Performance Management System (PMS) is the key to the success of any organization. Modern-day organizations may have embraced technology with aplomb; however, there is no substitute for the human element. Moreover, the emergence of new generation sectors has given a higher standing for the human factor within an organization. Human resource managers across the globe are finding it very difficult to attract and retain talent. In such a scenario, the need for a proper PMS has become all the more important. Companies from knowledge sectors have devised novel PMSs which are considered benchmarks by organizations across sectors. The need for an inside-out and outside approach is the key to the framing of PMS-related strategies as PMS is now a part of a strategic tool. The human element within an organization has enabled the company to lead the race in the corporate sprint, primarily because the emergence of the servicesbased business model has made the internal customers (read as employees) an indispensable lot.

The concept of managing resources in a professionally-managed organization has undergone tremendous metamorphosis over the last two decades. Conventionally, managers are supposed to manage five M's in their day-to-day functioning namely, Man, Machine, Minutes (Time), Materials and Money. However, the transformation that has taken place coupled with technological revolutions, notably the emergence of the World Wide Web (WWW) and global economies embracing Liberalization, Privatization and Globalization (LPG) have led to the emergence of modern-day management concepts and practices. Earlier, managers were not much concerned with any particular M and used to devote equal concentration and effort towards all the Ms. The concept of digitization, automation at one point of time threatened the importance of Man at the cost of Machine, which however remained only a pipedream as slowly but gradually entrepreneurs and business tycoons understood the significance of manpower.

In fact, the knowledge sectors or as commonly referred to as the new economy sectors like Information Technology (IT), IT-enabled Services (ITeS), biopharmaceuticals, gave man the rightful position in the overall scheme of things. Man became central to all the happenings around him, be it machine, materials, money, minutes, etc. The above diagram depicts the central location of men in the modern-day professional outfit. This change has to an extent being stimulated not only the developed economies, but also the emerging ones like India, China, etc. If India and China have been crowned to be the global powerhouses in back office and manufacturing respectively, it is primarily because of the competitive manpower available coupled with other strategic advantages like geography, connectivity, etc.

Even organizations which were reliant on technology alone to standardize their processes, surprisingly found out that there was absolutely no substitute to employees. A bank, an airline company, a hospitality player or even a conventional manufacturing player with the modern-day management approaches is always open to give the human element the fair share in the overall setup. These developments have compelled both the conventional old economy and new economy sectors to redefine their people-oriented strategies starting from recruitment, training and development and employee retention. Never in the history employees dreamt of becoming partners in the organization, of getting a share of the profit apart from the regular salaries. The perks include Employee Stock Option Plan (ESOP), 360-degree feedback, appraisal and hikes every quarter, joining bonus, etc. These developments in the Human Resource Management landscape are indicative enough to understand the significance of manpower in a modern-day professional outfit. The concept of treating employees as internal customers and end-user as external consumer has led to organizations relying completely on their employees to create that strategic difference in the competitive marketplace. Employee poaching was not as prevalent as it is today.

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