Performance assessment: a complete guide
Go through the performance management process like a pro leader, and get the benefit of kick-ass PMs.
In another article, I wrote about developing high-performing PMs through basic non-BS practices. On this one, I will double down on the formal performance assessment process.
How often should you do a formal performance assessment?
The company decides on the frequency of the formal process. Usually, it's once per year or semester. If it is annual, I like to run an informal version of the formal process in the middle of the period.
Important: that's not how often you should give feedback to your reports. You should give them constant feedback, either praising or correcting the course. If a report goes without your feedback for over a month, you are doing it wrong. More here:
Performance assessment must be in writing. Period.
Writing forces clarity. You can't hide behind vague statements or diplomatic language when you write something down. Or, If you do, it will be plain obvious. You must be precise about what's working and what isn't.
Writing creates a shared understanding. Both you and your direct report can refer to the document, eliminating the "but I thought you meant..." conversations.
Writing serves as documentation. This helps track progress over time and, let's be honest, covers your back if things go south.
But how do you write a good performance assessment? The best I have seen is composed of these things:
Self-assessment.
360-degree feedback.
Manager's feedback.
Manager's clear expectations for the next X period.
1. Self-assessment
Before any input from me, I want the direct report to reflect on their performance. This will either inform me of (often positive) things I was unaware of or prepare me to pay extra attention when there are significant perception gaps.
How I do this is usually asking the report to evaluate themselves on the PM competence model the company uses, always asking for them to justify their answers with concrete examples. If you don't have a competence model yet, just the normal “what you did good at” and “what you could improve at” should be ok.
2. 360-degree feedback
It's often hard to judge a PM's performance beyond what the team achieved because we, the managers, are often not in the room when they are working with stakeholders and their teams. That's why it's vital to ask for feedback from those who are most often working with them, the popular 360-degree feedback.
Gather feedback from people working closely with your direct report. This includes peers, stakeholders, and team members. It's helpful to ask your direct report for suggestions. But be critical of their proposal, as some people will only give names that would say nice things.
Once chosen, I give those people just two prompts:
[Name of the person] did great at:
[Name of the person] should improve at:
I always add to that briefing:
Try to make it specific enough so the feedback is easier to understand.
BAD EXAMPLE:[name of the person] is a great communicator (this is bad because it's hard to know what it means).GOOD EXAMPLE: [name of the person] communication skills really helped the team when we were discussing the tradeoffs of X and Y, because she listened to both sides of the argument and made the right questions about which assumptions each side had. (A concrete situation and what she did makes it easier to understand).
I usually don't do this anonymously. I offer the person the option to anonymize the feedback if they want, but I know who gave which feedback. This is useful because I can ping people who haven't replied yet. Also, I can ask follow-up questions if the feedback is unclear.
In the past, I did some categorization of the feedback, too. This takes a long time, though. But now, with LLMs, it's pretty simple: you feed your PM competence model to Claude (or whichever LLM you use), and then you feed the feedback. You then prompt it with something like this:
I want to categorize the feedback my direct report got against the competences we have in the company.
In the attached Word document, there are 68 feedback quotes to my direct report. In the attached CSV, there is a list of product manager's competencies with the name of the competence and a short description.
I want you to:
1. Put the 68 quotes on a table format under a column named "feedback", each complete quote is a different cell.
2. Add a new column called "positive or constructive". Categorize the feedback as positive or constructive. They are already separated by this in the document, so it should be easy.
3. Add a new column to the table called "best competence fit", where you will list only one competence that the quote is most related to. Use the descriptions in the CSV to be sure of the best fit.
Take particular care to:
1. Don't forget any quote. All 68 need to be there. No more, no less.
2. Quotes with sub items (such as examples) need to be all under the same quote cell.
Add the feedback to the performance review document.
To make it easier to consume, you can also add a chart with the count of feedback in each competence, split by positive vs negative:
3. Manager's feedback
Here is what you decide to emphasize as a leader. You may use the 360-degree feedback to color it, but have examples of your own prepared (or you are likely being lazy, leaving the development of your report to other people's opinions). You should be clear about what you value on the PM (what they should keep doing) and what they should improve.
Especially on the constructive part, I like to list only what is crucial to taking the PM to the next level, not everything. People tend to focus on improving something, but often, they focus on the nice-to-haves instead of the must-haves. I don't give them this option; I only list the must-focus items.
4. Manager's clear expectations
This is where most performance management processes fall apart. Managers expect people to magically know the answer to how to improve. Lots of times, they can do that, but also often not: if they knew, they would be doing it.
Don't stop at identifying problems. Create clear, actionable paths to improvement. For any point mentioned in the item above, I like to have clear expectations about the improvement I want. E.g.:
What I want to see in the next 4 weeks on the topic “clear team direction”:
A clear, measurable, and outcome-oriented next quarter's goal. Not five. Just one or two.
One or two opportunities/problems your team will address to achieve the next quarter's goal.
A roadmap of solution hypotheses for the next quarter. Each should be linked to one opportunity (from above).
All of the above in a single, short (less than 3 pages), and well-written document. Don’t ChatGPT it; or it will be long and terrible.
Here's what a good improvement plan looks like:
Time-bound expectations. Don't just say "improve communication." Say "In the next 4 weeks, I expect to see..."
Concrete changes. List specific behaviors that need to change. For instance: "Every meeting should have a clear agenda shared 24 hours in advance and documented decisions/action items shared within 24 hours after."
Clear metrics. How will you know if the improvement happened? For example: "By the end of Q1, you should have shipped at least three customer-facing improvements, no matter how small."
Regular check-ins. Set specific times to review progress. I recommend weekly for critical improvements.
The golden rule: no surprises
Here's the most important principle: If anything in your performance assessment surprises your direct report, you have failed as a leader.
Your job is to give feedback early and often. The performance assessment should summarize conversations you've already had, not a bombshell of new information.
Closing thoughts
Performance management isn't complicated, but it is hard work. It requires discipline to give regular feedback, courage to have difficult conversations early, and clarity to set concrete expectations.
But here's the thing: your job as a leader is to develop your people. Get this right, and you'll build a team that can handle whatever challenges come their way.
What are your experiences with performance management? What works for you? Let me know in the comments.
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