Performance management should form a central function in any organization.
However, when it comes to the more complicated process of driving performance within sales teams, there is a call to take the management process to another level. Defined as ‘a process which contributes to the effective management of individuals and teams in order to achieve high levels of organizational performance’, performance management brings together all those elements that contribute to success in a holistic fashion, concluding in what matters most to management: results.
As a multi-layered and frequently complex process, it is often misunderstood. Or, worse still, ignored and sidelined for ‘later consideration’. However, the impact of performance management should never be underestimated. It is both strategic and integrated, considering broad issues and long-term goals at both individual and business level. It will link to various aspects of the business and take into account the goals of different teams and individuals to ensure all work in partnership with one another. At a most basic level, it could mean the difference between success and failure. Can you really afford not to?
Fundamentally, performance improvement should incorporate:
- Performance improvement, implementing systems and process that will improve efficiency and effectiveness.
- Development, for example through structured and on-the-job learning, accreditation or internal assessment.
- Management of behavior, including the clear establishment of expectations and measurable, attainable standards to encourage better working relationships.
Performance Management is a process, not an event. It should be structured into management processes to ensure it is integrated into daily, monthly and annual functions within the business. When it comes to the fast-paced world of sales, this need for continuous re-evaluation becomes all the more essential. Even if the targets we set for our star players were stretching 6 months ago, if performance management and development has been successful, these targets should no longer be a challenge. In order to continue to drive performance, they need re-considering.
What does it mean to the individual?
Your typical sales employee is highly results-focused and keeps a constant eye on the end goal: closing business. When it comes to performance management of the sales function, it is essential to tailor the process to this key characteristic. Put simply, each individual should:
- Know and understand what is expected of them
- Have the skills and ability to deliver on those expectations
- Be given continual support from the organization to develop the capacity to meet those expectations, if required
- Receive regular feedback on their performance
- Be offered the chance to discuss and contribute to aims and objectives, at individual, team and company level
What is expected?
So, stage one. Knowing what is expected of them. In the world of sales, this is typically assumed to be the achievement of a pre-defined sales target, a quota or goal aligned to closed business. However, if we are to embrace a holistic view, expectations should also be set upon areas lower on the sales cascade. Each area should be broken down into measurable and attainable ‘chunks’, in line with the old dictum: ‘if you can’t measure it, you can’t manage it’. While focus should always be upon the top of the sales triangle, optimization of performance should look at each and every function:
- Closed business
- Pipeline make-up (Are they big or small deals, the right deals?)
- Pipeline activity (demos, proposals, the next steps)
- Leads (how many, quality, which convert into pipeline)
- Activities (cold calling, meetings, lead generation processes, lead follow-up)
When it comes to setting goals and targets, it helps to work with the competitive nature of sales. Having target boards or daily reports of figures, visual representations of progress, breaking up goals according to team and setting challenges or ‘games’ that will set incentivize and drive success are proven methods that work well in sales functions. It also provides accountability across the business, and clarity: if an individual is failing to meet targets or achieve what is expected of them, it can be quickly identified and addressed. Hidden, personal measurements of progress embedded on a spreadsheet and only visited intermittently can prove dangerous: by the time a problem is identified, it may already be too late to address it.
Skills, ability and development
Equipping individuals and teams with the tools they need to succeed should never be considered as a one-off event upon commencing employment. Even if individuals don’t necessarily progress or achieve promotion, their roles and responsibilities – and the skills required to fulfil them – will evolve and change with the business and its relevant market. In addition, the provision of learning and development embeds a culture of organic growth and promote-from-within approach to sourcing future business leaders and management, which also aids enhanced performance at all levels. Employees who feel they have been invested in will also generally demonstrate higher retention levels and improved motivation and results. In short, it’s an investment worth making. In the world of sales this can take on any number of forms: from structured internal or external training to on-the-job learning, coaching and mentoring, and from accreditation programs to periodic assessment and evaluation.
How do we implement a Performance Management process?
There are a variety of tools traditionally adopted to implement the process of performance management, and each will suit a different type of business and manager. A combination of tools is proven to be most effective, as when used in conjunction with one another, they provide a sufficiently holistic approach that addresses all areas associated with managing performance. These include:
- Performance appraisals: these may be implemented monthly, quarterly or annually, involving an individual’s manager assessing current performance, future potential and ongoing development.
- 360 degree feedback: increasingly popular, 360 degree feedback uses performance data from a variety of sources in additional to the line manager alone, in order to determine more accurately current performance levels.
- Learning and development: Drawing up personal development plans and engaging actively in training or development processes, or simply setting out appropriate actions to be taken in order to increase potential.
- Objectives, targets, goals and performance standards: Perhaps the most important in the world of sales, setting clearly defined objectives which are agreed with the individuals and designed to be stretching, but achievable. Employees should always know exactly what is expected of them.
- Measurement: We all need to know the basis upon which our performance is measured. This gives a tangible and obtainable goal to strive towards, and should always be transparent and applied fairly across all areas of business.
- Pay: Performance-related pay has many supporters and is proven to increase motivation levels