Demoralize: You can use this skill to cause an opponent to become shaken for a number of rounds. The DC of this check is equal to 10 + the target's Hit Dice + the target's Wisdom modifier. If you are successful, the target is shaken for 1 round. This duration increases by 1 round for every 5 by which you beat the DC. You can only threaten an opponent in this way if they are within 30 feet and can clearly see and hear you. Using demoralize on the same creature only extends the duration; it does not create a stronger fear condition.
I was wondering, outside of playing a Bard or casting a Divine spell, would allowing Diplomacy to give a momentary morale bonus as a sort of opposite to the Demoralize action under Intimidate be a fair house rule and if so, how would you word it? In my PbP I wanted my Paladin to 'rally the troops' and motivate a group of people who feel they are about to do. My GM mentioned Perform would be required however I am not a Bard and it seems to step on their toes.
Seems fine as a house rule. I would say full round action, diplomacy dc 10. granting +1 to the next roll made within 1 round, +1 bonus round for each increment of 5 by which the roll succeed. The player may use one of these bonus round to instead grant another creature the +1 moral bonus. Allowing a charismatic leader to rally more than one ally.
I would say that it's an interesting, but perhaps requiring a little consideration. If you play with the APG, you might consider the leadership and teamwork feats there as being part of your thinking.
As you mentioned, you're looking at stepping on the Bard's class feature Performance, the Cleric's spell Guidance, and Ki Mystic Monk's class feature "Mystic Insight" and then on top of that adding longer term effects with greater degrees of success. It's not very bad, but something to consider.