JOT (Just One Thing) to take away: don’t mistake performance management minimums for a performance assessment framework, it will cost you in the long run.
What is Performance Management?
Broadly defined as the way by which a company sets performance expectations for it’s sales team. This includes setting a target which relates to compensation, but it also includes setting minimum targets. These minimum targets set a clear line below which the sales team member starts to enter a zone in which they are in danger of failing. Some organizations use this as an opportunity to offer additional coaching, but all to often this is the beginning of the end for that sales person.
Why do we need it?
- Communicating expectations to the sales team
- Standardizing the way we enforce minimums, mitigate liability of treating people differently
- Early warning system for managers to start taking more drastic coaching measure with a sales person dropping below the minimums.
Whats the issue?
So what’s the issue, sounds like performance management does some pretty useful things?
In theory, yes, but in reality it’s a blunt instrument for deciding who can and can’t be successful in your organization. Its more of a hand grenade than a scalpel. In Brian Zang’s interview here, he talks about a situation where you have two sales people. The first, a top performer at 120% to plan every month. The top performer has a very toxic attitude, does not help out the rest of the team, and ultimately does not give clients a great experience. The second person, a middle bottom performer.
The reality is that with performance management, you can’t choose which person is better for your organization, you can’t break the rules for someone if it turns out you want that type of person in your organization.
Even worse, this blunt instrument abstracts the responsibility of performance assessments, and takes the power away from the sales manager. The manager can rationalize that “I’m just following the company rules”, rather than learn to think critically about the skills of their employees. For many new managers performance management is a crutch.
- Performance Management is a blunt tool
- It’s a blunt tool because it’s only based on one number ( a number thats chosen because its easier to measure than the more accurate numbers)
- Its a crutch, and leads to weak management
- Ultimately it doesn’t drive performance
- It only measure a number
- Works more effectively in mature business with lots of stable historical data
The reason that performance management is often a blunt instrument, is that it’s often measure off of one number. Revenue or contracts closed. This number isn’t a bad number, its just that its often the easiest number to measure, rather than the best indicator of an employees skills or their potential.
What you really need as an org is a performance assessment framework.
What is performance assessment?
This is the method or framework by which a company assesses a sales persons skills and potential. It should be the core of a performance management plan, but often gets overlooked because it’s more work that simply picking a minimum target.
New managers struggle to assess why new sales people are struggling and too often come to the conclusion that it’s the sales persons fault. How many young leaders are mature enough to come to the conclusion that their coaching skills as a manager are more likely to be lacking?
Mark Roberge, in his book Sales Acceleration Formula, observes:
“Time and time again, I see managers giving up on new hires too early. Yes, we would all love it if new hires crushed it right out of training and never looked back. But often, the “weak” salespeople just need some effective coaching and someone to believe in them for a few months before everything starts to click.”
Performance assessment is the skill by which a sales manager should be able to:
- observe a sales person
- analyze metrics
- identify and diagnosis a problem or JOT
- Propose a solution to the problem and offer words of encouragement
- Follow up to see that progress was made
- Tracking to see how the sales person is developing and learning over time
These are some of the skills required to put a standardized performance assessment structure in place for an organization. We’ll dive in further with a follow up post, but in the meantime, think about how your organization thinks about performance management, minimum expectations, and whether or not it’s an accurate way to assess people’s skills.