Performance management is widely assumed to be an effective strategy for improving outcomes in the public sector. However, few attempts have been made to empirically test this assumption. Using data on New York City public schools, we examine the relationship between performance management practices by school leaders and educational outcomes, as measured by standardized test scores. The empirical results show that schools that do a better job at performance management indeed have better outcomes in terms of both the level and gain in standardized test scores, even when controlling for student, staffing, and school characteristics. Thus, our findings provide some rare empirical support for the key assumption behind the performance management movement in public administration.