Performance management and its effects on the employee motivation and productivity

Employees have become the most important part of the company nowadays. Therefore, as employees are the most decisive influence on performance of businesses, it is necessary for them to invest in efficient and effective management systems. The aim of this paper is to analyse the different theories regarding motivation and performance of employees an empirically test their principles on a sample of a real business shared service in an international company based in Prague. There are two main part of this paper, the theoretical part and the practical part. The theoretical part makes possible to have a general knowledge regarding the performance management systems and how different principles of it impact the motivation of employees and their job performance (productivity). This theoretical part serves as the basis for the creation of the questionnaire, which will test the assumptions of those theories that were analysed in this part. In the practical part the results of the questionnaire distributed in an international company based in Prague are analysed.