Objective, concrete, quantifiable metrics are the unsolved problem. Every one that I've ever heard of can be gamed by the developer. The only exception to this that I can think of is the metric of product success in the market. But it's too large-scale to be useful in measuring individual employees.

Subjective metrics are quite common and effective. That's how good programmers such as <insert favorite hacker hero here> are regarded as good.

Subjective metrics include observation over a long period of time. It may be months before you are sure someone good is underperforming.

Not when you are deciding whether or not someone should be let go. Every employer should know whether a developer is doing an acceptable job.