Compressor discharge temp is measured on the discharge line about 6 inches from the compressor.

Superheated vapor enters the compressor and is compressed, which adds to its heat content, which in turn gives us higher discharge temp along with the higher pressure.

In general, the higher the compressor inlet superheat, the higher the discharge temp as they go up and down together.

However, if the discharge temp rises without a corresponding rise in inlet superheat, this would indicate a possible problem with the compressor.

So... we might say that the discharge temp, in combination with other indicators, gives us a very general feel for the overall health of the system.

That said, I prefer to look much closer at system performance and do not view discharge temp as an important indicator. I very rarely bother measuring it.