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The performance evaluation process is a key step in any management system and constitutes the basis for continuous improvement. Resistance to change is considered as a critical factor in any change management project; so, development of employee performance appraisal systems like all of the change management projects has always faced many challenges. This study seeks to illustrate the two-year experience (2018–2020) and lessons learned by developing an employee performance appraisal system in the National Library and Archives of Iran (NLAI) as a cultural public sector organization.

This study was carried out by using soft operational research (OR) approaches, using a novel combination of two methods, soft system methodology (SSM) and importance performance analysis (IPA). For this purpose, at the beginning, with the help of the SSM approach, the challenges of implementation was identified, then, using the opinions and experiences of the system's stakeholders, improvement actions were defined and prioritized using the IPA method.

The research findings showed that “coaching development,” “optimizing the forced distribution rating system (FDRS)” and “customizing the system” are the most important improvement actions.

The research has bridged the gap between research and practice in the field of employee performance appraisal system in national libraries.