Competence encompasses knowledge, skills, abilities, and traits. It is gained in the healthcare professions through pre-service education, in-service training, and work experience. Competence is a major determinant of provider performance as represented by conformance with various clinical, non-clinical, and interpersonal standards. Measuring competence is essential for determining the ability and readiness of health workers to provide quality services. Although competence is a precursor to doing the job right, measuring performance periodically is also crucial to determine whether providers are using their competence on the job. A provider can have the knowledge and skill, but use it poorly because of individual factors (abilities, traits, goals, values, inertia, etc.) or external factors (unavailability of drugs, equipment, organizational support, etc.). This paper provides a framework for understanding the key factors that affect provider competence. Different methods for measuring competence are discussed, as are criteria for selecting measurement methods. Also, evidence from various research studies on measuring the effectiveness of different assessment techniques is presented. (author's)