Performance Management System (PMS) is the soul of any process designed for “people management.” Organizations exist to perform.
If individuals manning the organization do not perform, the organization cannot function. Whereas, if the employees of the organization give their best performance, the organization can create wonders.
The implementation of a Performance Management System (PMS) needs the engagement of several stakeholders.
More importantly, the effective implementation of the system requires that it is clearly understood how the system works and what are the benefits emanating from the system.
Thus, it can be said that effective implementation of PMS necessitates extensive support and approval of organizational staff and other stakeholders.
If properly designed and implemented, PMS can change the growth prospects and pace of growth of an organization.
Earlier, many organizations and their HR staff used to waste a lot of their efforts in making arrangements for performance appraisals in place of performance management.
However, nowadays, organizations use performance management systems, which are used as tools for reviewing the productivity of the employees and the effectiveness of the organization.
It is used to explain the present position to the employees and the level of performance expected from them by the management.
According to Rudman, “A performance management system is increasingly seen as a means of integrating HRM activities with the business objectives of the organization, where management and HR activities are working together to influence individual and collective behavior to support the organization’s strategy.”