Tracked changes are a great editing tool in Word. I find it especially useful when more than one person works on a document. It allows me to keep track of the changes someone else has made, so I can check I agree with them. Your supervisor will likely use tracked changes if they make editing suggestions to your document so you should make sure you understand how to view them and accept them.
Here is a short overview video and also some more detailed instructions
DemoTrainer (2008) Word 2007 Demo: Use tracked changes in documents
Microsoft (2014) Track changes while you edit
These are the settings I find most useful for using tracked changes: