A good performance management system works towards the improvement of the overall organizational performance by managing the performances of teams and individuals for ensuring the achievement of the overall organizational ambitions and goals. An effective performance management system can play a very crucial role in managing the performance in an organization by:Ensuring that the employees understand the importance of their contributions to the organizational goals and objectives.Ensuring each employee understands what is expected from them and equally ascertaining whether the employees possess the required skills and support for fulfilling such expectations.Ensuring proper aligning or linking of objectives and facilitating effective communication throughout the organization.Facilitating a cordial and a harmonious relationship between an individual employee and the line manager based on trust and empowerment.