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Performance management systems (PMSs) are critical for organizational success, but research is undecided on their constructive influence and the means through which they impact work engagement and turnover intention. This study aims to fill this gap by surmising psychological contract fulfillment as a mediator in the relationship between PMS effectiveness (PMSE) and employee outcomes.

The study uses a survey research design. Data were collected from 327 working professionals in India. The Statistical Package for Social Science Version 10.0 (SPSS 10.0) and the Analysis of Moments Structure (AMOS) 4.0 were used for data analyses.

The two-factor construct perceived PMSE was found to explain a larger variance in work engagement and turnover intention than the separate measures for its constituents PMS accuracy (PMSA) and PMS fairness (PMSF). Psychological contract fulfillment and work engagement were found to mediate the relationship between PMSE and turnover intention.

The study broadens the field of research on PMS in important ways. It demonstrates that the two-factor construct PMSE has a larger influence on employee outcomes in comparison to its constituent individual measures PMSA and PMSF. This is also the first study to suggest that in contrast to PMSF, PMSA explains a higher variance in employee outcomes.

This study validates the strong relationship between PMSE and key employee outcomes. Besides PMSF, managers can use the findings of this study to focus on the “right things” or accuracy in the PMS context to enhance work engagement and reduce turnover.

The study findings will have value everywhere owing to the diffusion and convergence in the human resource management practices of multinational firms irrespective of their contexts (Ananthram and Nankervis, 2013).

Earlier PMS studies have mostly been limited to either its fairness or accuracy and attended unduly to its appraisal element. This study adopts a systems vision of PMS and overcomes earlier drawbacks by investigating the role of both PMSA and PMSF in shaping employee outcomes. This is the first study to empirically confirm that in contrast to PMSF, the PMSA constituent of PMSE explains a higher variance in employee outcomes. The study provides greatly essential pragmatic support to the conjecture that PMSs advance work engagement (Mone and London, 2014; Gruman and Saks, 2011) and lower turnover intention (Kwak and Choi, 2015).

This study empirically verified employee engagement (EE) as an outcome of organizational communication and confirmed that the formation of EE is strengthened when smartphone use (SU) is at a higher level.

A quantitative approach was used in this research, whereby 408 valid samples were collected with an online survey. The hypotheses of direct effects were tested using the structural equation modeling (SEM) procedure, and the moderating effects were tested using the unconstrained product indicator method and the PROCESS macro.

The results showed that EE was significantly influenced by person–organizationvalue fit (POVF), transformational leadership (TFL) and job autonomy (JA), and the effects of POVF and TFL were moderated significantly by SU. Although the influence of social support (SS) on EE was insignificant in the full model, SU moderated the effect of SS. The evidence also showed that work–family conflict (WFC) had no negative impact on EE.

The participants of this study were restricted to a local area.

Organizations should develop job designs via two-way communication to bring up EE and SU can facilitate the process.

Previous research has identified EE as an outcome of organizational communication, but this concept has not yet been empirically verified. This research provides evidence to verify the above-mentioned concept and additionally confirms the moderating role of SU.