Abstract Small businesses are the predominant contributor to the U.S. economy, and yet face many challenges to remain competitive and sustainable. There may be several factors as to why small businesses fail including lack of human resources, limited financial resources, competition, technological advancements, disaster, and globalization. Improving employee performance by getting them engaged in their work to be more productive is an issue that cannot be overlooked in order for small businesses to function and remain competitive. Limited empirical evidence exists that explained dimensions of performance management structures that engaged employees in small businesses. However, how small businesses sustain their long-term performance remains uncertain. This study sought to bring together two previously distinct constructs, overall performance management and overall employee engagement. Alike, both constructs are currently of interests to researchers and practitioners, although they are not normally considered together. Therefore, this study aimed to understand the extent to which the two constructs are relevant in small businesses. This research was correlational in nature. Survey research was conducted to generate and analyze data gathered from 121 employees of small businesses with a focus on the United States. Overall, the implications of this study suggested small businesses that implement performance management in their business processes have more engaged employees. The conclusions drawn from these findings suggested that overall performance management and overall employee engagement contributes to small business productivity and organizational success.
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