How to Conduct Sales Performance Reviews

Many salespeople dread performance reviews because they worry about a poor review—which often signals a disconnect between sales managers and reps. However, conducting performance reviews should be more than issuing ratings and scores. It should be a dynamic conversation and opportunity to recognize achievements and strengths while identifying and addressing room for growth and improvement.

Here are the seven steps sales organizations should take to conduct sales performance reviews:

1. Create a Performance Review Template

A sales performance review should be a two-way street and conversation rather than a simple assessment checking off marks on a score sheet once a year. Ideally, there shouldn’t be any surprises during a performance review—expectations should be clear in goal planning and changes should be communicated regularly.

Sales performance reviews are also an important part of sales management because they should also ensure the sales rep gets the chance to rate their manager and include a self-assessment. Finally, the template should include criteria for measuring the performance of each salesperson.

Here are the main criteria that performance reviews should include:

• The salesperson’s name and title, the date, and the sales manager’s name
• The date of the salesperson’s last promotion, if applicable
• The pre-agreed upon goals and expectations for the salesperson during the review period
• A self-assessment, which should include the employee’s rating of their performance such as areas of strength, opportunities for improvement, and a section for comments
• A one to five scale rating on areas such as interpersonal skills like communication, feedback, teamwork, organization, and timeliness. You can also include metrics such as sales performance, revenue achieved, top sales wins, percentage below or above the agreed upon sales quota, pipeline development, follow up, overcoming objections, and competitive knowledge
• Additional comments, any changes in pay or title, and clear next steps

2. Determine the Frequency of Performance Reviews

Every sales organization is different and what works for a smaller organization might not work for a larger organization. The frequency of performance reviews also depends on the structure of organization and level of regular communication and feedback between the manager and the salesperson.

However, whether you conduct sales performance reviews monthly, quarterly, or annually, make it more than a formality. It should serve as an opportunity to foster growth, build trust and rapport, and a way to increase employee engagement and job satisfaction.

3. Review the Employee’s Previous Performance Reviews

Before you have any performance review conversation, compare the salesperson’s prior reviews to look for trends and changes. Are they growing and overperforming more than you expect? Or, are they stagnating or underperforming?

Taking a look at former reviews helps you prepare for the performance review conversation. It also gives you time to form talking points to discuss where the employee is doing well and where you’d like to see them improve their sales performance and grow.

4. Deliver the Performance Review

A performance review should never just be a form you show to an employee without a conversation. Schedule the performance review a least a week in advance so the employee also has time to prepare their self-assessment and explore things they’d like to talk about during the review.

Nothing in the review should be a surprise, so consider emailing your review in advance so the employee has a chance to prepare for the in-person conversation. When you do have your meeting, whether it’s virtual or in the same location, make sure you find a quiet, private location such as a conference room or closed door office. Don’t try to have a performance review discussion in the middle of an open office area–you’ll both be uncomfortable.

Pro-tip: While it’s best to be conducting performance reviews in-person, it’s not always feasible, especially in organizations with remote workers. If you have to have the conversation virtually, use a video conferencing tool such as Zoom so you can see one another’s body language and have a more engaging discussion.

5. Recognize & Reward Success

Once you’ve delivered the performance review and gone over their ratings or score and self-assessment, it’s time to incentivize employees by recognizing and rewarding their successes. Highlight their major wins during the performance period and offer robust praise where it is deserved.

Pro-tip: Recognition helps to reduce turnover in sales organizations and high performers need to feel rewarded. Remember, your top performers are in high demand in the sales industry.

There are many different types of recognitions and rewards you can provide for a good performance review. You can also get creative and allow employees to have a say in how they want to be recognized or rewarded by giving them several options. Common rewards and recognition include:

• A raise in salary or a bonus
• A promotion or new title
• A public recognition in front of the entire company, such as a companywide email or award plaque.
• Gift cards
• Lunch or dinner with the CEO
• Extra perks, such as additional days off, flexible working hours, or remote working options

Pro-tip: It’s an excellent idea to give employees a choice of pre-selected rewards they can choose from online. Consider using a program like Snappy to make it easy for people to select a gift that is automatically sent to them.

6. Address Opportunities for Improvement

Once you’ve recognized and rewarded what the salesperson has done well during the review period, it’s time to talk about how they can improve. Let’s face it, even the highest performers aren’t perfect and everyone should be willing to do things to improve their overall performance at work.

Common issues addressed in performance reviews are poor attendance, not meeting sales quotas, or training gaps that need to be filled. However, if you’re asking an employee to make improvements when reviewing performance, make sure you are both clear on expectations.

For example, if you want employees in the office by 8:30 a.m. and they consistently don’t show up until 9:30 a.m., but you’ve never been clear about office hours, make that expectation clear up front. Clear communication helps address a plethora of performance-related issues.

It’s also up to managers to ensure their employees have the tools, resources, and training needed to do their sales jobs well. For instance, if someone is underperforming because they get stuck on how to overcome objections when closing deals, offer specific training and coaching to help them improve and feel more empowered and competent to do better work.

“During a sales performance review, you should compare their results to the goals for the KPIs you put in place when they were hired. For salespeople, this is typically looking at deals, the amount won, and sales activity. If they have not achieved the predetermined goals then you should review with them steps they can take to improve. Where exactly in your sales process do they tend to have the largest drop-off? Do they perform worse at final closing calls or demo calls than the rest of your team? If yes, then you need to consider having a sales manager or co-worker coach them on that specific process and review their work. Other options are online learning, books, or seminars.”

—Fletcher Wimbush, Founder and CEO, The Hire Talent

7. Clearly Outline Next Steps

End the performance review conversation with clear next steps and expectations. For example, this could be an upcoming promotion, raise, or higher compensation plan. Just make sure you both agree when the raise will become effective or the promotion will be announced, along with any training and additional responsibilities that come with a promotion.

In cases when you’re reviewing a struggling or underperforming salesperson, you may need to create a performance improvement plan (PIP) to get them back on track. It should include how long the PIP will last and clear performance improvement expectations such as expected working hours, precise sales goals, or communication expectations.

Finally, even if someone isn’t getting a promotion, raise, or being put on a performance improvement plan, there should still be next steps. Develop a plan that includes a path for their professional growth and career advancement within the organization.

Sales Performance Review Software

While you can use an internal performance review template, many sales organizations choose to invest in tools to help automate the process. Many organizations use dedicated performance review software to make conducting performance reviews as efficient and effective as possible.

Examples of performance review software include:

1. TrakStar

Trakstar performance review platform

Trakstar helps managers set performance expectations, create custom performance reviews, and improve employee engagement. It allows sales managers to learn what motivates their sales reps with company “pulse check-ins” and improves communication between team members, including surveys. They offer a free trial, but you have to talk with their sales team for a personalized quote.

2. Primalogik

Primalogik 360 degree feedback table

Primalogik helps managers obtain meaningful sales performance insights with custom reviews that help employees aim high by tracking certain goals, provide recognition for major achievements, and provide regular feedback in their platform. They also offer employee surveys to help improve employee satisfaction and happiness. They offer a free trial and pricing starts at $379 per month for up to 100 users.

3. ClearCompany

ClearCompany performance review platform

ClearCompany offers a program that brings the employee performance review process into one automated platform. Their simple user interface gives managers the tools to set up reviews, create custom scoring tables, weighted sections, and free-form responses. You have to contact the sales team to get a custom price quote.

4. Gtmhub

Gtmhub goal tracker

Gtmhub allows sales managers to discover sales behaviors and insights in real time to help them create the most effective and accurate performance reviews. It helps employees and managers set and track goals for each quarter in one place, making it easy to examine progress when it’s performance review time. They offer a seven-day free trial and pricing starts at $1 per user, month—with a free option for nonprofit organizations.

Frequently Asked Questions (FAQ’s)

How do I write a sales performance review?

When creating sales performance reviews, consider both interpersonal and sales behavior performance. Include a self-assessment and an assessment by the manager that rates performance such as reaching sales goals, communication, following processes, and completing tasks on time.

What is the most effective way to conduct sales performance reviews?

It’s best to conduct performance reviews in person or over a video conference. It should be a dynamic, two-way conversation that recognizes and rewards high performance while addressing opportunities for improvement.

How do sales employees benefit from regular performance reviews?

With regular performance reviews, employees know what they are doing right and are given guidance on how they can improve their performance. It also offers opportunities for them to learn how to advance their career within the company.

Why are employee self-assessments valuable in the review process?

Self-assessments are an important part of the sales performance review process because they give the employee a chance to reflect on their own performance. Then they can compare it with their manager’s assessment to see where they agree and where they differ. This allows them to have constructive conversations about how to maximize sales performance.

The Bottom Line – Conducting Sales Performance Reviews

Regular sales performance reviews are a key part of optimizing performance for any sales organization. Performance reviews for salespeople should be conducted at regular intervals, be done in person, reflect interpersonal and sales behaviors, recognize high performance, and address opportunities for improvement.