It is also beneficial for the managers who will evaluate the employees. He will be having good knowledge of the employees who are working under him. For example, in an organization there will be some employees under a manager. Now manages has to set their goals and discuss with them about it. He has to interact more with the employee and will get more knowledge of the employee and on the basis of that he can utilize him efficiently. Company’s goals and objectives will be well communicated to the employees and in this way this system is also beneficial for employers also. The most important benefit of performance management system for employees is the motivation to perform better than others (Lindner, 1998). This will be explained with the help of an example which explains the performance management system in information technology companies. Others companies might have the same type of appraisal system. Appraisal happens twice in a year i.e. after every six months. In the starting of the year employees set their goals with the help of their managers and then at the end of six months human resource department starts the appraisal system. In this system manager discusses with the employee and tries to find out that if the employee has achieved his goals or not and then on the basis of that he has to give him rating for example, out of 4. 1 is the best and 4 is the least. Those who will get 1 rating will get extra bonus at the end of the quarter and those who will get rating 4 might be thrown out of the companyso extra bonus or incentives always motivate employees to improve their performance.