Performance reviews are an essential part of climbing the career ladder in product. We caught up with product leader Alex Hughes to determine how to get the most from them, how much they have changed over time, and the most important factors to consider.
How do performance reviews in product management differ from other functions, and what types of reviews are there?
The only difference between performance reviews in product and other functions is the role-specific competencies you’re assessing. Each discipline—whether product, engineering, sales, or operations—has its own relevant skills, though not mutually exclusive. Cross-functional partnership might be a shared competency across each department in an organization. While product discovery or optimization is a product-specific skill.
Many organizations that I’ve been part of have two official performance reviews each year at six-month intervals. Done well, these can be useful checkpoints to zoom out and reflect upon progress and lessons learned over a longer timeframe. It’s a great way to assess trajectory and how small improvements you’ve made in your day-to-day are stacking up.
“As a leader, performance reviews provide an opportunity to reward top performers while ensuring they’re aligned with high-value opportunities that sustain engagement.”
However, just as many organizations and managers use performance reviews as their sole opportunity to provide feedback to their direct reports. They haven’t developed the muscle to give direct, actionable feedback in the moment, which creates a worst-case scenario in performance reviews where surprises come up. I’ve been in situations where an IC (individual contributor) rated themselves as exceeding expectations during an annual performance review and their manager rated them as failing to meet expectations. They were on opposite ends of the scale. If you’re doing it right, nothing in a performance review should be a surprise because you’ve been coaching and providing feedback along the way.
Using performance reviews as your sole chance to provide feedback is an antiquated, ineffective approach to managing performance because your feedback is stale and no longer relevant. If you’re providing feedback on something that happened last month, it’s difficult to remember context, it’s too late to make corrections, and people often get defensive because it feels like you’re cataloging their mistakes without providing real feedback when it matters.
Because of this, weekly 1/1s are far more effective touchpoints to provide performance feedback and coaching. And even better when you can provide real-time feedback in debriefs or a quick note after presentations, client calls, etc. I previously worked with a sales leader who was exceptional at this. After important calls, we would debrief for five minutes, reflect on the call, discuss the next steps internally, and give feedback to each team member about what they did really well and what to think about improving the next time around. No ego, everyone improved as a result.
“At a minimum, weekly 1:1s allow you to unblock your team faster, offering more strategic context to make decisions effectively, help top performers manage their energy, align top performers to high-impact work, and help low performers course correct before it’s too late.”
What factors do managers tend to measure in product?
It depends on the level and size of the company. Generally speaking, product managers and senior product managers require most of their focus on execution—things like discovery, delivery, and optimization. Group product managers and Directors are focused on operations—team ceremonies, reporting, planning, alignment, and objectives. VPs and Head of Product roles are focused on strategy—how does product ladder up and advance the company vision and business goals, what investments should the team make, how to allocate resources effectively, etc.
However, at earlier stage startups, a Head of Product is often required to flex across these buckets—the company is not yet at a stage where you can specialize in one dimension. Likewise, Product Managers in this scenario often must balance execution and operations. This is why many say startups are the best way to accelerate learning early in your career. You get broad exposure to a range of skills you need to develop.
The factors consistent across every role and company that you can’t get away without, at any level, are customer and user knowledge—how well do you understand your customers and users (these are often different groups in B2B), and business knowledge—how well do you understand the makeup of the company, revenue, costs, etc.
How much have performance reviews changed over time and why?
Leaders are starting to recognize the value of continuous feedback and coaching. It’s not a one-time thing that happens during an annual performance review.
Product is constantly evolving, as are the competencies you’re evaluating and developing. As an example, for most of the past decade, product managers were able to get away without delivering true business value under the guise of engagement or experience scores. But there was very little focus on creating and growing product lines that don’t bleed money.
In other words, run an effective business. The solution was to inject more capital into the business and hide mediocre products behind the narrative of future growth. I think the way product will look in the future will resemble more of a GM (general manager) type role where you’re responsible for revenue targets and the P&L of your business line. This demands a level of financial literacy that’s notably absent from many PMs today.
Product is not a one-size-fits-all discipline, and leaders are starting to understand this. You don’t want ten clones walking around trying to perfect the same skills. You want a team that spikes in different competencies based on individual interests and aptitudes. Just as you want people from different backgrounds and walks of life who can bring their own perspective to the space and examine things from a different angle, that’s how you build the best product.
How to prepare for your performance review and climb the ladder?
Quantify your achievements, similar to how you would approach your resume. What value did delivering X drive to the business? What costs did you cut out of the business?
As far as the ladder is concerned, you first need to determine if you’re interested in climbing the ladder in the first place. I’ve seen plenty of product managers blow up their careers by mindlessly following what they believe they’re supposed to want—chasing the next promotion or chasing a people leadership role, even though they don’t enjoy managing others and aren’t particularly good at it.
“The most important thing you can do in your career is avoid getting pulled into races that you’re not willing to run.”
Fortunately, there are now multiple paths at many companies for those who prefer an individual contributor path versus a management path. After that, you need to figure out who you need to influence, who’s responsible for promotions, and what the criteria is for performing at the next level, then go kick some ass.
What to do if you don’t fare well in your performance review?
Give yourself time to reflect, then devise a plan for improving. What adjustments do you need to make? What skills do you need to invest in? What mindset shift needs to happen? If your engagement in your current role isn’t there, you need to ask yourself two questions:
- Do I still care about solving this problem?
- Would I take this job if I were offered it today?
If the answer to the first question or both questions is no, then it’s time to move on. If the answer to the first question is yes, but the second is no, manoeuvring within your current company to a new role or new area is a potential path forward. To do your best work, you must be engaged in what you’re doing. There’s no way around it.