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The main objective of the study of performance management is to promote and improve the efficiency of employees. This is a continuous process in which managers and employees jointly plan the goals and contribution of everyone. The main management tools are related to identifying areas for improvement; identifying needs for personal and professional development; promoting good achievements. Performance appraisal is based on a predefined set of criteria described in this study. The study shows the existence of formally documented strategies and a clear need to raise awareness of the different hierarchical levels. The available level of communication with regard to the monitoring and evaluation systems used also shows that there is a need for improvement and intensification. At the central level, there is a claim that there is a labor assessment system, but the evaluation conditions and the criteria used are poorly transmitted at the next levels of government. Another important area is the assumption and allocation of responsibilities, which has not changed in recent years. The adequacy of the system to the external environment implies changes that are in line with the inevitable commercialization of Serbian railways. In order to record as-Is situation on Performance management, and to propose upgrade on the existing methodology of a continuous process of planning, monitoring and reviewing employee performance, a study was realized. The main objective was to provide sufficient information for analysis which enabled to develop a performance management plan based on a key indicator system. As-Is analysis findings, cross-referenced with the best practices have determined a particular “gap” level. In order to overcome the gap were developed guidelines, optimally adjusted for state-owns railways of Serbia. The main results of the study are related to a description of the necessary requirements for successful performance management, including organizational, procedural prerequisites and necessary functional skills and competencies of the supervisors. A system of key indicators for functional monitoring of the effectiveness of the human resource management process is also proposed. Primarily to determine the quality of the KPIs we defined, we have conducted Data Envelopment Analysis (DEA). The study ends with the following conclusions: to build further work on human resource transformation, namely improving information and coordination of information at different hierarchical levels by optimizing the communication system; optimizing the system for allocating responsibilities for increasing labor productivity; updating the system for monitoring, evaluation and compensation of labor. Achieving a good Success Management system is possible when performing a series of activities such as: design and validation of an adequate system of objectives; Restructuring the economic subsystem and functional redistribution in line with the enterprise’s objectives; development of a functional specification for the digitalization of the performance management.

PERFORMANCE MANAGEMENT AND TRANSFORMATION OF HUMAN RESOURCES IN STATE-OWNED RAILWAY TRANSPORT OF SERBIA