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In order to achieve competitive advantage, the most effective approach of organizations is to utilize the full potential of their human resource. Consequently, to develop their knowledge and skill and driving their performances toward the organization s goal, top level managers are becoming more conscious than before in implementing performance management system. On the other hand, without having a sound psychological contract, it would be difficult to keep the employees performance consistent with the organization s strategy. As a result, identifying the relationship between them has been a critical subject of research for the HR academicians. This research project provides an analysis and evaluation of the implementation of performance management system and the formation of psychological contract as well as the role of performance management system in shaping psychological contract. Case study analysis was adopted as a research method. Most of the primary data were collected through interview method.
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