It seeks to answer the question of how an effective performance management system can be implemented to maximise employee productivity and development (Shaw 1995). Emotional intelligence is increasingly finding its place in the corporate or organisational structure. This is because it provides a new way to understand and assess people’s behaviour, management style, attitudes, interpersonal skills and potential. This essay will also unravel the forms of emotional intelligence and how they can be employed by HR professionals in planning, job profiling, recruitment, and customer relations. Performance management and its strategic importance in HRM Performance management is maximising individual or/team performance to achieve a motivated workforce ready to scale the highest heights resulting in high quality output (Goleman, Boyatzis and McKee2002). Performance management is an essential tool for top performing organisations and organisations aiming for the top. Ideally, a performance management system should be designed to suit the needs of a particular organisation. It should support pay, promotion, employee development, recruitment and reduction in force within the hierarchy system. Overloading the system with too many objectives will make it choke and lose focus. The choice of a performance management system should be determined by the business needs, organisational culture, and its integration with other human resources management systems. For example, it is recommended that an organisation should devise distinct systems of performance management for decision making and performance management for employee development to avoid conflict of interest. A performance management system for decision making uses appraisal information as a basis for pay increment, promotions, transfers, reduction in force or any other administrative human resource decision (Goleman, Boyatzis and McKee2002). On the other hand, a performance management system for development uses appraisal information as a guide in training, job experience and capacity, mentoring or any other employee development activity aimed at improving employee productivity. This is especially the case in employee rating as different rating systems grade the employee differently depending on the system. Generally, ratings for decision making are more lenient compared to ratings for development which vary with employee strength and development needs. Further illustration of the disparity in the two systems is reflected during evaluation of employees ratings in order to make reward decisions, where individual employees are supposed to give development feedback, they tend to be reticent to discuss their development needs so as not to jeopardise potential rewards and opportunities (Condly and Stolovitch 2003). An effective performance management system should have a well articulated process for accomplishing evaluation activities with well defined timelines for managers and employees, and all employees should be treated in a fair and equitable manner. The main stages of a performance management system are a revolving mechanism of performance planning, ongoing feedback, employee input, performance evaluation and performance review. At the beginning of a performance management cycle, employee performance expectations should be reviewed with a focus on their behaviour and what are expected to deliver in the next cycle. Behaviour reflects how an employee does a job.