Performance management in the public sector is faced with a unique batch of challenges, and these challenges need to be addressed and overcome if universities can hope to succeed in achieving their missions. And yet, many organizations are not even aware that these challenges exist. They’re using recommended models and tools but often applying them in the wrong way or wrong context and therefore not seeing the results they would hope for oganizations have to build their capacity and improve their organizational effectiveness with an eye towards sustainability and long-term change. Student recruitment is driven by the need to fill available places, but is also influenced by issues of quality, income generation and equity in participation. Funding is a constant source of concern, for both teaching and research, with institutions looking to both diversify and maximise income streams, whilst also looking to achieve enhanced efficiency and value for money. Globalisation and internationalisation, and new technology, pose additional challenges to universities. However, arguably the greatest pressures arise from increasing competition and marketisation, and from the politicisation of higher education.