The impact of performance management systems on employee motivation and turnover: A mixed-methods study in manufacturing companies

Abstract

This research delves into the impact of Performance Management Systems (PMS) on key employee outcomes, explicitly focusing on Employee Motivation and Turnover within the manufacturing sector. The aim is to unravel the intricate relationships among PMS components, employee motivation, and turnover, with a nuanced examination of the moderating role played by Employee Satisfaction. By scrutinizing performance planning, employee participation, feedback and counseling, procedural justice, distributive justice, and interactional justice, the study aims to provide sector-speci􀅫ic insights that contribute to theoretical advancements and practical strategies for organizational leaders. Employing a mixed-methods approach, the study conducted qualitative interviews with expatriates in Hungary to explore the deep-seated nuances of performance management in manufacturing. Subsequently, a quantitative analysis, utilizing smartPLS for data analysis, involved a questionnaire administered to 207 respondents. The methodological approach allowed for a comprehensive exploration of the subject, combining qualitative depth with quantitative rigor. The 􀅫indings illuminate the intricate connections between speci􀅫ic PMS components and employee motivation and turnover. Moreover, the study unveils the moderating in􀅫luence of employee satisfaction on these relationships, providing a holistic understanding of how performance management practices interact within the manufacturing sector. This research stands out for its sector-speci􀅫ic focus, shedding light on the unique challenges and opportunities within the manufacturing industry. The 􀅫indings present a novel perspective that advances understanding of the complex interplay between PMS, employee motivation, and turnover, emphasizing the signi􀅫icance of tailoring performance management practices to sector-speci􀅫ic demands.