"The performance management design itself is not evolving as quickly as the objectives and the purpose that we have set out for what we want it to do."—Lesli Jennings, Senior Director in Willis Towers Watson's Talent Management & Organizational Alignment practice in Chicago.

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Well then, how to keep track of employee performance? Do we even have the right answer to this question?

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There will never be one all-encompassing answer, but there are strategies that you can adopt and adapt.

5 Methods for Tracking Employee Performance

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Most industry leaders agree on the value of the following performance assessment methods:

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1. Traditional Review Style

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This approach includes yearly or semiannual evaluations. A Society for Human Resource Management (SHRM) article reports that according to a Workhuman’s study, 49% of companies still limit evaluations to these intervals.

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This method provides structured assessments and rewards performance but can be biased and overlook minor wins.

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The problem is that the review can easily be too subjective if the manager is not trained well. Also, workers often don’t get enough information to go on if they want to develop and improve.

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Keep these deficiencies in mind and find a way to solve them that corresponds to your team's work style.

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2. Continuous Feedback Sessions

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A more modern approach to performance assessments emphasizes the need for an increased frequency of official appraisal sessions.

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Some companies have abandoned annual reviews even a decade ago. They recognized that retrospective assessments were not seen as beneficial by employees. Managers deemed them too time-consuming. Instead, these companies opted for quarterly check-ins and removed its numerical rating system.

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The lesson here is to prioritize meaningful, two-way feedback discussions between employees and managers. Choose several uniform questions for each quarterly session, including feedback about the manager. Other topics should vary depending on the individual employee and their role.

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3. Comprehensive 360-Degree Approach

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This holistic feedback method involves collecting input from managers, peers, subordinates, and even clients, coupled with self-evaluation.

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If the employee's perception matches external feedback, it indicates aligned performance expectations.

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Discrepancies highlight areas for growth, and managers provide improvement plans.

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Despite promoting a feedback culture and offering varied perspectives, this approach may harbor biases and miss timely opportunities.

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4. Measurable Performance Parameters

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Most companies rely on OKRs (Objectives and Key Results) and Key Performance Indicators (KPIs). 

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OKRs align employee efforts with company goals and ensure their progress is visible. For instance, an objective to "boost customer satisfaction" would include measurable key results like reducing response times.

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KPIs translate key business activities into measurable values to gauge success. They could include metrics like revenue, customer loyalty, or new clients. KPIs are useful for establishing clarity, setting goals, and motivating improvement.

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The numbers-based system’s upside is that it provides solid proof of a person’s work and supports objectivity in a manager’s evaluation. The downside is that it doesn't take into account elements like teamwork, etc.

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5. Time Management & Productivity Monitoring

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Time tracking software allows managers to measure the productivity of employees by analyzing how they spend their work hours.

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Employees log project hours which provides insight into time allocation and productivity patterns. This approach helps managers plan and employees prioritize tasks.

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Still, over-monitoring can harm creativity and privacy, and simply tracking time doesn't capture work quality. This is why the monitoring software needs to allow customization.

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One of the most flexible and scalable tools is Insightful. This software allows:

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Automatic and manual clocking in and out

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Time tracking for each task

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Manual logging of time per project

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Monitoring the level of productivity depending on the apps and websites that the employee uses minute after minute

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Break time, productive apps and websites, etc. can be customized for each employee which makes this monitoring tool perfect for a wide variety of industries.

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Additional Tips on How to Monitor Performance of Employees

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When figuring out how to monitor performance of employees, remember the following expert tips:

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💡 Customize the Metrics: Tailor assessments according to specific job functions and industry standards to refine individual and team development plans.

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💡 Balance the Quantitative vs. Qualitative: Incorporate both quantitative (e.g., sales numbers, production targets) and qualitative (e.g., creativity, teamwork) measures to ensure a holistic evaluation of performance.

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💡 Explore Market Benchmarks: Compare employee performance against market benchmarks. This can guide decisions around promotions, compensation, and training needs.

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💡 Track Long-Term Results: Identify consistent high performers, potential leaders, and those needing development, to plan resources more effectively.

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💡 Gather Feedback: Ask employees for feedback. This will boost morale, foster a culture of trust, enhance engagement and productivity, and give leadership valuable insight.

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Explore and experiment. This is the only way to find the perfect formula for performance reviews that completely fit your organization. To help your efforts, rely on a flexible productivity monitoring tool such as Insightful.