Digitization in Performance Management system is a disruption in talent management practices in modern millennial organizations. The rapid digitization of business processes has mandated a re-invention of human capital management.  The trends in HR practices has shifted from traditional methods to Digital Performance Management system, which gives the employees a real time feedback and improves employee’s engagement with the job and organization by building trust, commitment, involvement at the workplace. Information technology, big data analytics and artificial intelligence have changed the way management measures employee performance. To achieve competency benchmarks companies have realised the importance of digital performance management system. The quality of employee performance invariably improves due to integration of advanced technologies like machine learning and artificial intelligence that enables the adoption of predictive analytics in accentuating employee engagement. The aim is to know the effectiveness of practical implementation of digital performance management system. Methodology adopted is case-based approach and empirical study. Data for this research will be conducted by questionnaire and interview, which will be distributed and scheduled with managers of Retail sector in South India. The sampling size of 50 were managers of Retail stores following the convenience sampling technique. The primary data collected is analysed through descriptive analysis, reliability statistics, factor analysis and rotated component matrix using SPSS software. The study has significant practical implication on organisational performance management practices, employee performance and employees engagement context in modern organizations through increased productivity, involvement, creation of trust in leadership, supportive management, reduce absenteeism and employee turnover. Digital performance management system will reduce the time, efforts of management and lead to transparency and honesty in employee performance appraisal. This study aims to highlight the digital Performance management system and its impact on employee’s engagement. It also identifies the variables affecting employee engagement and how digital performance management practices would accentuate performance and engagement. Based on the empirical analysis a model is proposed highlighting relationship between digital performance management variables, employee engagement variables and employees performance outcomes.

KEYWORDS: Appraisal, Competency, Digital Performance Management, Employee Engagement, Employee performance outcomes.