Sales performance review

Each year there comes that time that all sales people and sales managers face with trepidation and anxiety: sales performance reviews.  Sales performance reviews are much needed (and usually compulsory) part of any good sales management plan, and they do not need to be problematic.  In fact, when done properly sales performance reviews should be used to identify successes and accomplishments as well as any problem areas.  In either case, the information provided in sales performance reviews can be used to pinpoint ways to improve sales and correct problems.

Except in unusual cases, sales performance reviews should be done annually. The purpose of performance reviews is to:

• Reward those who are performing up to or exceeding expectations.
• Identify sales people who may need additional training or assistance.
• Identify sales people who are not meeting expectations and are at a point where they may need to be terminated.

Additionally, the performance evaluation should be used to help set goals and improve communication between the sales manager and the sales staff.

The approach to doing sales performance reviews should be three fold.

1. 1. Employee self-evaluation.  This evaluation gives the sales person the opportunity to do some soul searching. It allows the person to determine if they have met personal goals that they have set for themselves. Each year the sales person should be establishing their own goals and objectives.  Prior to the sales review, the sales person should be furnished with all of the relevant data regarding their performance for the year.  In addition to doing the self-evaluation, the sales person should set goals and objectives for the year ahead.
   2. Outcome based evaluations. This evaluation should be done by the sales manager and should focus specifically on data.  This evaluation is unambiguous and based solely on facts and figures.  This part of sales performance reviews is to see where the sales person met, exceeded or failed to meet agreed upon goals for the year.  The outcomes based evaluations must be measurable and should be founded on detailed numbers and percentages.  This area is not at all subjective or personal.  The outcomes evaluation could show a percentage increase in sales, market share, or quotas obtained by the sales person. It is a quantitative criterion for performance. This is a bottom line, objective evaluation.
   3. Behavior based evaluations.  Behavior based sales performance reviews are qualitative and are somewhat subjective.  These evaluations assess the characteristics of the sales person that have an effect on how well they perform.  Although more difficult to implement, these evaluations are also measurable.  It is very important to never let personal bias influence this type of evaluation. To a certain extent, the behavior-based evaluation is often the basis of the outcome-based evaluation. The behavior analysis of sales performance reviews can include varied criteria.
   4. Sales Skills.  This can include product knowledge, closing skills, and the ability to overcome objections.
   5. Management Skills.  This can include record keeping, planning, and customer service including cold calling and customer follow-up.
   6. Individual Skills. This is the toughest part of sales performance reviews.  It can include discussion of the sales person’s attitude, willingness to work as a team, personal motivation or even personal appearance.

Sales performance reviews need to be relevant to the job. They must be reliable, specific, measurable and standard for each sales person.  Although it can be a daunting task to review your sales staff, the information that is gained and shared can be useful to both you and your sales team. Sales performance reviews provide an opportunity for mutual goal setting.  Evaluations can help to identify problem areas and their causes. They can point out the link between outcomes and behaviors.  Sales performance reviews give the sales manager the opportunity to appraise both positive and negative issues. This information should lead to the development of strategic plan for performance improvement for your sales people with the ultimate goal of increasing sales.