Human resources, more specifically employees, represent an element within the organization, which the overall operations of the organization and its business success depend on the most. Therefore, it is crucial to monitor the work performance and contribution of each individual employee in the organization. More recently, the monitoring of performance is increasingly important for both the organization and the employee whose work is being observed. The main goal of monitoring employee performance is to achieve organizational goals and increase motivation in employees, which ultimately leads to improvement in the performance of assignments. Managers are the persons who are the most often in charge of monitoring performance, but apart from them, this task can be performed by colleagues and co-workers, consumers, and many others. When monitoring performance, several methods are available to the assessor that can be used, and the selection most adequately depends on several factors. Also, when carrying out this process, the evaluator may make a few intentional or unintentional errors which ultimately lead to wrong results. The most common errors that evaluators make are subjective errors, some of which are: halo effect, time error, context error, discrimination, etc. There are various ways in which these errors can be mitigated. It is extremely important that the assessment is carried out fairly and objectively to obtain realistic results, which then help managers make decisions about the observed employee. Employees can be rewarded or punished based on their work performance. Each organization wants to have motivated and high-quality employees who do their job well, and monitoring performance greatly helps the organization make decisions about employees. The aim of this paper is to present and explain the importance and purpose of monitoring performance.