The traditional annual review process is a waste of time. Most HR and Sales leaders who just completed this mid-year chore would agree. It did nothing to get closer to Make the Number.
It does not answer the question that is top of mind with Sales and HR leaders, “How can we improve the performance of our sales team?” The accelerated pace of today’s selling environment requires a new kind of performance management. The annual review is dead because a year is too long to wait. If your annual reviews feel like a look in the rearview mirror, read on.
A more Agile way of assessing sales talent has emerged. This post focuses on how to make a leap forward with the Agile Performance Review. It includes a tool to customize for your own agile reviews. Performance management is covered in depth in SBI’s annual research tour. Sign up for the onsite session for your leadership team. The Agile Performance Review is just one of a range of tools you’ll receive.
Converting to Agile Performance Reviews will help you Make the Number in 2014.
Who Killed the Annual Review?
The legacy annual review was designed to accomplish 3 important tasks:
- Give performance feedback
- Plan for career advancement
- Announce the annual merit increase
Unfortunately, none of these apply to a modern sales organization. Meanwhile, Agile is spreading everywhere in Sales – to onboarding, sales management, and sales training.
The velocity of change and new technology renders the annual review obsolete. Feedback must be timely and frequent to effectively modify behavior.
Spotlight on Performance
The primary reason for the annual review is to give performance feedback. Every employee deserves to know where he or she stands. In a recent study, 57% of employees either “never had a performance review or rated their most recent performance review as neutral to not useful.”
World class sales organizations already track performance at least on a monthly basis. The monthly commission check, stack ranking, and pipeline reviews provide ample feedback. CRM tools now include dashboards that give instantaneous views. Top performers can self-assess their performance at any time, from any location. No need to wait a year!
Counsel on Career Counseling
The second reason for the annual review is for talent development. It’s important to review career goals and set plans in motion. Once per year may be useful for planning, but not for effective career guidance. Individual Development Plans require regular updating and coaching. It’s not enough to assign developmental actions once per year and follow up a year later. An agile approach updates career development every sixty days.
Pay Me Now or Pay Me Later
The merit increase is nearly meaningless as a behavior modifier. For sales people, it is dwarfed by the impact of changes that dramatically impact income. The biggest drivers include:
- Changes to compensation payouts
- Changes to Territory coverage
- New products added to the portfolio
- Sales contests and bonuses
A slight change to the comp rate will have far more impact on income than a merit increase. The addition or subtraction of a key account from the territory will do likewise. The opportunity to sell a hot product can quickly retire a full year quota. Top performers certainly deserve merit increases. Just deliver the news in an agile manner.
Using Time More Wisely
The primary purpose of talent management in Sales is to develop “A” players. Agile performance reviews focus on making constant progress. They take 15 minutes each month. The topics rotate according to a schedule similar to the one shown below:
The Agile Performance Review focuses on developing the new “A” Player. This requires a new set of skills that need regular, repeated nurture. These include:
- Social selling competency
- Persona and Buyer Process Map skills
- SoLoMo technology proficiency
- Content creation & demand generation
These topics may not seem like what you would expect in a performance review. But they are exactly the professional development your sales team needs. Focus their development on what they really need to be successful: “A” player skills. Training classes and workshops won’t get it done. Setting goals and measuring progress at frequent intervals are the keys.
Of course, the Agile review also includes key traditional elements. Career planning and employee engagement are vital parts of performance management. These important elements are blended into the Agile review regularly.
Take the Next Step to Agile
Find out more about the Agile Performance Review. The template shown above is available by registering for SBI’s 7th Annual Research Tour. Sign up for the onsite session for your leadership team: How to Make Your Number in 2014: A Sales Strategy You Can Execute. By participating, you’ll learn about the skills of the new “A” player. You’ll also get a free copy of the Agile Performance Review to customize for your team. It will dramatically improve your performance management outcomes.
