How to Track and Improve Employee Performance?

Correctly implemented employee performance tracking will not only boost the performances of individual employees but can also have a resounding impact on your company. Apart from overall business efficiency and productivity, it will help promote a culture that focuses on growth, personal and professional development, and business success.

But, before you can reap the benefits of employee performance tracking, you first need to know what it is and how to do it. And that’s where we come in. 

In this article, we’ll talk about employee performance tracking, its advantages for both employers and employees, and how to implement it in your company to boost performance. 

Let’s dive in!

How to Track and Improve Employee Performance?
In this guide, you’ll learn:
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What Is Employee Performance Tracking?

Employee performance tracking (or performance management) is a term that’s used to describe the process of monitoring and evaluating an employee's performance and productivity at work. 

This process encompasses collecting and analyzing various types of data that are directly associated with an employee's conduct at work, skills, and accomplishments. By collecting and analyzing this type of information, businesses can ascertain the actual level of contributions toward achieving the company’s goals that each employee brings to the table.

This further allows employers to ensure that all of their employees are working effectively, meeting their goals, and are in tune with the company’s overall business strategy. 

Now, the question is – why is that important? And, what sort of positive effects can employee performance tracking have on business success? Let’s take a look!

Benefits of Employee Performance Tracking

Employee performance tracking is not solely done for the benefit of the company and its goals. It can also help employees grow and achieve theirs as well.

Benefits of Employee Performance Tracking for employers and employees

Let’s review some of the most common advantages employee performance tracking can bring to both companies and employees alike. 

Advantages for Employers

  • Increased productivity – Regular performance tracking can help employees stay more focused on their tasks. When employees are aware that their performance at work is being measured, they will be more likely to stay on track and meet deadlines. This inevitably leads to increased productivity and efficiency
  • Making data-driven decisions – The information from employee performance tracking can be used to improve a company's decision-making processes, such as resource management and allocation, talent management, and various other business operations and procedures.  
  • Better performance management – Employee performance tracking allows companies to more easily identify high performers as well as employees who require additional training or management support. By rewarding top performers and providing guidance to those who need it, companies can actively work on creating a more effective and motivated workforce. 
  • Promoting employee accountability – Performance tracking is a good way to promote a culture of accountability among the workforce. It can help foster a sense of increased responsibility, which can in turn lead to a more dedicated group of employees.
  • Sustained improvement of business processes – Tracking employee performances and analyzing that data helps companies make necessary adjustments and further streamline their business processes, and improve their products or services. 

Advantages for Employees

  • Clear expectations – Employee performance tracking gives employees clear goals and expectations. It removes uncertainty from their work and allows them to fully focus on their job obligations and tasks.
  • Allows for professional growth – A big part of performance tracking is giving employees valuable feedback that they can use to further their professional development. 
  • Improves job satisfaction and motivation – As we mentioned previously, employee performance tracking allows companies to identify high performers. By recognizing and rewarding their performances, employers can boost morale and improve the overall job satisfaction of their best employees.
  • Promotes a culture of fairness – by tracking employee performance, companies can ensure that both recognition and rewards are given based on merit and not personal relationships. This helps promote and create a culture of meritocracy, where everyone's work is valued and rewarded equally.

How to Track and Boost Employee Performance?

How to Track and Boost Employee Performance?

In order to reap all the above-mentioned benefits, you have to start tracking employee performance. There’s no other way about it. Here’s how you can do that: 

1. Set Clear, Measurable, and Actionable Goals 

It would be difficult, there we say impossible, to improve that which you do not measure. So, to boost the performance of employees, you should first try and visualize what the employee performance improvement process looks like within the context of your company. 

You have to set clear and measurable productivity goals that align with the goals and objectives of your company. Doing this correctly is important as it will directly impact the success of your entire performance improvement process. What should you do first?

Establish clear strategic priorities for your business. After that, use a specific goal-setting framework that best suits your industry, company, or market requirements. Here are a couple of the most common goal-setting methods that you can use to your advantage:

  • SMART goals – This method helps you set company goals that are specific, measurable, achievable, relevant, and timely. The goals that you set for your company will subsequently impact the goals you set for your employees. The SMART method will also push you to prioritize tasks or projects that will push you towards reaching your company’s objectives sooner rather than later. It also emphasizes the importance of time management, as one of the key aspects for success.
  • Key Performance Indicators or KPIs – This goal-setting framework focuses on quantitative metrics, such as revenue per employee, conversion rate, customer acquisition cost, etc. Tracking these types of performance metrics is a good way to measure and compare changes in your company’s operational success over a period of time (e.g. monthly, quarterly, or annually).
  • Objective & Key Result or OKRs – These are goals (usually monthly or quarterly), that are publicly shared within your company. Meaning they are known to both the leadership and employees. Most commonly, a strategy based on OKRs has around half a dozen main objectives. Each of the objectives includes a similar amount of quantifiable key results aimed at reaching said objectives in the most efficient manner. 

Once you’ve chosen a goal-setting method while keeping the exact requirements of your company in mind, it’s time to pick out the specific employee performance metrics you wish to track. The goal behind it is to help your business improve its effectiveness and productivity and achieve strategic operational goals faster and more reliably. 

This leads us to the second step of employee performance tracking.

2. Gather Employee Performance Data 

There are many different tools and methods to collect employee performance data. Which one or ones you end up using will ultimately depend on the type of metrics you’re looking to track. 

The most common types of employee performance metrics include:

  • Sales targets;
  • Percentage of revenue growth; 
  • Customer acquisitions and satisfaction;
  • Output per hour;
  • Number of completed tasks;
  • Attendance and punctuality;
  • Quality of work;

Tracking these, or some of the many other employee performance metrics can prove extremely valuable to companies, managers, and employees alike. For example, if you wish to collect information about employee efficiency and see how much time each of them needs to finish a specific type of task, you should try using time-tracking apps. Most of them are intuitive, easy to use, and don’t require much input from employees. They will allow you to make data-driven decisions about resource management and allocation. 

On the other hand, if you’re interested in tracking workload and task distribution to ensure none of your employees are overburdened, you could go with project management software. They are readily available on the market, and they usually come equipped with various features or add-ons that will give you an opportunity to tailor the entire employee performance tracking process to your exact specifications.

If you're already using a particular tool for project management, you should consider integrating it with any solution that allows you to track the exact metrics you are looking to collect data on. For example, if you want to track the work hours of your employees, you might want to go with time-tracking software. 

So, you’ve set your company goals, picked out the employee performance metrics you wish to track, and chosen the tools to aid you in that endeavor. What’s next?

3. Prepare and Analyze Data 

The information you gathered will be useless if you don’t analyze it. To start with, you should prepare the data you’ve collected:

  • Organize it in a structured format (e.g. spreadsheets or databases) to simplify the analysis process;
  • Establish performance targets you can use to compare the collected data with;
  • Categorize the data based on chosen specifications (e.g. department, job position, etc.);
  • To make the analysis easier to perform, you could create a visual representation of the data (i.e. charts, graphs, etc.)

After you’ve prepared the employee performance data and made it easier to sift through, it’s now time to actually analyze it. There are various analysis methods you can use — which one you ultimately choose to go with will depend on your or your company’s exact needs and wants. The most common methods for analyzing data include:

  • Descriptive analysis – A summarized version of performance metrics presented in a clear and understandable manner. It’s used to provide an overview of an employee's performance. 
  • Comparative analysis – Includes comparing performances of different employees, teams, or departments within a company. It’s used to identify top and average performers, as well as outliers.
  • Trend analysis – Used to identify patterns in employee data to reveal if the performance is improving, declining, or without change.
  • Correlation analysis – Used to compare the relationship between different performance metrics or between performance metrics and other variables. For example, it can be used to assess whether there is a correlation between employee satisfaction levels and performance metrics. 
  • Cost-benefit analysis – It determines the financial impact an employee's performance can have on the company. Also, helps evaluate the quality of employee training, development procedures, or performance improvement initiatives and their overall effect on ROI (return on investment).

But that's not the only part of this journey. There’s one more thing you should do if you want to improve employee performance.

4. Communicate Results With the Team

Clear communication and sharing honest feedback and the results of performance reviews with your team or employees is the last step to improving their overall productivity levels. 

You can do this through organizing 1-on-1 meetings, team or department meetings, or, by sending them performance reports (i.e. you can highlight the job areas where you want them to improve and provide them resources or training to do so).

If you go with regular meetings, you could use that as an opportunity to gather feedback from your employees about the entire performance improvement process. Is there anything that they see could be improved? Maybe there are some performance metrics that you’ve overlooked? You’ll be surprised what you can learn from your employees if you just talk to them openly and honestly. 

Tools for Tracking Employee Performance

Time Tracking Software 

Time-tracking software, such as My Hours, is commonly used tool for collecting various types of employee performance data, including:

  • Number of work hours;
  • Attendance;
  • Duration of specific tasks;
  • Number of completed tasks;
  • Overtime hours;
  • Peak work hours;
  • Workload balance;

With this type of software, you can gather a lot of data that is directly related to 

employees’ efficiency and productivity levels, which you can later use in your employee performance analysis. You can also track attendance and punctuality, which can serve as metrics to better understand employees' dedication to your company’s mission, goals, and objectives.

Project Management Software:

Project management software can be used to track different performance metrics that are most typically directly connected to tracking employees’ overall level of contribution to specific tasks and projects. 

Type of employee performance metrics you can track with project management software include:

  • Task completion rate;
  • Project success;
  • Task duration;
  • Team collaboration;
  • Team communication;
  • Workload balance;

The most widely used project management tools are:

  • Asana;
  • Trello;
  • Microsoft Project;
  • Basecamp;
  • Jira;

Performance Management Software

Performance management software can be used to streamline various processes included in both managing and evaluating employee performance. These sorts of tools can help companies keep track of employee performance metrics, such as:

  • Task completion time;
  • Skill development and training success;
  • Time to reach project goals (both team and individual);
  • Quality of work;
  • Project success rate;

The most popular performance management software on the market includes tools like:

  • Workday;
  • BambooHR;
  • SAP SuccessFactors;
  • Oracle's HCM Cloud;
  • Trakstar;

Employee Surveys and Feedback Tools

Employee surveys and feedback tools allow companies to collect direct employee feedback on subjects such as:

  • Employee satisfaction and overall workplace experience;
  • Employee engagement;
  • Employee performances;

These tools can help companies create more responsive work environments in which employees feel valued and heard. The most popular tools of this type include:

  • SurveyMonkey;
  • TypeForm;
  • Google Forms;
  • Glint;
  • Culture Amp;
  • Peakon;

Templates for Tracking Employee Performance

Employee Performance Evaluation Template


This template includes the most common KPIs, such as skills, productivity, work attendance, ability to work within a team, and more. These KPIs should be treated as uniform performance standards that all employees should adhere to. You can use the rating system as a means to review employee’s work qualities. 

Another part of the Employee performance evaluation template includes a section about an individual employee’s goals. There you should note down the employee’s successes and weaknesses. Once this is done, you can create a step-by-step program to help your employees work on the aspects of their performance that need improvement.

Employee Performance Evaluation Template

An Annual Evaluation Template


You can use this template to examine employee performance from previous reviews so that you can evaluate it again, but this time on a larger scale (annual). In terms of filling out the individual goals section, describing them in modest detail is more helpful than simply using numbers. 

You should use our annual evaluation template to record an employee’s accomplishments since the last performance report. And don’t forget to include the weaknesses a specific employee exhibited in their work performance throughout the year. Add details and share examples. 

Feedback is important for both employees and employers. It’s one of the best ways to improve performance. That’s what the third part of this template is all about. Use it to address any sort of problems your employees might be experiencing in regard to their work. 

An Annual Evaluation Template

Self-Evaluation Template 


Self-evaluation can help employees review their work, but can also be helpful for managers. They can use the results from the employee evaluations they made and compare them to their self-reviews. This can give managers an insight into how employees view their own work contributions and skills, as opposed to how the company views them. And, it’s always a good idea to get employees thinking about their work performance. 

The first section of this template is all about employees' work obligations. In this part, they will have an opportunity to share their thoughts about their job, current obligations, and most important tasks. In the subsequent sections, they’ll be prompted to review and evaluate their work accomplishments, performance, as well as what they consider are the areas that need improvement.

An Annual Evaluation Template

An Annual Evaluation Template
An Annual Evaluation Template