Embodiments disclosed include automatically determining alarm threshold settings for monitored battery cells in battery systems. Battery monitoring control units are provided that are configured to initiate battery performance tests (e.g., ohmic tests) on battery cells in a battery system. Failing battery cells are identified as those battery cells having battery performance characteristics outside defined battery performance threshold settings. An initial performance alarm threshold setting is established for each battery cell because of unique performance characteristics that can substantially change during initial charging cycles before the battery cells have settled. A settled performance alarm threshold setting specific to each battery cell is then established based on battery cell performance during the defined settling time period. In this manner, more accurate performance alarm threshold settings are automatically established for monitoring each battery cell based on the individual performance characteristics of each battery cell during the settling time period.