Abstract:
The purpose of this study was to explore the influence of performance management system on employee
performance in banks in Kitui Town, Kenya. The population under study was 118 employees. Data was collected
by use of questionnaires. Data from the research was analyzed using SPSS. It was found that performance
management system enhances employee performance by providing a reliable performance measure, increasing
staff competency and hence realization of set targets. The research concluded that enacting performance
management system enhances employee performance through setting individual objectives that are derived from
overall organizational goals and identifying skills gap which are addressed through trainings thus increasing
staff competence levels. The study recommended that banks management should foster their employee’s
awareness of the role of performance management system, reward good performers, address training gaps
identified, conduct appraisals in a professional manner and give accurate feedback concerning staff’s
performance after performance appraisal process.