With the promotion of ecological civilization in China, since the 18th CPC National Congress, eco-compensation practices have advanced rapidly. Evaluation of implementation effectiveness is the core issue to ensure continuous improvement in the efficiency of the eco-compensation mechanism. This study analyzes the necessity and feasibility of incorporating gross ecosystem product (GEP) into the performance appraisal for ecological compensation. The existing performance appraisal mechanisms need to be further improved. The performance appraisal of eco-compensation based on GEP is a direct appraisal based on the output of ecosystem services. An appraisal based on GEP can unlock the innovation potential of subjects that receive compensation from the supply of ecosystem services. GEP has less distortions of the evaluation of ecosystem services, and thus, can be used as an optimization index for county-level environmental appraisals. However, we cannot include GEP in the performance appraisal system of eco-compensation, as this would deny the role of the performance appraisal system based on types of activities. Several policy recommendations are proposed based on these findings, such as organically combining GEP with the existing performance appraisal system, exploring the establishment of comprehensive eco-compensation mechanisms, and reducing the loss of eco-compensation efficiency through the improvement of appraisal and incentive mechanisms