In micro-electro-discharge machining drilling, the problem of tool wear is a well-known fact. In order to minimize the effect of tool wear on the accuracy of fabricated product, an online tool wear monitoring and compensation system needs to be integrated with the micro-electro-discharge machining machine. The existing monitoring and compensation system very much relies on the pulse discrimination. The available systems assume that pulses are isoenergetic and are applicable to a single parametric setting only. In order to make the system more robust, a new pulse discrimination and tool wear compensation strategy which is suitable for a wide range of parametric settings is proposed. In this context, an empirical relationship between "average energy" (AE) and "volume removal per discharge" (VRD) is established and verified with experimental results.