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Time to Toss Annual Reviews? Reflektive E-Book Review

6a0147e05adc32970b01b8d23e3bb7970cTitle:  How to Manage Compensation without Performance Ratings

Published by/Authors:  Reflektive

Gated:  Yes

Download Link   

Length:  8 Pages

Why It’s Important:

”No one likes annual reviews, not the managers, not the employees and not HR.  It’s time to rethink how people are managed and paid for performance.  This paper from Reflektive starts the thinking process.”


  • Talent is changing: employees are more mobile, often as little as every two years. Businesses need creativity and problem solving skills which are difficult to measure with rating scales.
  • Many F500 companies are dropping performance ratings.
  • The purpose of ratings is failing. (It doesn’t work and hasn’t for 50 years: our words)
  • The question of compensation: If ratings are removed how does a company reward employees?
    • Managers are tasked with it. Managers must learn to manage people not tasks.
  • Rethinking Performance Management
    • Before you can drop annual reviews and ratings, companies must move to a modern performance management system.
      • Keep performance reviews, but more often without ratings, or...
      • Have real time monthly and quarterly check-ins
    • Reflektive suggests ways to determine compensation, keeping in mind the reason for reviews is to increase performance.
      • Managers get a budget bucket (didn’t they always have a budget?); they mention power law distribution a Forbes article[1] on the fallacy of the bell curve (worth reading).
      • They state that employees that are self-managed can determine their compensation – and say employees can self-select for a raise, but it is cloudy how this occurs. Yes, employees that are more aware of their performance can be driven to self-select themselves for raises.  Not all employees are hyper-performers (in fact very few are in most industries but not all).
    • Interesting, They also discuss a formula based on Company Metrics and instant rewards.

SLMA Comments: This is a good start on the subject of trashing annual reviews and working on 1:1 discussions, instant rewards and frequent performance reviews.    Certainly it takes some training to learn not just a new system but HOW to manage people for performance.  I have always been intrigued by the subject of a hallway review, 2-3 minute reviews, checking in frequently and self-planning. Reflektive seems to be on the edge of a difficult thing to change.

I guess if not all managers are up to the change they will self-select themselves out the door and that is probably a good thing. 

 Recommended for: 

  • President
  • CFO
  • CSO
  • HR or ER
  • CMO
  • VP Marketing
  • Director of Marketing
  • Marketing Operations Management
  • Sales Managers
  • Sales Operations Management

Download Link

This review was conducted independently without the advice or consent of the publisher.    

[1] The Myth Of The Bell Curve: Look For The Hyper-Performers, Josh Bersin Feb 19, 2014 , 315,621 VIEWS

Bonus   Secrets for Managing New Sales Reps for Early Success!  SLMA Radio



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