This paper discusses performance measurement at water utilities and how keeping a good relationship with the user community, planning budgets, and staff compensation depend on performance measurement. Three principles of performance measurement are described. The first lists several different points to consider when measuring performance: quantitative measures; qualitative measures; cost measures; timeliness measures; customer satisfaction measures; and, employee satisfaction measures. The second principle states that performance measures should be tools for improvement; the third discusses how performance measures should measure what our users care about. Case studies are given.