The focus of this paper is to review and discuss the main factors that influence the effectiveness of Performance Management System in organisation. Performance Management System can be viewed as one of the most important and constructive developments that has gained momentum in the recent years. Consequently, it has become crucial for many organisations in their quest to improve and enhance their competitiveness through its introduction and implementation. Public and private organisations are gradually moving towards the adoption of Performance Management System as it provides an integrated and coherent range of Human Resources processes which can be supportive in terms of contributing to the overall improvement of organisational and individual performance. A number of key factors are responsible for the effectiveness of Performance Management System and they are critically discussed in this literature study. The study reveals that factors such as balance scorecard, training, top management commitment, employee engagement, reward management, enterprise resource planning, culture and behaviour influence the effectiveness of a Performance management System adoption in organisation.
Keywords: Effectiveness, Factors, Performance Management System
