Why You Should Stop Doing Annual Reviews

It’s not that annual reviews are bad… it’s just that they’re not enough! Whether the person you are managing is doing a great job, a terrible job, or performing somewhere in-between, waiting twelve months to let them know that information is damaging to them and to your company.

One of the worst feelings for a salesperson is, “My manager has no idea what I’m doing or how I’m doing every day.” Failing to notice a salesperson's performance or failing to give them feedback on their performance is a management sin. Holding on to that information for a full year – well that’s just mean.

Most managers believe that people usually leave an organization for reasons related to money but that’s not true. Studies show that the vast majority of people who quit their job do so because they felt unnoticed or underappreciated by their manager. The power of consistent feedback is widely underrated by managers and this usually proves to be a very expensive mistake.

Compare Good Coaching and Good Parenting

I often compare good management and coaching with good parenting. In both cases, the feedback given can either encourage growth or stunt it altogether.  

Imagine a child learning to walk.

• What if her parents were never around so she never received encouragement or feedback?
• What if, when her parents were asked to come watch her take her first steps, they declined and said, “We’ll come watch her after she shows us that she can be successful at doing it a few times all on her own.”
• What if they said, “We’ll make a note to discuss this with her at her annual review and let her know how she’s doing then.”

I know. That’s ridiculous! What parent would do that? They are invested in the growth and development of their child and they care about her.

Annual Reviews Aren't Enough: Your People Need Feedback

I have found that the best managers feel exactly the same about their salespeople. They are invested, they care, and they understand how important it is to provide constant feedback and encouragement.

If your company has a policy for conducting annual reviews, fine! Conduct an annual review. Nothing wrong with that. Just make sure there are no surprises during that conversation. Your direct report should have a clear understanding of exactly how well they performed all year compared to your expectations – and their own.

Here are 10 ways to grow an individual and increase their sales performance with successful feedback:

1. Set clear expectations so they know exactly what you want them to do.
2. Pay attention and watch closely so you don’t miss their big moment.
3. Don’t wait for them to arrive at the final destination to give them feedback.
4. Cheer often and cheer loudly.
5. Prepare yourself for how you will respond when they are successful - and when they fall down.
6. When they do fall, tell them they’ll be alright and get them right back up to try again.
7. Don’t hold their mishap against them; call it a do-over.
8. Gradually increase your expectations – but only when they are ready.
9. Give them opportunities to demonstrate their skills to others once they feel confident.
10. Be consistent.

It’s not easy, but taking the time to give the right kind of feedback to your talented salespeople will pay off. It’s how you can develop them, keep them, and turn their talent into performance.