Effectiveness of the Performance Management Systems in Promoting Employee Performance: Lessons for Zimbabwean SMEs – A Narrative Literature Review

Abstract

The study aimed to determine whether Performance Management Systems (PMS) are effective in improving employees' performance or not. The paper also addresses policies and procedures used when implementing PMS and whether recommendations should be made to improve what isn't working well and maintain what is in to provide the best system execution in Zimbabwe's Small to Medium Enterprise (SME) sector. The objectives of the study were to determine how well PMS works to enhance the performance of the employees and to determine the protocols and guidelines utilised in the implementation of PMS. Theoretical literature review looked at the Theory of Expectancy, the Goal setting theory, the Theories of staff productivity and performance management systems, the effect of performance reviews on workers' output and how employee productivity is affected by performance training and development. Reviews of the theoretical and empirical literature were conducted to answer research questions. The study employed systematic review of literature. It was discovered that the Small to Medium Enterprises sector is using PMS and that the yearly performance reports were being prepared on time. The themes that were found from the study were improved and increased teamwork and communication, increased fairness, transparency and better hiring decisions, provision of detailed, qualitative feedback and increased motivation and protection of employees from potential bias.  It can be inferred that the SME sector should continue to employ the assessment system. The study recommended that additional research be conducted to empirically assess 
the effect of performance management system on employee performance in specific context.