Performance testing aims to evaluate how well a system performs under stress by measuring response times, throughput, and resource usage. It identifies potential performance issues by subjecting the system to different types of workload simulations like load, stress, spike and soak testing. Key metrics measured include response times, hits/sec, CPU/memory utilization, and network latency. An effective performance testing approach involves defining goals, requirements, test scripts, monitoring of clients, servers and network during testing, and analysis of results against benchmarks to fine-tune the application.