1. Introduction and method The aim of the research is to identify options for developing performance management (hereinafter PM) of the academic staff (hereinafter AS) based on the example of Estonian universities. For the purposes of this research, the scope of PM is limited to the performance appraisal (hereinafter PA) and remuneration systems of AS, enabling more analyses of interplay between those two components. The transition from the traditional university to the modern university after the economic crisis has brought several changes in the management of universities in the last decade. There have been significant decreases in student numbers and the end of private funding for studying in Estonia too. The objects of the research are the PM systems for AS in the three leading universities and their subunits in Estonia: the Faculty of Economics and Business Administration at the University of Tartu (hereinafter U1); the School of Economics and Business Administration at the Tallinn University of Technology (hereinafter U2); and the private Estonian Business School (hereinafter U3). The main focus is the PM of the AS in the Economics and Business Administration faculties, where there were the biggest changes in teaching and research. The research question is to identify the effectiveness of PA and remuneration systems and to investigate the options for developing PM in the universities. The management of university faculties has been changing and has increasingly used management instruments of the private sector, which need professional managers. The research methodology was developed incorporating exploratory methods, including questionnaire-based surveys and interviews. Exploratory analyses and qualitative methods were conducted involving the analyses of documentation universities had on their PA and remuneration systems (Remuneration and benefits, Salary Rules, Staff recruitment etc.), focus group and semi-structured interviews with academic leaders, and participatory observations within a case study in U1. The case study holistically analyses PM policies in U1 by using several methods and includes quantitative and qualitative evidence. Quantitative methods included a questionnaire-based survey of AS in three university subunits--13 questions and open questions (see Table 4). The author used the Kruskal-Wallis test for finding the differences in opinions of AS at different universities. The data from U1 was gathered over a period of 10 years, similar surveys were carried out in 2004, 2007 and 2013. The same survey was gathered at U2 and U3 in 2013. To determine the particularities of the aforementioned systems, a total of 108 AS were surveyed in 2013 and nine academic leaders were interviewed at their universities (subunits). Seven focus group interviews (the type of Delphi method discussions) were also conducted at U1. Descriptive statistics and correlation analysis were used to analyse the results obtained. 2. Literature review 2.1. PM in general There are many definitions of PM. However, in principle it is defined as a process of measuring and developing the individual and the team performance; a set of PM practices with goal setting and planning, monitoring and feedback, appraising and remunerating of employees (Aguinis and Pierce 2007, De Andres et al. 2010). Some scientists have taken an even broader approach, incorporating topics like managing by values, empowerment and participative management (Mone et al. 2011, Biron et al. 2011), or organisational performance and leadership (Kivipold and Vadi 2013), or have associated it with creating a shared vision of the aims of the organisation (Decramer 2013), or emphasise the need to give equal prominence to leadership and management to achieve their objectives in schools and colleges (Bush and Middlewood 2013). PM is also an integral part of the managerial control system aimed at employee work activities and work results. …