The study sought to establish the extent to which the district municipalities' performance management system impacted on service delivery in local municipal communities. The quantitative approach was adopted in the present study. The study used a structured questionnaire to collect data from a sample of 70 human resource officials, political office bearers, administrators and political structures. The findings show that regular monitoring may improve the performance management system of the municipal activities resulting in improved productivity and profitability. The findings of the study reflect that financial constraints affect the employees' performance. The study recommends that Vhembe District Municipality (VDM) develop fundraising strategies to generate funds to enable the employees to perform their assignments.