Sales performance reviews are annual meetings between sales managers and each individual reporting sales rep to discuss performance, goals, and career paths. Typically, these meetings occur once per year and offer opportunities for employees to discuss merit raises, promotions, and movement towards their career goals. Here are some sales performance review best practices to improve your annual review process.
Sales Performance Review Best Practices
No matter the job, company, industry, or role, annual performance reviews are something every employee goes through. They offer an open communication line between employee and manager to address performance, provide positive feedback, and create plans to improve and/or increase performance.
Sales performance reviews can often seem daunting to employees and managers, alike. However, when the performance review process is managed effectively, these meetings provide great opportunities to strengthen both employee morale and performance.
Here are 3 key sales performance review best practices to ensure meetings run smoothly, goals are set strategically, and performance is maximized.
1. Frame Negative Feedback as an Opportunity to Improve
It's never easy for sales reps or managers to discuss poor performance, especially when it results in putting an employee on a performance improvement plan or worst case, letting an employee go (which is never the goal). For sales managers, providing positive feedback is essential to a successful sales performance review meeting.
Sales managers shouldn't sugar coat negative feedback, but it should be accompanied by a solution that gives the employee adequate means to improve performance or solve the issues at hand. Effective feedback, where negative or positive should be:
- Timely to address issues swiftly before they become larger problems
- Specific to the individual and focused on one issue at a time
- Objective and free from outside influence
- Constructive and framed with actions to remedy the problem
2. Set Strategic Goals and Create a Plan to Achieve Them
Sales performance reviews open the discussion to assess current goals and set new goals for the future. Each sales rep will have the same primary goal—their quota (learn more about effective quota planning here). However, reps may also have individual goals that they work towards alongside their quota.
Here are three easy ways to ensure goals are strategic:
- Align goals with company objectives: Every employee goal set should align the business' overarching objectives. It should be an action, project, etc. that the individual can perform and ultimately help the organization achieve it's overarching goals.
- Ensure reps have a direct impact on the goal: Regardless if it's quota, team objectives, or an individual goal, reps should be able to impact the success of their goals. Goals that employees don't have any control over will cause morale to plummet and performance to follow suit.
- Consider individual career aspirations: Individual employee goals should always take career advances into consideration. This can include anything from expanding skills and knowledge to collaborating with other teams to gain the experience they need to advance in their careers.
3. Do More Than Just the Annual Sales Performance Review
If you look at a calendar and do some rough math assuming no holidays (just humor me), 52 weeks multiplied by 5 days of work per week equals 260 days in the office. So, with the annual review, your ratio of working days to reviews is 260:1.
That's a lot of work and performance time to review in one annual meeting. A once-per-year review also isn't ideal for solving problems in a timely fashion.
So how frequently should managers review and check in with employees?
Research shows that companies that set quarterly sales performance goals see 31% higher returns than those on a once-per-year system.
Ideally, managers should make time to meet with their reporting reps in a weekly one-on-one meeting to check in on day-to-day tasks and operations. For larger goals and objectives, managers should conduct a mid-way check-in at the very least. In a perfect world, managers should check in monthly or weekly on goal progress.
Putting Positive Reviews in to Action
By putting these sales performance review best practices into action, employees are set up for success. This ensures that annual review meetings are beneficial for sales reps and open the door to opportunities to increase performance and advance in their careers.
Ultimately, communication is key. Managers should work to keep an open line of communication with their reporting team members outside of the annual review. They should also continuously check in to keep reps on track to meet goals and ensure each individual has the means they need to achieve their career goals. That way, morale stays high and performance is maximized.
Want to learn more about motivating your sales team effectively? Download the guide "Inspiring Sales Rep Performance."