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THE IMPACT OF PERFORMANCE MANAGEMENT SYSTEM CHARACTERISTICS ON PERCEIVED EFFECTIVENESS OF THE SYSTEM AND ENGAGEMENT by Laura M. Ricci The purpose of this study was to comprehensively examine performance management systems to determine the characteristics that are most influential in predicting desirable organizational outcomes. Results of an online survey administered to 159 participants revealed that the four performance management system categories significantly predicted employees’ perceived effectiveness of their performance management system and employee engagement. The activities category was found to be the strongest predictor of perceived effectiveness and employee engagement. Four performance management system characteristics significantly led employees to perceive their performance management system to be effective and be engaged at work. These four performance management system characteristics include systems that focused on the results employees achieved, evaluated employees on their contextual performance, facilitated the construction of individual development plans for employees, and allowed for participative decision making between managers and subordinates. The results suggested that organizations should implement these characteristics into their performance management system to increase perceived effectiveness of the system and employee engagement.

The Impact of Performance Management System Characteristics on Perceived Effectiveness of the System and Engagement