The Annual Performance Agreement (APA) mechanism was established by the Prime Minister through Government Order on 19 December 2013 to institutionalize Government Performance Management System (GPMS). It helps as a management tool to inculcate a performance based culture at all levels of the government. It is also to support and ensure effective implementation of the Eleventh Five Year Plan to achieve the strategic objectives, targets and results that the government has pledged to the people. The APA is primarily signed between the Prime Minister and

Ministers, Heads of Autonomous Agencies and Dzongdags, and the signing is then cascaded down the management hierarchy of respective ministries, autonomous agencies and Dzongkhags to ensure devolved responsibility and accountability for the results.

The common objectives of APA as stated in its general Preamble of all APAs signed are:

1. To establish clarity and consensus about annual priorities for the Ministry/Autonomous Agency/Dzongkhag consistent with the 11th Five Year
Plan and other priorities of the Government;

2. To make the Ministry/Autonomous Agency/Dzongkhag fully responsible for driving implementation and delivering the results against the annual
priorities; and

3. To provide an objective and fair basis for evaluating the Ministry’s/Autonomous Agency’s/Dzongkhag’s overall performance at the end of year.

The Prime Minister Office (PMO) through its Government Performance Management Division (GPMD) is aiming to develop proper institutional framework, processes and systems for APA to support its planning, implementation, monitoring and evaluation. Among the different measures put in place to institutionalize the APA is appointment of Focal Points in each of the signatories of APA; requirement to cascade the signing of APA from Minister/Head of Autonomous Agency/Dzongdag down to the Division Heads/Sector Heads/Gups; and establishment of Government Performance Management System (GPMS)