With coming of 90s, Knowledge Management, KM, became a fashion. Although, it is thought valid, but misguide grew more. One of them is to consider KM as files management and organization learning. KM is not as simple as only files management, but also sharing knowledge through study group or meeting. The other one is to take KM as information system building, and this problem is more complicated. Indeed, KM uses information system to help knowledge production and storage, but this system could be used unusually as if users dislike to use it.KM is a comprehensive issue in academic research. I try to analysis it on another way. The goal of KM is to produce valid or useful knowledge to improve organizational performance, and this goal is as same as Performance Evaluation. The basic function of performance evaluation is to manage the activities in the organization. Maybe we can say that good performance evaluation will produce valid and useful knowledge, and valid knowledge is the foundation of KM. In this paper, I tried to review this process of knowledge production of performance evaluation, and understand how it affected the KM in government. The key problem is who own the knowledge will take it as private property. The property right of knowledge caused knowledge owner didn't share their own actively. We must take this property right problem more carefully, and try to assign an incentive system to it.Keywords: Performance Evaluation, Knowledge Property Right, Information Asymmetry, Knowledge Management, Government Performance