Many sales managers dread performance reviews since the process has such a bad reputation. Although evaluations may seem to be more job than joy, the task is a vital part of managing a salesteam. In fact, Dick Grote, author of The Performance Appraisal Question and Answer Book, suggests performance appraisals “can be the most important tool in the sales manager’s arsenal to develop a high-performing, totally committed sales team”. Perhaps because the process is so daunting, Grote explains that too often the sales manager “squanders the chance to build sales excellence because of a lack of courage to tell people the truth about how they are doing”. Get in the habit of praising performers and weeding out dead weight by using the following guidelines to firm up your review process:
1. Elements of a review. Each appraisal should include quantitative measures like total sales, sales versus quota, client presentations per day and week, sales per week and month, and close rate. As quotas are a large element of a review, it’s important to understand how your reps view the system. If the quota was handed down from the top, the salesperson doesn’t identify with it, feels it’s unfair and has a hard time meeting the quota. A quota system is powerful only if the salesperson worked with his or her manager to develop it.
2. Beyond quotas. After the quantitative measures are covered, Grote encourages managers to focus on the more qualitative aspects of selling, including “impact and influence” and “achievement orientation”. Grote describes impact and influence as behaviours that include building networks, seeking advice and using a group process to lead or influence the group. Achievement orientation manifests itself as taking initiative, doing more than asked and looking for problems to fix.
3. Frequency. Reviews should be done on a regularly scheduled basis. A new recruit should be reviewed more frequently at first, and then at least every three months. Normal reviews should be conducted quarterly, and managers should allow enough time to prepare and conduct each review. Most of them don’t do either of these functions very well. They fail to realise that it’s not time lost, it’s actually time well invested.
4. Good news, bad news. Your sales force may dread reviews as much as you do. But when it is done with enthusiasm and optimism, it’s a powerful motivating tool. Compliments should be lavish and criticism should be fair, calm, supportive and constructive.
One of the reasons reviews lurk at the nadir of your to-do list is that there may be bad news to deliver. If a rep isn’t selling, Grote suggests an entrepreneur do the thorny work of firing.“Don’t undertake the burden of improvement – think replacement,” says Grote.“Managers tend to wait way too long to fire obvious losers.”
Remember that the only thing worse than toomuch turnover is none when there should be.
