The Victorian Local Government Act, 1989 introduced fixed-term performance contracts for all senior management staff. As a result, issues such as promotion, training, remuneration and contract renewal can now be directly influenced by performance evaluation. This paper examines the performance evaluation process in practice in order to determine its outcomes. We found considerable commitment by CEOs and senior officers to the system but quantitative outcomes were more difficult to identify. The study is set in six local government units in Gippsland, Victoria.