The purpose of this study is to gain insight on the implementation of a newly adopted Performance Measurement System (PMS) in Sabang local government-Indonesia. It is a case study based qualitative research which was carried out at the local government of Sabang. Data were collected through document analysis, questionnaires, and followed by semi-structure interviews. The questionnaires were distributed to key officers of 7 working unit/departments (or Satuan Kerja Perangkat Daerah) out of 31 departments in total within the city of Sabang. The interviewees are head of the departments, the secretary, head of program and reporting division of each working unit. The data were analyzed by using qualitative data analysis technique. The institutional theory was used as a basis for analyzing and discussing the results obtained. This study uncovers that the PMS concept and functions have not fully understood by most of the key officers. Consequently, the recently developed PMS is not utilized optimally and thus it does not contribute to a better performance management system of the local government. The reasons why it is now work well are incapacity of the human resource, unclear job description, lack of organizational commitment and the absence of the performance evaluation. Thus, it can be concluded that pre-requirements and precondition need to be fulfilled before adopting a new PMS, especially where the PMS is not initiated by the organization itself, rather imposed by the central government or other organization.