Introduction:This article focuses on the fact that performance management helps and guide managers in their efforts to increase employee engagement in their company. Macey et al. (2009) says that the employees sense of purpose and focused energy that is evident to others through the display of personal initiative, adaptability, effort and persistence directed towards organizations goals. Gebauer and Lowman (2009) describe employee engagement as having a deep and broad connection with the company that results in the willingness to go above and beyond what is expected to help the company succeed; they also offer a framework for building engagement based on “knowing, growing, inspiring, involving, and rewarding” New research (Mone and London 2009) based on a limited study defines an engaged employee as someone who feels involved, committed, passionate, and empowered and demonstrates those feelings in work behavior. The latest studies also provide evidence of the fact that performance management is the primary factor that increases employee engagement. However, it is reported that manager’s decisions have strong impact on employee’s engagement.This article contains 5 major performance management activities associated with both employees engagement and performance management. These activities are as follows:Setting Performance and Development Goals:Studies suggest that when managers and employees set goals jointly, the chance of employee getting engaged increases as these stretched and difficult goals increases employee motivation and gives them a sense of challenge to prove themselves which can help them in their personal growth & it might lead to engagement. The degree of stretched goals should be handled very carefully by the managers as it affects the level of engagement of employees and if handled in a wrong way it would affect employee’s performance in a bad way. Studies suggests that the goal alignment increases employee satisfaction but it is not clear if it increases employee engagement. In order to study relationship between stretched goals and engagement, study has been suggested to check the level of commitment, passion and empowerment among employees by giving different employees different level of degrees of difficulty. Another study suggests that the extent to which employees feel informed about the task and its alignment with organization’s strategy and direction can help in improving employee engagement. Providing Ongoing Feedback and Recognition: Feedback is very important for increasing employee engagement as it provides them information about their strengths and weaknesses. Feedback and Recognition helps in improving performance of the employee by informing them where they stand and how they can improve themselves, it also helps employees in having career planning discussions with their managers and supervisors. Feedback is generally considered positive and motivational but it is still unclear if it helps in increasing employee engagement or not. However, recognition is a form of feedback which is a positive reinforcement as it helps in increasing employee morale, motivation and satisfaction, these aspects ultimately increases employee engagement. On the other hand, if employees are not recognized they can come into mental distress which will affect organization’s performance. It is suggested that managers should provide both constructive and positive feedback to employees on timely basis so they can understand their performance and have a good idea about their areas of development. Managers should know each employee’s needs and wants clear so that they can provide recognition to them appropriately.Managing Employee Development:If employees are provided with more challenging and meaningful work opportunities which can help them in their career development, employees will become more satisfied which will ultimately increase employee engagement. Study says that employee engagement increase when managers provide employees on the job trainings and also provide them proper place to apply those learnings in their workplace. If employees are provided with more challenging and meaningful work opportunities which can help them in their career development, employees will become more satisfied which will ultimately increase employee engagement. Both formal and informal learnings will help managers in increasing employee engagement. T & D opportunities should meet employees learning needs so that it can increase engagement such as coaching which is an informal learning style, it should help employees in improving performance, developing potential and adapting new techniques. In order to study relationship between coaching and employee engagement, managers should divide coaching into three groups: improving performance, developing potential and adapting new techniques and then measure level of engagement among them.Conducting Mid-Year and Year-End Appraisals:Studies suggest that if employees feel fairness in performance appraisal systems, then it can lead to increase in employee engagement even if the appraisal does not provide favorable results. The more the appraisal system is clear and transparent, the more it will be perceived to be fair. People also found absolute appraisal system fairer than relative appraisal system. Laboratory study has been suggested to check the level of employee engagement in absolute and relative appraisals by considering two groups, one provided with absolute system and other with the relative system to check level of engagement in both of them and perception of rewards and evaluations should be provided to them after the individuals are provided with their particular rewards and evaluations.Building a Climate of Trust and Empowerment:Mone and London (2009) also says that employees who are provided with appropriate resources and opportunities to perform their job effectively are also found to be very much involved in their job. Engagement also increases among employees if their feel that they can trust their manager because managers who use their position and authority in a positive way such as for employees best interest, managing their performance, acting as their advocate & motivating them always increases employee satisfaction which will increase their engagement with the company. So, management experts agree that both trust and empowerment help managers in increasing employee engagement.Performance Management-an interrelated set of Processes, Activities and Behaviors:It is evident from our study that performance management plays important role in increasing employee engagement but what if performance management is defined as a set of processes, activities and behaviors and each aspect contributes in increasing employee engagement to some extent so how can we measure their relationship with each other? This can be done with the help of surveys. Managers should use Structural Equation Modeling to analyze high value relationships so that they can identify those activities with can help them in increasing employee engagement more effectively.Conclusion:We concluded from the article that Performance Management helps in increasing employee engagement as various processes and tools of performance management helps in determining day to day activities of employees and also increases their level of engagement. But some processes needs further study in order to give clear idea about the relationship between employee engagement and performance management. In the end, it is suggested to the managers to clearly analyze the contribution that each performance management activity contains in increasing employee engagement so that they can focus on those activities which will help them in increasing more and more employee engagement.