Performance Management System

The components of a Performance Management System include goal setting, performance appraisal, and reward systems. Goal setting affects performance by influencing people's thinking and doings by focusing their behaviors and activities towards a direction that helps meet organizational goals. According to Cummings & Worley (2014), goals energizes behavior, improves people's motivation aiming at achieving difficult goals. Performance appraisal is a feedback system that helps evaluate individuals' performance by the organizations' manager or supervisors. It represents a link between the goal-setting process and reward systems depending on the performance of an individual.

Furthermore, employees look forward to performance appraisal for the purpose of promotions, getting a raise, and career decisions (Cummings, & Worley, 2014). Reward systems act as a powerful incentive important for improving employees' performance and produce high levels of employee fulfillment which later lead to organizational effectiveness (Cummings, & Worley, 2014).