ABSTRACT: Amid increasing competition in the household appliance industry, PT RAM Armalia Abadi faces strategic challenges tied to its reliance on a traditional, financial-only Performance Management System (PMS). This research proposes a Knowledge-Based Performance Management System (KBPMS) to bridge critical gaps by integrating both financial and non-financial metrics. Using qualitative methods—including in-depth interviews, focus group discussions, and analysis of company records—the study identifies key performance areas such as customer satisfaction, production efficiency, and employee engagement that remain unaddressed by the current PMS. The KBPMS framework developed emphasizes a balanced, stakeholder-focused approach that aligns with the company’s strategic objectives, fostering operational efficiency and market resilience. Findings suggest that a phased implementation of the KBPMS can address adaptation challenges, ensuring effective integration while maintaining priority on strategic alignment. This study contributes to performance management research in emerging markets by demonstrating the benefits of a multi-dimensional PMS in supporting sustainable growth and strengthening competitive advantage. The proposed KBPMS offers valuable insights for similar organizations transitioning from conventional financial metrics to a holistic, knowledge-driven performance system.

KEYWORDS – Performance Management System, Knowledge-Based Performance Management, Stakeholder Alignment, Household Appliance Industry, Strategic Objectives.