Measuring supply voltage
Yes, this is the correct method for reading voltages. You do need to make sure your multimeter is set to DC mode and not AC mode. If it is on DC mode then you are not supply the chip enough voltage.

What are you powering it from? Either your voltage source is low (like if it is a battery) and should be replaced, or if you are using a current limited supply you could be hitting a current limit that is causing the voltage to drop.