As we have explored, throughout Module 1, performance management systems are critical to individual and organizational success. Consider the scenario below and respond to the three questions asked.

Scenario

You are the new owner of a small business. About one week ago, you purchased this business from the previous owner who decided to retire. The previous owner was a phenomenal businesswoman; however, she did not value the importance of performance management systems. When you decided to purchase the business, you knew that you would need to make organizational changes. Based upon the information provided, answer the following questions:

1. In your own words, explain the benefits of a performance management system in terms of employee and organizational success.
2. Explain the implications associated with poorly implemented performance management systems.
3. Address components that you believe your performance management system should include.