Employee performance management systems in Belgian organisations: Purpose, contextual dependence and effectiveness

In this study, employee performance management (PM) systems are investigated. It is proposed that a PM system’s purpose can be positioned on a bipolar continuum from a strong performance orientation to a strong development orientation. Further, it is suggested that PM system purpose relates to industry characteristics but also to PM system’s effectiveness in terms of (1) increasing performance and (2) fostering employee development and motivation. Analyses based on data from 319 Belgian organisations reveal that organisations operating in more competitive markets tend to have a PM system with a stronger performance oriented purpose, at the expense of a stronger development oriented purpose. Relating PM system purpose to PM system effectiveness, our study indicates that PM systems with a stronger development oriented purpose are more effective in fostering employee development and motivation. In contrast, the strength of a PM system’s performance oriented purpose did not relate to higher effectiveness in terms of increasing performance at various levels.