Rethinking performance evaluation : strategic alignment in the service sector through a case-based framework

Performance management is critical for aligning human capital with organizational strategy, particularly in the increasingly competitive service sector. However, universally effective performance appraisal systems (PASs) exist, as effectiveness depends on contextual and organizational specificities. In Portugal, where services account for nearly three-quarters of gross value added, PAS implementation remains underdeveloped, highlighting a gap between strategic intent and practice. This study aims to address that gap by investigating how a performance appraisal model can be tailored to the service sector. A case study was conducted at PCI-Creative Science Park, S.A., a consulting firm, using a qualitative approach. The research design combined a literature review to identify theoretical dimensions of performance evaluation with an employee questionnaire to capture organizational perceptions and priorities. Integration of both strands of evidence informed the construction of the framework. The findings indicate that employees value objective-based evaluation as the most relevant dimension, complemented by customer feedback, adaptive performance, and organizational citizenship. Furthermore, the integration of 360° feedback mechanisms and regular review cycles emerged as key enablers of fairness and engagement. By combining theoretical insights with employee perspectives, this study contributes to a customized and flexible PAS that enhances strategic alignment in the service sector. The proposed model provides both scholarly value, by advancing the discussion on context-specific PAS design, and practical value, by offering a reference for organizations seeking to align human performance with mission-critical outcomes.