such
systems in the workplace, and there is some skepticism about the impact on employee motivation
and work performance. The literature presents credible arguments for and against the use of
performance management systems. Ultimately, there is strong support for the premise that most
performance management systems requires modifications since most traditional performance
management systems neither increase employee motivation nor improve work performance.
Recently developed strengths-based performance management models indicate stronger positive
effects on employee motivation and performance. Transformational and charismatic leadership
styles, as they relate to performance management, show positive effects on employee motivation
and work performance.
Keywords: Performance management systems, productivity, motivation, performance incentives, employee