In pluralistic type of system, there are different powerful and divergent sub-groups. These sub-groups work for their goals and objectives. In most of the organizations, the two predominant sub-groups are management and Trade unions. The goals of the organization are not consistent with the goals and objectives of the employees. It leads to major conflicts between the two parties. Performance management system in this type of system also does not work efficiently (Bacon, 2000). We cannot avoid the conflicts between the two parties as both the parties have different interests. Trade unions are legal groups in this type of system. Employee relations can be built by lots of negotiations and bargaining between the managers and trade union leaders.
Performance management system can be properly set up in the unitary system and in pluralistic system bargaining and negotiations play an important role.If the performance management system has been set up efficiently by the human resource department and there will not be any biasness in the performance appraisal performance it will be beneficial for both employees and employers. Employees should be evaluated only on the basis of their performance but not on any personal relations with the managers (Huselid, 1995).