Knowledge management (KM) is a key tool for improving the performance and competitiveness of organisations in today’s dynamic business environment. This study examines the impact of knowledge management on organisational performance and proposes a conceptual model comprising three key elements: the employee, the manager and the organisational environment. The study employed a quantitative research design, with data collected through an electronic survey conducted among public sector employees in Lithuanian organisations between July and November 2024. A total of 396 respondents participated in the survey, exceeding the minimum sample size required for a 95% confidence level with a 5% margin of error. The data were analysed via descriptive and inferential statistical techniques, including regression analysis, to test the proposed hypotheses and assess the relationships between knowledge management (KM) elements and organisational performance. The results revealed that the employee, the manager and the internal environment of the organisation are the three main elements of an effective KM system. These components contribute significantly to the success of the organisation, with the role of the employee (0.729) being the most influential, followed by the role of the manager (0.766) and the internal environment (0.716). The study also highlights the ethical considerations involved in the collection of data, ensuring the anonymity, confidentiality and voluntary participation of respondents. The study concludes that a well-structured KM system not only enhances organisational effectiveness but also supports sustainable development by fostering a culture of innovation and continuous improvement. However, given that the study was conducted only in Lithuania, the generalisability of the findings in a wider international context is limited, suggesting the need for further research in different organisational and cultural contexts.