The environment within which organizations operate is dynamic and not static. To satisfy thernneeds of its stake holders, to grow and survive Organizations be it businesses or publicrnshould respond to the changes that occurs in the environment. A healthy organization whichrnneeds to win the wish and interest of its stake holders and their managers always devise newrnmechanism and new ways or tools which help them to be efficient and effective.rnPerformance management is also one of the responses devised by managers for the everrnchanging environment. Public organizations too are not different in this respect.rnrnThe Ethiopian Civil Service is now implementing the Civil Service Reform Programmes. Thernreform programme has five sub programs, which intern sub divided in to so many projects.rnIntroducing the performance management system to the Ethiopian Civil Service is one of thernprojects of the human resource administration sub-programmers. The major objective of thernproject is to find ways or tools which able to replace the traditional way of performancernappraisal by the better and a new one. The performance based management system with a sixrnstep one was selected to implement in the Ethiopian Civil Service.rnrnThe aim of this paper is to identify the challenges, problems and limitations that face inrnimplementing the performance based management in Addis Ababa Civil Service takingrnAddis Ababa Education Bureau as a case. Both the primary and secondary data sources arernused in order to substantiate the findings.rnAccording to the research findings, the implementation processes did not as it was designed.rnThe performance based management framework which selected for the Ethiopian CivilrnService had not been well understood by both managers and employees. The limitations inrnterms of capacity, attitudes and lack of commitment also the reasons behind the problems