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Performance management is a complex process concerned with performance criteria, appraisals, people development, return on investment (ROI) and ultimately performance improvement. Performance management should be about ensuring that all employees, especially managers, perform at their best for the benefit of teams, customers and organizations. Are higher education institutions identifying performance gaps, developing and improving employees with potential, and enhancing the psychomotor, cognitive and affective growth of all employees to ensure growth and successful achievement of orgainisational strategic goals? Mixed method research conducted at an African city university during 2009 to 2011 reveals that whereas at an institutional level no tangible performance management policy exists, at the cold face, practical level, employees have to be competent and meet the criteria of their key performance indicators (KPIs) for them to receive year-end bonus payouts. This paper contributes to the body of knowledge on performance management in African universities by highlighting the need for institutional policy and evaluating the practical process of managers towards effective performance management of employees. [ABSTRACT FROM AUTHOR]