Many sales managers (and salespeople) dread the annual performance review. And the performance review can indeed be both unpleasant and useless. But when properly conducted, a review can also be a highly useful tool for building goals and planning your coaching time for the year to come.
The best performance reviews don't contain any surprises. For example, if a salesperson falters, his sales manager should let him know right away and help him overcome the difficulty. They should not wait until the annual review and then spring a complaint on him. Similarly, a salesperson who performs exceptionally should receive appropriate praise from her sales manager as each success occurs.
Performance Successes and Failures
The performance review is a great time to go over those successes and failures from the past year. Looking at those moments all at once can help to uncover patterns of behavior that are influencing those events. If a salesperson consistently performs best during months when he does more cold calling, It's a pretty clear indicator that bumping his cold calling the rest of the year will bring him even greater success. So throughout the year, sales managers should note each salesperson's performance and keep these records on hand for the final review.
Performance reviews look at both quantifiable and non-quantifiable items. Quantifiable items are things that can be counted and given a firm number. For example, the number of sales a salesperson closes is quantifiable. So are the number of appointments he makes, his wallet share for his existing customers, and his pipeline ratios. Non-quantifiable items can't be given a specific value but are nevertheless important. Such items include:
- the salesperson's attitude and behavior towards the rest of the sales team
- how well he treats their customers
- the appearance and impression they project
- how they handle criticism.
If you insist that your salespeople keep good records, quantifiable items are easy to track. Non-quantifiable items are a little trickier, but if you meet with your salespeople for coaching on a regular basis and keep an eye on them in between, you'll probably have a good idea of how they're behaving.
Many performance reviews ask the manager to rate employees on a scale of one to five or one to ten. For salespeople, many sales managers prefer to use four categories instead. The exceptional salespeople are the ones who consistently outperform the rest of the team, who regularly exceed their quotas and who, even in difficult times, still do relatively well. Such salespeople deserve lavish praise, but should also be encouraged to keep exceeding their past performances.
Good salespeople are the ones who meet or exceed their quotas every time, except for rare occasions. They are the backbone of most sales teams, solid performers without being superstars. These salespeople should receive praise as well, and sales managers should work with them to help them hone their skills so that they can reach the next level of performance.
Marginal salespeople can produce sales every month, but often struggle to meet their quotas. Some marginal salespeople can become good salespeople with plenty of coaching from sales management; others won't make the grade no matter how hard they try. It's up to the manager to decide how much work it's worth it to put in on these salespeople.
Poor salespeople struggle to make any sales at all. Many are masters at making excuses for their performance, but usually, their problems stem from the fact that they don't like selling, don't want to be salespeople, and do as little actual selling as they can. The best move is usually to get rid of such salespeople because neither they nor the manager will be happy as long as these folks are in a sales position.