A small organisation has decided to implement a performance management system. However, the organisation does not have a formal vision and mission statement and business objectives. On the other hand, the authoritative management style is favoured and it has been very successful in the past. The change in the business environment especially increasing competition and changing customer taste have implied that the organisation has to improve its performance in order to stay in business. Some employees are afraid that the implementation of such a system is beneficial only to the organisation and they fear that their views will not be taken on board during the implementation process. They also fear that instead of improving performance of employees it will reduce their motivation. However, top management is assuring employees that the system will help to improve both organisational and employees' performance. They claim that other organisations in the industry are successfully implementing the system and it is considered as a best practice in managing human resources. On the other hand, managers also are not so willing to implement the system since it will increase the amount of paper and they have to change their management style. Given that the organisation does not have the necessary expertise in implementing the system, it has appointed you as its HR consultant.

(a) Using the above Case Study, explain to employees the whole concept of Performance Management System.

(b) Explain to management the way in which they can implement Performance Management System.

(c) What are the limitations of performance appraisal?