Purpose -The purpose of the research is to shed light on the question of how elements of a partnership system interact to provide a basis for an enhanced performance management framework. Design/methodology/approach -A structured literature review is followed by a longitudinal case study (action research), which combines qualitative and quantitative analyses. Observations over time, documents such as contracts, joint agreements, meeting agendas and minutes, personal conversations and in-depth interviews were mainly used, with quantitative measurement of operational and relational performance. For an in-depth analysis of interdependencies, a systemic perspective based on an interaction analysis of relevant elements of the partner management system was adopted. Findings -The paper draws upon real-life data from service partnerships in the automotive industry. Combining a longitudinal multi-dyadic approach with action-based research makes it a unique opportunity to reveal insights into the development of performance-based partnerships. The paper illustrates enablers, limitations, and conflicting circumstances in partnering highlighting the role of incentives and derives propositions for a comprehensive framework for a performance-oriented partner management.Research limitations/implications -Owing to the limited number of case studies, this research is considered mainly exploratory. The presented case study is an essentially illustrative example of the implementation and development of performance-oriented partnerships. The insights provide a better and deeper understanding of the dynamics of forming partnerships in reality, especially limitations and pertinent expectations regarding performance management in partnerships. There remains a need for further research for success-related dimensions and antecedents of partnering concepts in a general industry approach. Originality/value -The paper draws upon real-life data from service partnerships in the automotive industry. Combining a longitudinal multi-dyadic approach with action-based research makes it a unique opportunity to reveal insights into the development of performance-based partnerships. The paper illustrates enablers, limitations, and conflicting circumstances in partnering highlighting the role of incentives and derives propositions for a comprehensive framework for a performance-oriented partner management.Keywords Partnership, Performance, Incentives, Case study, Systemic thinking, Performance management Paper type Research paperThe current issue and full text archive of this journal is available at www.emeraldinsight.com/0960-0035.htm Some Enablers deserve the author's special thanks: Peter Claussen: his visionary thinking created the context which made possible this unique project. The authors' friend Dirk Stegelmeyer: his inputs in the manuscript process were continuous drivers to enhance quality. The authors' wife Verena: her partnering support was the key enabler for the successful result.