Performance management systems in public organizations have grown in importance since the advent of new public management, but they often have a hard time delivering on their promises. This chapter discusses how managers can use performance management tools without demotivating their employees. The chapter points to six guidelines which should be kept in mind when using such tools. Managers should be given procedural autonomy; performance information should be used to increase learning; links between performance and rewards should be considered carefully; performance information and management practices should be used to support professional development and to avoid negative motivational effects and gaming; performance information should be used as a basis for dialogue; and, finally, performance management should increase employee autonomy and avoid documentation overload.