Editor's Note: This post has been updated for accuracy and comprehensiveness on December 10, 2020. Photo by Hattie Kingsley Photography.
Okay, you've done it all. Over the past year, you have:
- Developed SMART Annual Performance Goals that are aligned to the objectives of the business
- Conducted regular One-to-Ones where your team members have tracked progress against their goals
- Visited customers with your sales people, observing and finding areas to improve through coaching
- Role-played various customer scenarios with team members, focusing on improving their weak areas
What's left to do? EVALUATION!
Sadly, Annual Performance Reviews are another one of those "least favorite" activities for sales leaders. Most of us are frantically closing out the fiscal year to maximize year-end financials. Additionally, if your fiscal year matches the calendar year, you're working around the holidays - which obviously lowers motivation. Executive and business focus is also shifting (or has shifted) to sales strategy for the upcoming year. The risk is that the you put minimum effort into evaluating your employees so you can move on to other things.
Don't fall into that trap!
If you have coached throughout the year using the techniques listed at the top, Annual Performance Reviews are EASY. You already have all of the documentation you need (performance against goals, your notes from one-on-ones, observations from customer visits, role plays, and all those other coaching opportunities). The performance review is simply a recap of the year and IS NOT A SURPRISE for you or your employee. If you have followed your coaching strategy, even an "under-performer" evaluation is less foreboding if there are no surprises.
The challenge comes when you HAVEN'T followed a coaching methodology during the year. In this case, you're starting from scratch and relying on your long term (12 month) memory. While you will know each employee's performance against target, will you know all the intangibles that separate exceptional from average performance? For example, will you be able to rank the person who came in 95% of target as "Exceeded Expectations" because an average sales person in that region would have only achieved 50% of target?
In either case, here are a few techniques that I have found effective in preparing for and conducting Annual Performance Reviews. As usual, I am always open to feedback and other ideas on how to implement strong performance appraisals - feel free to comment!
1. Have the employee write their own performance review
- People tend to be tough on themselves. Thus, you can use the review as an opportunity to build their self-confidence if they exaggerate their under performance in a particular area. Additionally, they may have some insight on their performance that you haven't observed directly.
- You will discover what was important to the employee. Hopefully there isn't any misalignment with your priorities, but if there is, you can be prepared for their review meeting and address it there. Again, you're trying to minimize surprises during the Performance Review.
- This helps the employee learn to write reviews. The people you manage won't always be (or aren't) individual contributors - why not give them an opportunity to write a performance review? It might be easier because they know the subject of the review very well.
2. Get input from the colleagues of your employees AND their customers
3. Give yourself time to write an in-depth / comprehensive review
4. Proofread the performance review
5. Have HR in the room with you
Annual Performance Reviews are the capstone of your leadership coaching during the year. Ultimately, they are a quick description of a year's worth of work for your employee. Performance evaluations can dictate the size of a pay raise, determine promotability or even employability! They are also a reflection of your level of employee engagement. Invest time in your people with effective coaching and document their performance accurately through Annual Performance Reviews!