This paper introduces a method to improve the performance of power systems using demand side management to overcome the problems of increasing load demand. Defining suitable demand reduction levels can cause a significant enhancement for the entire network. Therefore, the sensitivity factors related to each load centre are defined to rank the load centres according to their priority. According to these factors, the best required load reduction can be obtained at each load centre. The recommended reduction level has to ensure overcoming the problems associated with the voltage profile and transmission lines overloading due to the increase in load demand. The IEEE 30 bus system is used to highlight the demand-side management strategy under different loading conditions. Some simulation results are introduced to show the importance of considering the sensitivity of load centres when defining the reduction levels at each load centre. The recommended demand side management is compared with the load shedding technique as an emergency action to avoid the problems of line violation and to keep the system stable and secure. According to the obtained results, considerable improvement is achieved in the voltage profile, the network efficiency and power loss without the need for the load shedding. These results encourage the implementation of the introduced technique considering sensitivity of load centres in smart grid environment.