Organizations in the IT sector are creating innovative HR strategies due to the increasing competition for talent and higher employee turnover. One of these “strategies is gamification, which applies the principles of game design to work processes in order to engage and motivate employees. This study is intended to understand the impact that gamified performance management systems have on employee engagement and employee retention in IT organizations. A quantitative approach was taken, and a survey was distributed to 100 employees in different IT organizations. The convenience sampling method was used, and the data was analyzed using SPSS Version 22.0. Several statistical techniques were used including descriptive analysis, reliability analysis, KMO and Bartlett’s Test, exploratory factor analysis (EFA) and structural equation modeling. The results showed that gamified performance management systems have an impact on employee engagement and employee retention. The motivational design features (i.e. rewards, recognition, badges, leaderboards, challenges, and feedback) increase employee motivation, satisfaction, productivity, and commitment to the organization. Six factors were extracted in the analysis and explained more than 65 percent of the total variance. A performance management system that adopts gamification design features helps maximize the employee experience, increases productivity, and helps lower the employee turnover. The study adds to the HR gamification research in the Indian IT sector, and offers a framework that connects gamification to employee engagement and employee retention.