“What’s your greatest weakness?” The dreaded question typically asked in interviews may help sales managers reevaluate their approach to sales performance management to increase productivity and boost revenue for the company. Managers should pinpoint common weaknesses in their approach and turn them into strengths, knowing no performance management program is perfect.
A survey by Mercer found 51 percent of global performance management leaders in 2013 said their performance management planning could use improvements. With companies trying to find ways to increase performance, they could leverage big data to make smarter decisions when it comes to increasing pay for workers and helping align business strategies with employee performance. However, companies may not optimize their sales outcomes if they do not focus on the right metrics.
“The metrics used to evaluate performance management concentrate on compliance measures, with relatively few companies focusing on anything of a strategic nature,” according to the Mercer report. “For example, three out of four organizations report measuring the percentage of their workforce completing performance evaluations.”
The survey found there are knowledge gaps from not measuring certain metrics that could help further companies’ business strategies.
Here are three top top weaknesses commonly found in performance management programs:
1. Not harnessing data to make compensation decisions
While the Mercer survey in 2013 found 9 in 10 organizations established a pay for performance philosophy, the vast majority of companies are not using their existing technologies to make data-based decisions on compensation. About 4 in 10 respondents said they monitor and measure how performance ratings aligns with compensation, according to the survey by Mercer. Without using benchmarks and metrics to accurately measure employee performance, companies may give pay raises to workers who do not bring in as much money as star performers, lowering their return on investment. The survey showed 42 percent of companies said they needed to better connect their compensation decisions to performance management.
Companies should try to build on their successes with pay for performance with effective sales performance management software. By implementing data-driven solutions, they can make better decisions that reward top performing workers to increase overall productivity in the workplace.
2. Not allowing data to guide and shape employee behavior
While having the tools necessary to monitor data is a good first step, businesses need to be able to turn this data into action. According to the Mercer survey, just 22 percent of employers use formal and comprehensive feedback as part of their performance management. Within its own company, Google uses analytics to improve management of its workforce and influence actions, according to TLNT. As way to use data to its advantage, the tech company uses people analytics to make recommendations and change its workers’ behavior. Companies could use data to enhance their feedback to workers and communicate what areas they need to improve on.
3. Not measuring retention rates
Another weakness companies are likely to have when measuring data is not measuring the rates of retention in the workplace, which could make a difference when considering the money it takes to retrain replacements. Companies may also not recognize blind spots in their performance management approaches that could see top workers leaving because they did not get the recognition they deserved. The Mercer survey said about 1 in 5 respondents measured the difference in retention rates between the best performing workers and those who were poor at their job. Companies should determine whether their retention rate for their star workers is low to make sure they can find ways to keep these staff members satisfied with their jobs and stop them from jumping ship to a competitor.
