Being capable of assisting administrators in achieving the goals of monitoring, encouraging, and improving performance, performance evaluation has been widely employed both in business administration and public administration. Theories of performance evaluation have developed over the years from the concept of focusing on procedure management that emphasizes on evaluating individuals' performances to objective-oriented management that combines organizations' and individual's objectives, and are now integrating with strategy management, budgeting, incentive system, and human resources development. Performance evaluation and the establishment of performance indicators are becoming more systematic and complex as a result of the evolution of performance evaluation theories. This study discussed techniques for evaluating public sector performances and approaches to establishing performance indicators in the hope that people will have a better and deeper understanding of such techniques and indicators, as well as ideas of how government performances will be evaluated in the future.