Introduction: State Departments of Transportation (DOT) use performance management for a variety of functions from statewide budgeting and resource allocation to asset and systems management and executive dashboards.

The concept of performance measurement, or measurement on a regular basis of the results (outcomes) and efficiency of services or programs, is nothing new in the public sector. Whether it was known as the RAND Corporation's "systems analysis" in the 1950s or Planning-Programming-Budgeting Systems (PPBS) in the late 1960s, the need to better understand and control outcomes has always been recognized.

Consistent with this trend in the public sector, the use of performance measurement has been embraced by the federal, state, and local transportation agencies across the United States. The sheer breadth and complexity of the transportation network in this country, however, poses a significant logistical and conceptual challenge in the collection, organization, analysis, and application of information based on performance measures as a whole. Fortunately, as the result of the development of better tools and methods, there are a number of successful performance-based transportation programs from which lessons can be drawn.

As demonstrated by these examples, the benefits of a performance-based highway program are numerous:

• It allows for more efficient allocation of increasingly scarce resources;

• It aids in the development and justification of budget and project proposals; and

• It holds government agencies responsible for funding, constructing, maintaining and operating the highway network accountable to the road users and the public at large.

At the same time, there are inherent limitations in performance measurement. First, performance data do not, by themselves, tell why the outcomes occurred. Examining performance data does not tell the story behind the numbers, nor provide the context under which such data was generated. Second, some outcomes cannot be measured directly, such as prevention of undesirable events. Third, information provided through performance measurement is just part of the information managers and elected officials need to make decisions. Fourth, because the range of factors and considerations faced by state DOTs around the country varies from state to state, it is important to avoid using performance measures as a "one-size-fits-all" tool to rank and draw absolute conclusions of state DOT performance.