How To Start & Grow Your Business

Firing Managers for Failing to Meet Sales Quota is a Mistake

From the Editor's Desk
Jan 10th, 2015
  • Estimated reading time: 2 min read
  • Hummy's
    Highlights

    1Evaluate performance on metrics, not sales quota. 2Many sales geniuses have been fired for missing quota. 3Avoid misjudging your sales managers' effectiveness.
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Sales Management

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When sales managers miss their annual quota, which 40% do each year, their jobs are in serious peril. From the company’s perspective, they’ve been hired to hit a target number and accomplishing that alone determines whether they get a promotion or get shown the door.

A recent article on Forbes.com by Dan Perry raises the question, “How are you measuring your sales managers? Of course, quota attainment is critical, but is it only that?”

Fired for the wrong reasons. . . extraordinary men

Perry briefly recounts stories of several brilliant leaders, from former Mayor Michael Bloomberg to Lee Iacocca to Mark Cuban. These legendary individuals were written off at one point early in their careers by an employer for perceived incompetence in business.

Imagine how the employers must have felt when they realized how badly they misjudged the value of these great minds.“When it comes to evaluating your sales managers in your talent management program, consider metrics other than quota attainment,” Perry writes.

Group of Multiethnic People Discussing About Business Issues

Judge your sales managers using these metrics:

• Turnover
• Lost Selling Time
• Ramp to Productivity
• Sales Team Quota Gap
• Historical Performance
• Percentage of Sales Team Career Advancement
• Forecast Accuracy

Turnover is a good metric to use, because the overwhelming reason that top salespeople leave is inept management. If your sales manager fails to provide coaching and development, he or she will lose the star performers.

Sales Team Quota Gap is the measurement of the distribution of the sales performance across the team. For example, “Are the majority of your sales people making their numbers or is it one superstar saving the day?”

Historical Performance can tell you if results are chronically inconsistent, or if the times when their quota has been missed are exceptional situations, Perry explains.

In a nutshell:

These are just brief descriptions of some of the other metrics that are more helpful for properly evaluating your sales managers. Perhaps they will help you prevent making a mistake like Walt Disney’s former boss who claimed Disney “lacked imagination and had no good ideas.”

Perry concludes, “Utilize more than quota attainment when evaluating sales managers. Remember that your best sales managers may actually be the ones who don’t make their quota on a consistent basis.”

To read the original article in its entirety, please visit Forbes.com.

About the Author

From the Editor's Desk

This article was written by a bizHUMM Staff Writer. We aim to provide practical tips that help solve your burning small business questions. If you have any suggestions or ideas for articles, please email them to: editor@bizhumm.com