How to Conduct a Sales Performance Appraisal [Guide]

Business Owners

Joseph Tadros

January 24, 2024

Sales is how you grow a company. To generate sales, you need to have an effective sales team. But how do you measure the effectiveness of your salespeople or team?

You can set a target of the number of items sold per month. Or number of clients gained per month. But is that the only way to evaluate sales performance?

The answer is no. The best way to evaluate a salesperson or a sales team is by using a sales performance appraisal.

A performance appraisal looks at different aspects of the sales executive and the sales process.

While there are many facets of a sale, in this article we’re focusing on your salespeople. The people who close those deals and make those sales and how to evaluate them.

If you’ve ever struggled to evaluate a sales person, manager, or team, this article is for you. Keep reading to find out how to conduct a sales performance appraisal.

What is a sales performance appraisal?

To evaluate employees, companies turn to different types of performance appraisals. One of those types of appraisals is the sales performance appraisal. This one is for salespeople only.

However, it’s important to note that many teams or departments can relate to or play a role in completing the sale.

Unlike the other types, the sales performance appraisal or review focuses on various aspects of sales.

Some companies call their salespeople business development executives, others may have different names. It’s, therefore, important to not limit yourself to specific job functions, but to who is responsible for the sale.

If you call your sales team, ‘the Ninja team,’ then you’ll conduct a sales performance appraisal for your ‘Ninja team.’

It’s worth noting that you may combine your sales performance appraisal with other types of appraisals like a team performance review, individual performance appraisal, or something else.

Why sales performance reviews are important

Conducting a sales performance appraisal helps you as a sales manager and benefits your team.

Here are several reasons how this type of appraisal helps salespeople.

1) Better communication:

Conducting regular performance appraisals is important because they help improve communication between team members and you, the manager. They also improve communication with your manager, who could be the regional sales manager or CEO, or even HR.

2) Constructive feedback:

Performance appraisals offer the perfect opportunity for managers to provide constructive feedback to their team members.
This helps team members identify their strengths and weaknesses and areas where they can improve. It also helps them work on their personal and professional self-development plan.
Depending on the type of performance appraisal you’re using, other team members may contribute to the appraisal. This is more common with peer reviews and project-based performance reviews.

3) Opportunity to grow:

Sales executives are customer-facing people. It’s important they’re equipped with the skills needed to not only build relationships with clients but also retain them. Salespeople can take the performance review as an opportunity to find ways to improve their skills. These could be communication skills, writing skills, among others.

4) Motivation and empowerment:

Getting regular feedback means employees can get the motivation and support they need to drive them forward. Performance reviews, in general, can be a strong and empowering tool for employees.

General tips for conducting performance appraisals

Before we dive into what to expect from and how to conduct a sale performance review, there are a few points to stress first.

Performance evaluations in general can be tricky.

That’s why, you need to:

1) Be objective

Managers and senior professionals who conduct performance appraisals should always be objective. They’re not evaluating a person based on their personal traits but about their job performance. Unless those traits directly impact the person’s job.

The performance review should not include personal dislike or personal issues or matters.

2) Be consistent

To ensure the performance reviews you’re conducting are effective, they should be regular. It’s not a one-time event.

Many companies conduct annual performance reviews to justify bonuses, or lack thereof, to their teams. But conducting a monthly, quarterly, or half-annual performance review can be more beneficial.

It depends on the type of work involved.

3) Determine the type of appraisal to use

The team lead or manager should decide which type of performance review they’ll use. A sales manager will use a sales performance review, whereas a project manager (not sales) may choose a project-based performance appraisal or a team performance review.

If you’re just starting out with performance reviews, you can ask your HR team for help.

If you’re not sure where to start with performance appraisals, you can get in touch with Tawzef, and one of our experts can guide you.

4) Make sure it’s a two-way conversation

Whoever is conducting a performance appraisal, whether it’s the manager, team leader, or even the CEO, should ensure it’s a two-way conversation.

Most employees dislike performance reviews or appraisals. They feel they’re unnecessary or a waste of time. You’ll likely find this prevalent among your managers as well. They feel they’d be more productive doing something else.

This is usually because it’s a one-sided conversation where the manager lays out expectations, reviews progress, and makes a decision. No conversation involved.

When managers “correctly” conduct performance reviews, the process becomes beneficial for them, the employee, and the company as a whole.

How to conduct a sales performance appraisal

Now, let’s review the steps you should follow to conduct an “effective” sales performance appraisal in your team or company.

1) Have a clear job description for your salespeople

“The first step in getting any performance review right is to have a clear and well-defined job description,” explains Tawzef’s operations manager Joseph Tadros.

Most people think they can start a performance review by printing out a template and ticking a few boxes or writing some notes. That’s now how performance appraisals work.

“Having a well-defined job description means a manager can evaluate whether or not a salesperson or team member is performing their role and duties or not,” Tadros adds.

“This applies to all kinds of performance reviews, not just sales,” Tadros stresses.

2) Set achievable KPIs for each person

The next step in conducting a sales performance review is to set clear and achievable key performance indicators (KPIs) for each member of your team.

The clearer the KPIs the better. Because with sales, it’s easy to get lost in the set target without taking other elements into consideration.

You can sell to a customer today, but it doesn’t stop there. Sales representatives need to maintain good relationships with their customers to ensure repeat business.

3) Set clear expectations

Besides clear KPIs, you need to have clear expectations about what your sales reps can and can’t do.

In sales, it’s easy to sidetracked. Are you evaluating the person’s efforts? Their character? Or just the numbers?

Any performance review should include clear expectations and achievable goals.

4) Collect data

To correctly evaluate a salesperson or team, you need to collect data about their performance. This will feed into your KPIs. Data can vary depending on the duties assigned to each sales rep and their seniority.

For example, you can collect data such as:

Number of customer calls made
Duration of these calls
Number of deals closed
Time taken to close a deal
Number of repeat customers (or clients)
Customer satisfaction scores

Among other elements.

5) Evaluate performance and communicate your findings

With your KPIs, objectives, and expectations, it’s time to sit down with your sales reps individually and discuss each of these points.

It’s important for this to be a two-way conversation. Make sure your salespeople ask questions, voice concerns, discuss problems they’re facing or have faced,…etc.

Moreover, based on the data you’ve collected, you should discuss any issues you see as a sales manager.

For example, does your team member Ahmed take a long time to close a deal compared to others on the team? If yes, why is that? Maybe some of Ahmed’s clients are problem clients, which is why he takes longer to convince them to sign on.

6) Identify trends and patterns

Once you’ve conducted 2-3 sales performance reviews, you can begin to identify trends and patterns with certain team members. You’ll also be able to see patterns in buying behavior.

For example, you may find a sales spike around the Black Friday weekend and Christmas, mainly due to discounts.

If you’re in B2B, you may notice sales reps signing more contracts in December and January. This could be because companies allocate new funds for their new year’s budget or because of end-of-year discounts for some software products.

Identifying these patterns helps you manage the sales process and compensation for team members based on peak sales periods.

7) Identify ways to improve

Finally, and based on the above, you should use the sales performance appraisal as a means to improve. This can be helping and upskilling team members, improving the sales process, or something else.

It will differ from one company to another and from one sales team to another.

Based on your findings and the overall appraisal, you can set goals for the next sales appraisal. Your goals should be SMART goals. That is, they should be specific, measurable, achievable, relevant, and time-bound.

Tips for effective sales performance reviews

The above highlights how to conduct a sales appraisal for your team members. Here are a few more tips, not in any particular order, to ensure your sales performance reviews are effective and successful.

1) Conduct sales meetings

Sales managers should conduct more sales meetings with their team members. As long as they’re productive and efficient.

There should also be more meetings with managers, provided they’re productive.

Sales and marketing consultant Mostafa Aly comments: “Sales teams should conduct sales review meetings once a week to review sales performance, the pipeline, and available opportunities.”

“These sales meetings can be beneficial for sales executives, including juniors. It can be a learning opportunity for some,” Aly explains.

It’s also important for sales executives and managers to discuss and be aware of how mature sales leads are in the pipeline, he adds.

This may vary depending on the type of company and sales needed. But it can be applied to tech and software companies.

2) Conduct sales performance appraisals more often

The problem with most performance reviews is they’re too few and far between. Instead, conduct your sales performance reviews more often.

You should find a balance, where performance appraisals aren’t too frequent that they waste time for you and your team, but that aren’t too wide apart that sales reps forget what you last discussed.

A good balance is having a quarterly performance review. If you have new sales hires, you may choose to conduct monthly performance reviews during their probation period.

3) Try to be positive

One of the reasons performance reviews, sales or otherwise, fall flat is because managers take reviews as an opportunity to be mean to team members.

Moreover, sales reps don’t want to hear about their bad or negative performance, especially if it’s really bad. So, you should try to frame your message in a positive way.

This doesn’t, in any way, mean you shouldn’t be constructive. Just make sure the sales rep doesn’t feel personally attacked after sitting with you for their quarterly performance review.

4) Turn the performance review into a collaboration

As mentioned, many employees see performance appraisals as a one-way discussion from the manager to the employee.

One way to make the review more effective and successful is to get the employee to contribute their experiences.

5) Get to know your sales team and their weaknesses

Whether you’ve been recently promoted, just joined a company as a sales manager, or have had new members join your team, you should get to know them.

Conduct one-to-one meetings with each member of your sales team and get to know their strengths and weaknesses.

6) Provide support to your team

Sales is seen as a cut-throat job. As a sales manager, you should support your team, help them grow, and overcome their weaknesses, explains Tarek Refaat, senior sales manager at Bahwan CyberTek.

If your team is struggling to achieve its sales targets, conduct team-building activities and sales mockups and scenarios to help them.

As a sales manager, you should be familiar with your team members’ weaknesses. The performance appraisal should include their personal and professional development. This means you can guide them to take on courses that can help them do their job better.

If you have new junior salespeople, a little hand-holding doesn’t hurt to get them on the right track.

It’s important to be aware of any red flags one or more of your team members raise, stresses Refaat.

7) Don’t let the competition drive a wedge in your team

Salespeople tend to be competitive. And companies encourage that. However, there is ‘healthy competition’ and ‘unhealthy competition.’

Unhealthy competition will lead to team members trying to steal each other’s clients, trying to sabotage others’ work, among other negative acts, explains Refaat.

You don’t want your sales team to hunt and hurt each other to achieve the highest target. This will make them lose sight of what’s important and can hurt your company’s image in front of current and potential clients, he adds.

Final words

With performance reviews, including sales performance appraisals, it’s important to remember there’s no one-size-fits-all. Don’t look for a template to replicate and use with your salespeople. It won’t work.

You can get inspiration from templates and other companies. However, every company and sales team is different. They’ll have different job descriptions, different processes and workflow, and different performance reviews.

It’s also important you don’t put your sales team under the constant pressure to achieve. Not everyone works well under pressure. Moreover, different people have different motivations for success.

For some, it could be their ego that’s driving them, or the money. ‘For some, feeling like they’re working in a stable environment could be a driving force for them to achieve or exceed their sales target,” notes Refaat.

As a sales manager, and ultimately as business owner or general manager, you don’t want to teams to stress and burnout. This will result in people quitting, increasing employee turnover, which results in lost revenues and lower sales.

So, remember that evaluation is an ongoing process. Be sure to tailor your sales performance review to your business, your team, and your team and business needs.

Need help creating performance appraisals for your teams? Get in touch with Tawzef.

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