The objective of this article is to argue the importance of the use of performance management towards effective governance. Various authors have contextualised good governance and performance management and some of the views differ considerably. The intention of this article will not be to debate the differences but rather assess the applicability of performance management in public administration. As a point of departure globalisation and the business of government is briefly discussed together with the pressure on government to improve service delivery. Good governance will be assessed as a critical component and specific attention will be devoted to administrative governance as it relates to the implementation of public policy. Administrative governance forms the basis for performance management because it can be used as a tool to ensure effective governance. Performance management is normally based on the idea of improving external accountability within the context of governance. For the purpose of this article focus is placed on the modernisation of public sector budget, reporting, management of contracts, benchmarking and comparison, and finally the implementation of a strategy.