Recently, many public transportation agencies have begun to consider changing the way that they manage highway maintenance operations. One system under consideration, already well developed for private businesses, is performance measurement. While there are references for developing performance measures for other public services, there is nothing relevant that applies specifically to highway maintenance. This paper examines the general theories of performance measurement systems, based on current conditions and practices in the province of Alberta, Canada, and applies them to develop examples for highway maintenance. This paper concludes with a brief analysis regarding the extra considerations on a performance measurement system when private companies under contract to a public agency perform the work.