Many traditional organizations are creating a great emphasis on performance of management system as a means of generating performance of high level. Increments in producing performance can be achieved by orienting the performance of management to promote employee’s engagement. A new approach to performance management system includes employee engagement and important factors including employee engagement. The main aim of this paper is to define performance management system with employee’s engagement and their performance and also analyzing the relationship between engagement and performance management. However, the results will prove that performance management system has created a positive and important impact on the relationship with employee performance. The main focus of this study is to analyze and explore the effect of performance management system on employee’s performance.