Managing performance is one of the critical responsibilities of organizational leaders because it provides a basis for managing the business of today and for developing it into the future through the performance of its people (Williams, 1991). Ironically, because it is the basis for reward, organizations place so much emphasis on performance appraisal that most managers and employees tend to be completely oblivious of the performance management process. Sometimes, it is even confused with performance appraisal. However, performance appraisal is just one of the components of performance management. The latter is a system and a process, which consists of strategic business plans, objectivesetting, training, coaching, feedback, performance appraisal, performancerelated pay and identification of training and development needs. This process is shown diagrammatically in Figure 6.1. As a system, its various components are interdependent, and the failure to effectively manage one component inevitably impacts on other elements.