Question: Does `Stack up against` mean comparatively to level up in performance?

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> Performance wise, junior students need to **stack up against** the seniors to set a high reputation.
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Is it a correct construction?

Answer: 
I don't think that the idiom can be used in that way. Here are some examples:

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> We wondered how London restaurants stacked up against Atlanta's.
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> Their gift doesn't stack up against mine
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> The new ​model of this ​car just doesn't ​stack up against ​previous ​models 
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The idiom refers to stacking up your poker chips against somebody else's: either your stack is as high as theirs, or it isn't. It's not something that you can "need to" or "try to". 

A better way of expressing what you want to say would be:

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> Junior students need to perform as well as the seniors to get a good reputation
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If you took the original sentence,

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> Performance wise, junior students need to **stack up against** the seniors to set a high reputation.
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> 
> 

and replaced "stack up aganist" with this,

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> Performance wise, junior students need to **compare to** the seniors to set a high reputation.
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it would have the same meaning. So you could say that "stack up aganist" means "to be comparable to".