Abstract
This paper presents insights into the various challenges managers and employees encounter in implementing and using Performance Management Systems (PMS) within their organizations. The analysis draws on a decade of qualitative data collected from participants of The KPI Institute’s training programs. The primary objective of the paper is to provide an in-depth understanding of the challenges faced by professionals in the field. Data was collected qualitatively, through focus groups organized at the beginning of each training session between 2012-2022. The research employs a thematic analysis approach to categorize and interpret the data collected through focus groups. In addition to the thematic analysis, a narrative analysis provides a richer, contextual understanding of the data. Data reveals seven key themes where participants encountered challenges. The study identified the primary challenges in performance management systems as KPI selection, organizational culture, system implementation, KPI activation, measurement process standardization, learning and improvement, and employee performance management. Participants emphasized that addressing these challenges requires aligning KPIs with strategic objectives, fostering a supportive organizational culture, ensuring accurate data collection and standardization processes, and mitigating subjectivity in employee performance appraisals.