6 Tips for Conducting Sales Performance Reviews

The very idea of a performance review can strike fear into the hearts of sales representatives. Many managers also don’t love performance reviews. After all, preparation is labor-intensive, and giving negative feedback isn’t exactly an enjoyable task. 

Nevertheless, they are critical for helping team members to improve. If you’re not prioritizing performance reviews, you’re doing your team a disservice.

Here’s how to approach the review process systematically while minimizing stress.

What to cover in a performance review

Performance reviews work best when managers stick to a clearly defined framework. We recommend covering the following subjects in a performance review:

  • Successes and failures – Since the last performance review, what major successes have the sales representative participated in? What were some deals that failed to go through?
  • Metrics – Review the sales representatives’ metrics in detail, including sales activities and revenue generated. Contextualize these metrics by comparing sales representatives’ performance against the company average. Examining trends over time can also be illuminating.
  • Quota attainment – In previous quarters, how well has the sales representative met quota? If they failed to meet the quota, what are some potential causes for the failure?
  • Client relationship-building skills – Consider how well sales representatives have built relationships with new and existing clients. Reviewing client feedback can be helpful to assess this skillset.
  • Performance within the team – Great sales representatives work well in teams, even if they are primarily individual contributors. Evaluate how well each representative has participated in team activities. How do they contribute on both a daily basis and in terms of special projects and initiatives?

Although many companies are moving away from using rating scales in performance reviews, evidence suggests that ratings can actually be helpful for employees. One survey of all Facebook employees revealed that 87% want to keep performance ratings. When conducted fairly, ratings help employees to understand their performance—and where they need to improve—in concrete terms.

How to prepare for the review

To prepare for performance reviews, create a schedule. Make sure that there’s enough time for an in-depth conversation with every team member. Create or update the template for reviews that you will be using, including any rating scales if applicable.

Then, determine who will be involved in the review process. Although managers should assume primary responsibility for conducting the review and delivering results, depending on the structure of your organization, it might make sense to involve other team members.
Finally, collect all relevant data that can be used in the review. KPI reports, notes from previous meetings with sales representatives, and peer evaluations are all indispensable for gaining a three-dimensional perspective on representatives’ performance.

How to communicate with your team

It’s no secret that performance reviews usually mean anxiety for sales reps. While managers can’t cure those jitters altogether, strong communication throughout the entire process can do much to alleviate them.

Be transparent with your team throughout the entire process. Let them know when performance evaluations will be conducted, and review the format with them. You can even let them know the basics of your process. If you’re using evaluation rubrics, share the rubrics ahead of time. When representatives understand the process ahead of time, they are more likely to accept the results as fair.

One question that many representatives have is how performance review results will impact their own compensation and promotion opportunities. Again, transparency is key. Even if this information is outlined in your compensation plan and sales playbook—and it should be—remind team members of the basics before they enter the room.

How to conduct the performance review

Once you’ve gathered the relevant information, you can evaluate candidates according to the framework you’ve created. If you feel like you need more information for a given competency, ask other team members to provide performance feedback.

Now, you’re ready to make your ratings and compile the information into an easy-to-read report. Reports should strive for an objective tone and offer a wealth of actionable information.

Each rating should include an explanation. Try to include concrete examples wherever possible. Quotations from co-workers and clients can also be powerful supporting evidence. For KPIs, provide a table of each representative’s metrics as compared to company averages.

How to discuss the review with your team members

When the time comes to discuss performance reviews, be organized and professional. Here are some ways to put your representative at ease while still conveying the information you need:

  • Begin by discussing something positive so that the representative is more relaxed.
  • Walk the representative through every aspect of the review. Explain clearly how you reached your conclusions.
  • When discussing critical feedback, frame your criticism in a way that’s productive. Don’t sugar-coat, but offer concrete suggestions for how the representative might improve their skills in the future. It’s oftentimes helpful to state the impact that certain behaviors have on other people, such as by saying “Your approach to this client made them feel like they weren’t being fully listened to” rather than “you didn’t listen enough.”
  • Give the representative opportunities to respond and ask questions. It’s possible that they might interpret events differently. Hear them out without rushing to judgment.
  • Conclude by setting up a tentative plan of action. What specific actions will you and the representative take towards growth?

How to follow up on performance reviews

Performance reviews shouldn’t be a one-and-done kind of event. At the conclusion of your meeting, provide the employee with a copy of the review for their reference. Sometimes, it can be helpful to create a more detailed plan of action using the insights from the review. In your future meetings with the representatives, reference the review—especially the plan of action.

Sometimes representatives might not be able to voice all of their concerns at the actual meeting. Remain open to further discussion of the evaluation, conducted in the same productive spirit as your initial meeting.

Reviews aren’t likely to be fun for either managers or sales representatives. But when done well, they’re an invaluable tool for professional development.

James Meincke

James is the Head of Marketing @ Demodesk, the intelligent meeting platform for remote sales. Previously he was the Director of Marketing at CloserIQ.