How to Evaluate a Product Manager’s Performance

Product managers are critical players in any product-based company. They are key to the success of a product and always work towards a clear understanding of the market and the customers they serve.

Product managers have a huge impact on the success of a product. Their role is strategic in nature. Yet, they are often disconnected from the processes that measure their performance. To hire the best product managers, successful companies use various metrics and methods of evaluation to select and keep the best candidates.

In this article, we'll discuss ways and measures to evaluate a product manager's performance. We'll also look into the types of measures and discuss pitfalls to avoid when making a judgment.

The Importance of Evaluating a Product Manager's Performance

Evaluating a product manager's performance is crucial for any team. Right product managers effectively drive the success of a product or even a feature.

Running timely evaluations is a good way to find the strengths and weaknesses of your product managers. Most product companies today use these evaluations to

• align their product goals  
• improve their product teams' performance
• speed up the delivery time

These evaluations also help in measuring the overall effectiveness of a product’s lifecycle. Not only do these evaluations help in selecting the right man for the job, but facilitate all the team members to play their part right. Based on these evaluations, companies set the correct expectations and allocate resources accordingly – which helps in bringing more accountability to the table.

Types of Measures to Evaluate a Product Manager

There are two main types of measures used to evaluate a product manager: qualitative and quantitative.

Let's discuss each of these in detail.

Qualitative Measures to Evaluate a Product Manager

In general, qualitative measures evaluate the personal, behavioral, and cognitive aspects of product managers. These include qualities such as problem-solving skills, communication power, the ability to delegate tasks, relationship management, and more.

It’s important to understand that a lot of these parameters to measure a product manager’s effectiveness are interlinked and work together. Let’s outline a few examples of key qualitative measures:

Leadership: A product manager should inspire and guide a team toward a common goal. As a leader, product managers have to constantly zoom out, look at things from a bird’s eye view and guide the team toward a common goal. When evaluating the leadership abilities of a product manager, try finding instances when they removed blockers or resolved issues.

Insight & Analytical Thinking: The ability to gather data, analyze it, and use it to inform decisions. Analytical thinking comes with practice, exposure, and experience. It’s a cognitive skill critical to product managers dealing with internal teams and stakeholders managing deliverables & expectations. This can only happen if product managers can isolate, identify and fix problems.

Thoughtfulness: To be able to think critically and creatively about problems and potential solutions. To consider product managers as problem solvers won’t be wrong. They do it by being considerate to both the customers and the people they work with.

Attention to Detail: Having the mindset to focus on the details that matter and ensure that they are not overlooked. Perhaps, the most important aspect of a product manager is to be able to look at things clearly. Nothing can be overlooked or allowed to fall in between the cracks. A good product manager always keeps a track of each detail of the requirements.

Communication: For a product manager, everything boils down to good communication skills. It’s the core function of every product manager’s job. A product manager should always communicate effectively with stakeholders and articulate ideas and plans clearly.

Customer Centricity: To understand and prioritize the needs of customers. Every product manager advocates for the customers in an organization. It’s their main responsibility to make sure that the team delivers exactly what the customers requested.

Clarity: To be concise and straightforward in communications. Making complex things easy to understand. A product manager’s job is to keep customers in the loop and translate complex problems into easy-to-understand language.

Punctuality: The ability to meet deadlines and deliver results on time. This skill comes with time and experience. Good product managers are aware of the capabilities of their teams. They always follow this simple rule when giving a deadline. Underpromise and over-deliver.

The Value for the Organization: The ability to create value for the organization by being at the top of everything related to the product. Sometimes referred to as a product CEO, their job isn’t limited to communication between the stakeholders. They are the leaders of the product in their own way and may find doing things not part of their original job description.

The Value for the Customers: The ability to create value for customers by building products according to their needs.

All of these quantitative measures never work in isolation and aren’t easy to quantify in numbers.

Quantitative Measures to Evaluate a Product Manager

Quantitative measures are results-based metrics for judging the performance of a product manager. Metrics like customer satisfaction scores, market adoption rates, customer churn rates, product launch times, etc are among the many that fall into this category.

These measures are objective and based on data. But you should interpret these measures with caution as they alone never always tell the entire story.

Some examples of quantitative measures to evaluate a product manager include:

Competitive Intelligence and Analysis Updates:

Keeping an eye on competitors and regularly updating information on the competition analyzing their strategies.

Regular Updating, Presentation, and Communication of The Product Roadmap:

Keeping stakeholders informed on product development and communicating a clear vision for the product.

Data-driven decisions:

The ability to make data-driven decisions and to use data to inform product strategy.

Conducting Surveys to Validate Assumptions:

Gathering customer feedback through surveys to validate product assumptions and make informed decisions.

Both, the quantitative & qualitative measures provide a holistic view of the product manager’s performance. One should not be used in the absence of the other whenever judging your product managers’ performance.

What are Product Management KPIs?

Product Management KPIs, or Product Management Key Performance Indicators, are metrics designed to measure the performance of the product management teams, product managers, and the overall business. These include things like time-to-market, cost, customer satisfaction, market adoption, and more.

When To Use which KPIs?

Every product is unique, with its own set of processes, level of automation, and business situation. That’s why not every KPI has to be tracked for all businesses. Good product managers always select only a few KPIs to monitor. This makes decision-making easier, both on a tactical and strategic level.

There are different categories of KPIs developed to measure various aspects of a product. Let’s discuss the most common ones.

Business Performance

For any product team, business success always comes on top. KPIs for business performance measure how well the product is selling and whether it's in profit or not. Revenue, profit margins, and customer acquisition costs are just a few examples of KPIs that measure business performance.

Product Usage

Product usage KPIs measure how well a product is used by customers and give insights into customer engagement and satisfaction.

A few examples of product usage KPIs are monthly active users, churn rate, and customer satisfaction scores.

Product Quality

Metrics about product quality measure the quality of the product itself, and how well it's meeting the needs and expectations of customers. These metrics find areas where the product needs improvement. Some examples of product quality KPIs include customer satisfaction score, number of bugs, and customer complaints.

Product Development

Finally, KPIs for product development measure the success of the product-building process. These metrics help a product manager ensure that the development team meets deadlines, stays within the budget, and delivers a high-quality product.

Some examples of product development KPIs include time to market, development cost per feature, and percentage of features delivered on time.

Numbers Aren't Everything: Avoid Relying Only On Metrics

While KPIs are an important tool for evaluating a product manager's performance, it's important not to rely on them too heavily. Just like qualitative and quantitative metrics, KPIs are also just one measure of a product manager's performance. A piece in the puzzle that never always tell the whole story.

Let's take an example of a product manager who has achieved all the KPIs and may still be struggling with some qualitative aspects like communication or leadership.

While quantitative measures such as customer satisfaction scores and market adoption rates can help assess performance, relying only on them isn't smart. They must be measured along with qualitative measures.

Final Thoughts

Evaluating and assessing a product manager’s performance is critical. It ensures the success and longevity of a product. Successful companies leverage both qualitative and quantitative metrics to evaluate their product managers. They realize what matters to stakeholders when evaluating a product manager and guarantee that their product managers are meeting expectations and performing at their best.

‍