Performance management is the system used by today’s organizations to measure the performance of employees in the past specific period to time and also to make employees aware of the performance levels which the organization is expecting from them. They should also be aware of the objectives of the organization and the objectives of both the employees and employers should be consistent to each other (Barnow, 2000).
In today’s time all the organization have human resource department which is responsible for setting up proper performance management system in the organization but the difference is that some organizations are doing it formally and some informally.
This system is not only used in the organizations but also in other places, like schools, churches, sports teams etc. It is also called as performance appraisal system because we evaluate the performance of the employees and on the basis of that employees are given some benefits. Generally, the smaller organizations adopt informal approach in which employee and his manager are mutually agreed upon the goals and objectives (Brown, 1992). Larger organizations generally have formal feedback or appraisal system in which all the goals and objectives are documented properly.