The aim of this literature study is to propose a conceptual performance management framework for medium-sized companies in the service sector at Bandung and its surroundings. Performance management is important for small and medium-sized enterprises in Indonesia in anticipation of global competition in the ASEAN region, which is called ASEAN Economic Community (AEC), at the end of 2015. The medium-sized companies in the service sector facing many limitations such as lack of human resource capabilities. In addition, all of the services sector in Indonesia which become AEC priorities, is far behind compared to other Asean countries. It should be anticipated with relevant performance management framework for medium-sized companies in the the service sector, in order to improve the performance of employees, the company's growth and to achieve a competitive advantage. The role of the company's strategic plan needs to be considered for proposing the dimensions of performance management. Performance management need be linked to the capability of human resources because of the employee's performance of the service company depends on the employee's ability in providing and delivering services and service to satisfy customers directly. Service quality is one of the employee performance in the service sector that can improve competitive advantage. This performance management framework will be followed up by empirical research in medium-sized companies in the service sector at Bandung and its surroundings, to be used as a prototype for other regions of Indonesia.