Knowledge management is recognized as an important weapon for sustaining competitive advantage and improving performance. The evaluation of knowledge management (KM) performance has become increasingly important since it provides the reference for directing the organizations to enhance their performance and competitiveness. This paper provides an understanding of factors that involved in implementing knowledge management concept to enhance organizational performance. Also, it provides an assessment tool that helps organizations to assess their knowledge management capabilities and identify the possible existing gaps in their knowledge management systems and suggest the possible ways to enhance organizational performance. The results show that all elements of knowledge management capabilities have a positive significant relationship with all measures of the performance at 1% level of significant; it means that there is a great correlation between knowledge management capabilities and organizational performance