Orientation: Institutions of higher learning in South Africa are fast embracing performance management system (PMS) as a mechanism for the achievement of teaching excellence and enhancement of research productivity. However, literature provided evidence to show that application of PMS in the private sector had failed to drive competition, efficiency and productivity.Research purpose: The main purpose of this article was to evaluate the perception of academic staff members of an open distance learning institution regarding the implementation of a PMS.Motivation for the study: PMS as a mechanism through which performance of academics is measured has been described as inconsistent with the long tradition of academic freedom, scholarship and collegiality in the academy. Moreso, previous research on the implementation of PMS was limited to private sector organisations, thus resulting in the dearth of empirical literature relating to its practice in service-driven public sector institutions.Research design, approach and method: The article adopted a quantitative research approach using census survey methodology. Data were collected from 492 academic staff from the surveyed institution using a self-developed questionnaire that was tested for high content validity with a consolidated Cronbach’s alpha value of 0.83. Data were analysed using a onesample t-test because of the one-measurement nature of the variable under investigation.Main findings: Major findings of the study indicated that respondents were satisfied with the implementation of the PMS by management. However, the payment of performance bonuses was not considered as sufficiently motivating, thus necessitating a pragmatic review by management.Practical/managerial implications: The findings of this article provided a practical guide to managers on the implementation and management of PMS as an employee performance reward mechanism in non-profit and service-oriented organisations.Contribution: This article provided an incremental contribution to the body of literature in the broad field of management and a further advancement of existing knowledge in the sub-field of performance management system.