Performance management done the right way, in 6 steps.

Let me start by saying that performance management is not a one-size-fits-all activity. The process can vary from one individual to another, or one company to another. However, there are certain guidelines that can be followed in order to make it more effective.

The new-age performance management

Performance management can be summarized as a means to ensure employees are aligned with organizational goals. It’s a formal process that helps employees to improve their performance by providing them with feedback, coaching and development opportunities.

Performance management isn’t a one-time event or exercise; it’s an ongoing process that focuses on improving the skills, knowledge, and behaviors of your team members in order to deliver the best results for your organization.

1. What can you learn from evaluations and assessments?

Evaluations measure competence. Assessments measure competencies.

An evaluation is a way to determine how competent someone is at a particular task or job. An assessment, on the other hand, looks at a person's competencies, which are the combination of knowledge, skills, and behaviors that enable success.

For example, an employee who is skilled technically but lacks leadership and teamwork abilities may receive a low overall performance rating due to a lack of these important competencies.

Evaluations measure competence

Let's start with some definitions. Competence is an ability that someone has mastered. Product manager competence, therefore, refers to the skills and abilities (i.e., competencies) that a product manager needs to be effective in their role.

Think of it this way: if you were building a house and needed someone to build your foundation, you'd want that person to have experience laying foundations before they started on yours!

So what are these competencies? What do they look like? And how do we identify them?

Assessments measure competencies

Competencies are the core characteristics that define a role. For example, if you wanted to measure whether someone is ready for a position in product management, you would look at the competencies required to be successful in that role.

For PMs, there are different kinds of competencies: knowledge-based (knowing how to do something), skill-based (being able to do something), and behavioral (how you behave or interact with others). For example:

• Knowledge-based skills include having an understanding of company strategy, best practices in product development and marketing communications methods.
• Skill-based skills include coaching employees effectively, managing conflict between stakeholders and taking initiative on projects where you don’t have authority.
• Behavioral traits include being results-oriented; prioritizing tasks based upon urgency rather than importance; achieving deadlines consistently without being asked multiple times by coworkers or managers

2. So, what are PM competencies?

The first thing to say is that there is no single, universally accepted list of PM competencies.

1. Leadership: PMs must be able to inspire and motivate their teams to work towards a common goal.
2. Communication: PMs must be able to effectively communicate with their teams, stakeholders, and other stakeholders to ensure that everyone is on the same page.
3. Organizational skills: PMs must be able to manage complex projects with multiple tasks and dependencies, and be able to prioritize and plan accordingly.
4. Problem-solving: PMs must be able to identify and address problems as they arise, and be able to come up with creative solutions.
5. Risk management: PMs must be able to identify potential risks and develop strategies to mitigate them.
6. Time management: PMs must be able to manage their own time and the time of their team effectively to ensure that deadlines are met.
7. Budget management: PMs must be able to manage the project budget and ensure that the project stays within its allocated funds.
8. Stakeholder management: PMs must be able to manage the expectations of stakeholders and ensure that their needs are met.
9. Technical expertise: PMs must have a solid understanding of the technical aspects of the project they are managing.
10. Adaptability: PMs must be able to adapt to changing circumstances and be able to pivot as needed to ensure the success of the project.

3. Design a strong and robust product manager assessment framework

Once you've established a high-level strategy for how to manage your team, it's time to look at the specific tasks that will drive that strategy forward. One of the most important tasks is designing an assessment framework for your product management team.

When assessing an employee's performance, you need to be sure that your methods are fair and consistent across all employees. A robust assessment framework will help ensure this is true and make sure all employees receive fair treatment as they progress through their career at your company.

A robust assessment framework includes:

• A clear set of competencies (the skills and abilities needed in order to perform well)
• Measurable goals within each competency area that provide meaningful targets for performance improvement

4. How to design 360-degree feedback for product managers?

If you want to help your product managers improve their performance and grow as leaders, then a 360-degree feedback process is one of the best tools you can use.

But why does it matter?

• It lets you understand how others see your strengths and weaknesses. You may be very self-aware, but if everyone around you has a different perspective on how well you're doing at work, then it's likely that some of them will be right where they are supposed to be while others are not. This information is vital when deciding whether or not someone should get promoted into more senior roles within the company or given more responsibilities.
• It helps employees identify areas where they need improvement so they can focus their development efforts in those critical areas rather than wasting time trying to improve things they're already good at (or worse: focusing on things they shouldn't).
• A 360 feedback process gives managers an opportunity to discuss performance issues with employees in a constructive way before negative behaviors have become entrenched habits that are hard or impossible for either party to change later down the road!

5. What are some of the best PM competency models?

There are several well-known product management competency models that can be used as a framework for identifying the skills and knowledge required for successful product management. Some of the more widely recognized competency models include:

• The Association of International Product Management and Marketing (AIPMM) Product Management Body of Knowledge (ProdBOK®): This model defines the knowledge and skills required for effective product management.
• The Product Development and Management Association (PDMA) Product Development and Management Competency Model: This model defines the knowledge, skills, and abilities required for effective product development and management.
• The Pragmatic Marketing Framework: This model defines the knowledge, skills, and behaviors required for effective product management and marketing.
• The Intercom career ladder: it makes it clear to folks on your team (and to their colleagues who do peer reviews) what’s expected of the role, what’s expected of them to get a promotion (which is really the main question everyone has), and it makes it easier to do fair, consistent, well-weighted performance reviews.

The above (or any other) should only be used as a source of inspiration and benchmark against other product organizations.

In reality, the best PM competency model will be the one relevant to your organization and the industry it operates in. You need to put some time and energy in to create it.

6. Performance management needs to stay relevant and aligned with organizational goals, employee preferences and industry trends.

Performance management is an ongoing process. It's not just about performance reviews, but rather a comprehensive set of processes that can help identify and manage employee performance. Performance management needs to stay relevant and aligned with organizational goals, employee preferences, industry trends, etc., in order for it to be effective.

The culture of any organization should support its objectives; therefore it's important that you align your performance management system with the culture of your company. This way employees will feel engaged in their work as well as confident in their abilities to achieve results at work every day!

Bottom line

The bottom line is that performance management must be relevant to your organization and the industry it operates in. It’s no longer just about measuring competencies in employees, but it’s more about measuring today’s actual job requirements and developing new skills needed for tomorrow. It is a continuous improvement process to deepen your craft of being a great Product Manager.

Let me finish with this extract from Albert Camus' banquet speech for his Nobel Prize in 1957. Read it first and then replace "artist" with "product manager", and "art" with "product management". It perfectly summarizes the aspiration and principles any product manager should live by.

"For myself, I cannot live without my art. But I have never placed it above everything. If, on the other hand, I need it, it is because it cannot be separated from my fellow men, and it allows me to live, such as I am, on one level with them. It is a means of stirring the greatest number of people by offering them a privileged picture of common joys and sufferings. It obliges the artist not to keep himself apart; it subjects him to the most humble and the most universal truth. And often he who has chosen the fate of the artist because he felt himself to be different soon realizes that he can maintain neither his art nor his difference unless he admits that he is like the others. The artist forges himself to the others, midway between the beauty he cannot do without and the community he cannot tear himself away from. That is why true artists scorn nothing: they are obliged to understand rather than to judge. And if they have to take sides in this world, they can perhaps side only with that society in which, according to Nietzsche’s great words, not the judge but the creator will rule, whether he be a worker or an intellectual."