Performance management enables managers to monitor and evaluate how well employees are performing. Monitoring and evaluation systems are useful tools that let managers know whether employees are deserving of raises, promotions or, in some cases, termination. Managers may use one or a variety of monitoring and evaluation tactics to assess their employees.

Live Observations

Live observation is form of monitoring and evaluation that requires the manager or a consultant to observe an employee carrying out his job duties. In a school environment, this may mean that the school administrator sits in the teacher's classroom for a day while the teacher educates her students. In an office environment, this could mean that a manager shadows the employee during meetings and at his desk. Live observations give supervisors the chance to see employees in action and take notes about the things that employees do well or need to improve upon.

Performance Appraisals

A performance appraisal is an evaluation meeting between an employee and his manager, similar to the structure of an interview. According to the October 2005 article in Entrepreneur Magazine, "Appraising Employee Performance," performance appraisals serve as feedback sessions in which the manager and employee discuss key issues that are relative to the employee's performance that the manager observes. For instance, an appraisal evaluation may indicate that an employee needs to improve the quality of his work or needs to learn how to be better organized around his desk. Performance appraisals should be constructive. They are not intended to bash or belittle an employee.

Peer Reviews

Peer reviews are monitoring and evaluation activities that involve coworkers scoring one another on how well they carry out their jobs. During a peer review, each employee is responsible for monitoring and evaluating one other employee. Monitoring and evaluation tools are often used for employees to capture information and prompt them on what factors to look for. For instance, an employee may be asked to rate her peer's customer service skills. Managers collect peer reviews and assess them to see how everyone on the team scored. The review scores may be used by the manager to make changes in team assignments or to fuel a performance appraisal for individual employees.

Secret Shopper

Secret shoppers are activities that many companies use to find out how well employees perform. In this activity, someone from the company -- or hired by the company -- pretends to be a customer or client and interacts with the employee. The employee does not know that he is being monitored and evaluated by the customer or client. The secret shopper's experience with the employee is scored and given to a company manager for review.


Self-evaluation is an evaluation process in which the employee scores herself on her performance. Self-evaluations are used to give employees a fair chance to analyze their strengths and weaknesses. Managers use self-evaluations to formulate performance appraisals.