Performance management System (PMS) is a systematic and data-oriented approach to managing people at work.

It is a systematic management approach to facilitate organisational performance through the alignment of individual performance with organisational Strategies and goals. Performance Management can improve the way every organisation manages their most valuable resource - their people who make everything possible.

The performance management process begins with analysis and description of the job. The performance manager identifies essential functions in the job description and the strategic mission and goals of the department or organizational unit. Standards of minimum acceptable performance (drivers) and results (deliverables) are developed for the position with the employee. Expectations of the manager and the employee are considered and weighed before buy-in by the employee.

Suitable compensation and reward programs are designed to motivate employees to achieve their performance and produce results. An appraisal system that is transparent and supportive to employees is established and deployed across the organisation.

Performance management also presents opportunities for management to make mid course corrections and create new action plans to achieve the goals.

If an organization's performance management system is effective, it will be a key building block to its human capital management system. It should serve as the basis for accurate measures of individual performance and thus individual rewards. It should be designed to provide feedback to employees about their strengths and weaknesses and, therefore, recommendations on developmental opportunities that will impact career progression for the employee and succession planning for the organization. It should also serve as a viable feedback mechanism for training and development requirements for all competency and skill levels throughout the organization.