This blog series from Brian Gardner, founder of SalesProcess360, is based on monthly meetings with members of his Industrial Sales Management Peer Groups, which discuss issues important to distribution and manufacturing sales managers and executives.

Salespeople expect an annual performance review, but many distributors wonder how they can make these perennial sit-downs far more meaningful and action-oriented. Distribution executives in my Industrial Sales Management Peer Group shared these challenges in a recent monthly meeting:

• Time between reviews. As one said: “To be honest, a one-year review is too long between performances for a meaningful meeting.”
• Creating an environment where outside sales and others don’t feel like the meeting is stacked against them. Frequently, salespeople come to the meeting expecting criticism.
• Knowing whether to separate raises from the review. When raises are always handed out at reviews, they may keep salespeople from focusing on the bigger picture.
• Following up with salespeople on action items uncovered in the review. It can be difficult to ensure that the review has meaning in the long-term without a detailed plan for follow-up.

While some of the group’s members reported conducting once- or twice-yearly reviews and others had no formal process, a few were experimenting with fresh approaches to performance reviews.

One of our members talked about 360-degree reviews, also known as 360-Degree Feedback. This approach requires members of an employee’s circle in the company to provide direct feedback on his performance; it also includes a detailed self-evaluation. The review typically includes management feedback and may include external feedback from suppliers or customers.

This particular manager said he was attracted to 360-degree reviews because they go beyond numbers. No matter how well an employee is doing, everyone needs to “practice and improve and has areas to develop personally and professionally.” His company started small, trying 360-degree reviews for half the team, a few of which were outside sales.

Here's how it worked: Based on a set of core competencies for each role, five to seven people reviewed each employee, ranking them from 1 to 5 and providing suggestions for improvement. Those were consolidated into one spreadsheet with commenters’ names removed. An average rating was presented to the employee, as well as the employee’s own self-evaluation scores. When a self-review is compared with a group review, it’s easy to identify blind spots, areas that the employee did not know needed improvement.

These reviews helped to turn around the performance of some underperforming team members. It also gave those who were already performing well better direction. The most effective was creating a plan for the employee, who would take full ownership, which included a follow-up meeting and regular check-ins with management.

Building structure around sales performance reviews brings better results. Another group member's management team meets twice a year with outside sales. They use a standard form with seven categories that not only include hard numbers but also the salesperson’s connections within and outside of the company, focus on growth initiatives and activities. The form also includes documented cost savings, which the company incentivizes with a year-end reward. Finally, the company focuses on whether that salesperson is recording opportunities and other activities in its customer relationship management system.

While some of the other companies in our group didn’t have a structured program, many were using CRM technology to track progress toward goals. If used consistently, a manager can easily pull up the numbers he needs to ensure the company is moving in the right direction; this may include quotes, quotes value, bookings, number of orders and so on.

Technology also improved the frequency of communication between management and salespeople in the field. As one group member said: “You can text a guy and talk to him immediately. It didn’t used to be that way.”

When I was a sales manager for my family’s rep/distribution company, I put in place a quarterly process that included a monthly scorecard on key performance indicators. How many sales visits were conducted a month, and what’s that trend look like over several months? How many opportunities are they putting into the system? Are there any overdue opportunities that have not been revisited? What do quotes look like? The picture these paint is a leading indicator for your business. With today’s technology, it’s easy to pull much of this data.

The key for me during these reviews was ensuring they were results-focused and action-oriented. The salesperson would come away from the meeting with 10 action items to work on, which I saw as a manageable amount for a quarter. We’d then review progress in our next review.

It is also important to get a salesperson to buy-in and own the process to avoid a defensive posture during the meeting. Approach it as a partner would: “I want to know how you are going to grow your territory – and what you need to be able to do that. We want feedback on how you are investing in your business.”

What’s working for you? Is it time for you to revisit your sales performance reviews?

If you are interested in joining a Peer Group, visit salesprocess360.com/industrial_sales_management_peer_groups or contact Brian Gardner at brian.gardner@salesprocess360.com. Gardner is the founder of SalesProcess360 and has spent more than 25 years in sales and sales management in the industrial market. He served as a sales manager for a major regional rep/distribution company for 15 years before founding Selltis LLC, the only industrial-focused sales team CRM solution. He contributed to the MDM book, The Distributor’s Guide to Analytics.