The performance assessment of faculty members’ output like teaching-learning activities, research and administrative activities as initiated by the Indian government in 2010 through performance based assessment scheme (PBAS) aims at making the faculty members accountable for their work and thereby ensuring quality output. For each activity, a faculty member is accorded certain points. The minimum points are required for entry as well as promotion to the next level. It is not difficult to understand that under this regime, the incentives are designed assuming that faculty members are rational, self-interested and would continue to maximize their individual scores. But, introducing PBAS may not serve the purpose of improving the quality of faculty members’ work because the motivation level and values (that is the principles which govern their actions) that they attach to their work differ amongst faculty members. The legal requirement of compliance may instigate some of the faculty members to resort to unethical practices or shirk away from work and report output in terms of numbers only, compromising on the quality, which is called as fabrication. This happens because there is an information asymmetry in assessing the behaviour of faculty members by the Indian government, and thus the higher education sector might suffer from adverse selection, which would affect the quality of output produced. The chapter seeks to present a possibility of different actions that could be taken by the faculty members in the wake of PBAS and its impact on quality of output, the very purpose for which performance of faculty members is assessed. © 2018 selection and editorial matter, Satya Sundar Sethy; individual chapters, the contributors.