Few things cause more anxiety than fear of the unknown. Prevailing research reveals the importance of using hard data and constant feedback to evaluate sales performance. "You don't know what you don't know," goes the old saying. And in evaluating sales performance, it's become clear that if you don't know your numbers, you don't know your sales force.
Two studies recently released by the Harvard Business Review are indicative of this reality, and accentuate the need for Sales managers to become more scientific in their evaluation.
How to Evaluate Sales Staff Performance
Two months ago, the Harvard Business Review published an article entitled, "Most HR Data is Bad Data." Its key insight: You are not a reliable relater of others' workplace performance. Your psychology simply prohibits it.
From the article: "A significant body of research shows that people are disturbingly unreliable raters of other people’s performance. The effect that ruins our ability to rate others has a name: Idiosyncratic Rater Effect. It proves that we evaluate things like 'potential' in others based own idiosyncrasies. How we define 'potential.' How much we it I think I have. How toughly we rate others. No amount of training seems able to lessen it. On average, 61% of my rating of you is a reflection of me. In other words, when I rate you, on anything, my rating reveals far more about me than it does about you."
Heavy stuff, right? Your own "best judgment" is as reliable an evaluator of quality as the film tastes of your work colleague who advised you to go see After Earth. The article goes on to cite 3 articles published in leading Psychology journals over the last 20 years, all of which followed the same methodology to the same result. The key information:
"In each of the separate studies, the approach was the same: first ask peers, direct reports, and bosses to rate managers on a number of different performance competencies; and then examine the ratings (more than half a million of them across the three studies) to see what explained why the managers received the ratings they did. The studies found that more than half of the variation in a manager’s ratings could be explained by the unique rating patterns of the individual doing the rating— in the first study it was 71%, the second 58%, the third 55%."
In other words, there is limited value toward using subjective judgment to measure performance. That's critical news and a very legitimate reason to worry if you're using personal judgment as the main driver of talent evaluation in your organization.
Some of these unknowns are causing problems, especially within the Millennial sector of the workforce. Per a different Harvard Business Review article also released last month, Millennials are predisposed to being more anxious than any prior generation.
Entitled "Milllennials Want To Be Coached at Work," the article denotes as follows: "For coaching to resonate, managers should also consider a young person’s psyche. In an analysis of psychological tests of 1.4 million college students from 1938 to the present, Millennials were found to have more self-esteem while also having more anxiety and a higher need for praise."
A further finding is that Millennials "seek an approachable manager," and do not shy away from feedback, but welcome it. Managers can actually utilize this character of their Millennial workforce to their advantage, providing that the feedback their giving is accurate, of course.
Solutions for Evaluating Sales Performance
For Sales Managers who find the latter problems a little too resonant for comfort, there are software options and playbooks available that delineate clear ways to find a solution. From a software standpoint, take a look at Ambition.
Top companies like PriceWaterhouseCooper, Lyft, Wayfair, FiveStars, Starwood drive front office revenue and operations via Ambition. Ambition creates accountability and recognition for front office teams that value performance-driven culture and transparent operations.
- Track and broadcast key metrics to personalized dashboards and office TVs.
- Put holistic goals right in front of your reps.
- Compare activity level and goal attainment across teams.
- Benchmark success for teams, roles and individuals.
- Drive results via automated scorecards, contests, recognition and reporting.
Contact us if you're interested in learning more.
Playbooks for Evaluating Sales Performance
From a playbook standpoint, respected Sales Coach Mike Kunkle has set forth a well-established approach for evaluating sales performance. It solves both problems concurrently. His slide deck, Managing Sales Productivity, offers an analytics-based solution for effectively diagnosing issues, evaluating talent and creating a proper feedback loop. Kunkle outlines 16 reasons why employees don't do what they are supposed to, with a full half of the reasons involving a lack of understanding about the established process and why there should be no deviation from it.
The below two charts offer a great way to create a feedback loop between rep and Manager. The loop continuously cycles and involves goal setting, role-playing, and mutual trading of information.
Kunkle also establishes an overall framework of how analytics and feedback all ties together. It's rare to see such a full-realized, comprehensive, and forward-thinking approach to talent management. Kunkle demonstrates the value that running an analytics-based performance evaluation and training program can have within your sales team.
The #1 Sales Performance Management Software
Ambition clarifies and publicizes real-time performance analytics for your entire sales organization. Using a drag-and-drop interface, non-technical sales leaders can build custom scorecards, contests, reports, and TVs.
- FiveStars: Adam Wall. Sr. Manager of Sales Operations .
- Filemaker: Brad Freitag. Vice-President of Worldwide Sales.
- Outreach: Mark Kosoglow. Vice-President of Sales.
- Cell Marque: Lauren Hopson. Director of Sales & Marketing.
- Access America Transport: Ted Alling. Chief Executive Officer.
Watch Product Walkthroughs:
- ChowNow. Led by Vice-President of Sales, Drew Woodcock.
- Outreach. Led by Sales Development Manager, Alex Lynn.
- AMX Logistics. Led by Executive Vice-President ,Jared Moore.
Read Case Studies:
- Clayton Homes: HBR finds triple-digit growth in 3 sales efficiency metrics.
- Coyote Logistics: Monthly revenue per broker grew $525 in 6 months.
- Peek: Monthly sales activity volume grew 142% in 6 months.
- Vorsight: Monthly sales conversations grew 300% in 6 months.
Contact us to learn how Ambition can impact your sales organization today.