Exploring the Relationship Between Performance Assessment and Employee Performance: The Role of Performance Planning and Performance Review

The current performance management system (PMS) in some Saudi organizations is not satisfactory as it specifically links performance assessment with employees’ performance, which contradicts the literature on strategic human resource management. Therefore, the purpose of this study is to explore the relationship between performance assessment and employee performance from the perspective of performance management systems and social exchange theory. The study collected 100 valid responses from employees working in the IT department. Firstly, the study examines the direct impact of performance assessment on employees performance. Additionally, it posits that the relationship between performance assessment and employee performance can be improved with a solid strategic performance management system. Based on the literature review, quantitative, and qualitative analysis, the study indicates that performance planning and performance review play a considerable role in the relationship between performance assessment and employee performance. This is because employee performance, attitude, and behaviors may not change significantly without proper performance planning. Similarly, transparency in the performance assessment process through performance review can positively affect the relationship between performance assessment and employee performance. Thus, it is concluded that employees perceive improved performance through efficient and fair performance assessment reviews and performance planning.