If MS Project Server is not an option and you want to track hours I would create standard documents to show assigned work for people (use Resource Usage) and have resources report back weekly as to what was accomplished. Enter in the completed work, re-schedule uncompleted work based on a status date and reissue new assignments. The assignment sheets are by resource so you could also use the Resource Usage view as an entry view to enter tracking data.
If you are only interested in tracking percent complete, create a standard like 25% means a task is started, 50% means that it is more than half completed, 75% means the work was delivered, and 100% complete means the work has been accepted. Use the grouping I mention above, collect updates weekly and reschedule uncompleted work. To increase accuracy and help move the schedule forward get start and finish dates for tasks.
Either way to track a large schedule manually is a lot of work but it can be made easier using filters, groupings and a process.
