1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (1) 11 Evaluating the Performance of...

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Copyright © 2000 by Harcourt, Inc. All rights reserved. (1)

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Module 11

Evaluating the Performance Evaluating the Performance of Salespeopleof Salespeople

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Purposes of Salesperson Purposes of Salesperson Performance EvaluationsPerformance Evaluations

• To ensure that compensation and other reward disbursements are consistent with actual salesperson performance.

• To identify salespeople that might be promoted.

• To identify salespeople whose employment should be terminated and to supply evidence to support the need for termination.

• To determine the specific training and counseling needs of individual salespeople and the overall salesforce.

• To provide information for effective human resource planning

• To identify criteria that can be used to recruit and select salespeople in the future.

• To advise salespeople of work expectations.

• To motivate salespeople.

• To help salespeople set career goals.

• To improve salesperson performance.

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Salesperson Performance Salesperson Performance Evaluation ApproachesEvaluation Approaches

• Most occur annually.• Most combine input and output criteria which are evaluated

using quantitative and qualitative measures.• When used, performance standards or quotas are set in

collaboration with salespeople.• Territory data is used to establish objectives, which are assigned

different weights.• Multiple sources of information are used.• Immediate supervisor performs the evaluation.• Written review and personal discussion of the review are part of

the process used by most firms.

General conclusions regarding evaluations:

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Salesperson Performance Evaluation Salesperson Performance Evaluation 360-Degree Feedback360-Degree Feedback

(Exhibit 11.1)

SalespersonE

valu

atio

n

EvaluationEvaluation

Evaluation

Sales Manager

Team M

embers

One

self

External Customers

Evalu

atio

n

Inter

nal Custo

mers

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Key Issues in Evaluating and Key Issues in Evaluating and Controlling Salesperson PerformanceControlling Salesperson Performance

• Outcome-based Perspective– Focuses on objective measures of results with little

monitoring or directing of salesperson behavior by sales managers

• Behavior-based Perspective– Incorporates complex and often subjective assessments

of salesperson characteristics and behaviors with considerable monitoring and directing of salesperson behavior by sales managers

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Perspectives on Salesperson Performance Evaluation(Exhibit 11.2)

Outcome-based Perspective

• Little monitoring of people

• Little managerial direction of salespeople

• Straightforward objectives measures of results

Behavior-based Perspective

• Considerable monitoring of salespeople

• High levels of managerial direction of salespeople

• Subjective measures of salesperson characteristics, activities, and strategies

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Dimensions of Salesperson Performance Evaluation

(Figure 11.1)

Behavioral

SalespersonPerformance

ProfessionalDevelopment

Results

Profitability

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Criteria for Performance Evaluation

• Behavioral Criteria– Consists of criteria related to activities

performed by individual salespeople– Sales calls, customer complaints, required

reports submitted, training meetings, letters and calls

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• Professional Development Criteria– Assess improvements in certain characteristics

of salespeople that are related to successful performance in the sales job

– Attitude, product knowledge, initiative and aggressiveness, communication skills, ethical behavior

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• Results Criteria– Examine results achieved.– Sales(Volume/Quota), Accounts (Lost/New),

Market Share

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Results CriteriaResults CriteriaSales Quota

A reasonable sales objective for a territory, district, region, or zone.

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Market Response FrameworkMarket Response Framework(Figure 11.2)

EnvironmentalEnvironmental FactorsFactors•Control Unit Attractiveness•Business Position

OrganizationalOrganizational FactorsFactors•Marketing Effort•Sales Management Effort

Market Market Response Response

Behavior Behavior •Effort•Quality

SalespersonSalesperson FactorsFactors

CharacteristicsCharacteristics•Role Perceptions•Aptitude•Skill Level•Motivation

Planning and Planning and Control Unit Control Unit

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Elements Important in Elements Important in Assigning Sales QuotasAssigning Sales Quotas

(Exhibit 11.8)• Concentration of Businesses within the Territory• Geographic Size of Territory• Growth of Businesses within the Territory• Commitment by the Sales Manager to Assist the Sales

Representative• Complexity of Products Sold• Sales Rep’s Past Sales Performance• Extent of Product Line• Financial Support (e.g., compensation) a Firm Provides• Relationship of Product Line• Amount of Clerical Support

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• Profitability Criteria – Salespeople have an impact on gross profits through the

specific products they sell and/or through the prices they negotiate for final sale

– Salespeople affect net profits by the expenses they incur in generating sales

– Profit (Net/Gross), Orders (Order/call), Selling Expense (Expense vs Budget)

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Performance Evaluation Methods Characteristics any method should include:

– Job Relatedness

– Reliability

– Validity

– Standardization

– Practicality

– Comparability

– Discriminability

– Usefulness

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Performance Evaluation MethodsPerformance Evaluation Methods Graphic Rating/Checklist Methods

Consist of approaches where salespeople are evaluated using some type of performance evaluation form

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Performance Evaluation MethodsPerformance Evaluation Methods Ranking Methods

Rank all salespeople according to relative performance on each performance criterion rather than evaluating them against a set of performance criteria

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Performance Evaluation MethodsPerformance Evaluation Methods Objective-Setting Methods

• Management by Objectives (MBO)– Mutual setting of well-defined and measurable

goals with in a specified time period– Managing activities within the specified time

period toward the accomplishment of the stated objectives

• Evaluate performance against objectives– Exhibit 11.14 - Quota Evaluation Example

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Performance Evaluation MethodsPerformance Evaluation Methods Behaviorally Anchored Rating Scales (BARS)BARS)

(Figure 11.3)

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Performance Evaluation BiasPerformance Evaluation Bias

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Evaluating Team PerformanceEvaluating Team Performance

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Framework for Using Framework for Using Performance Information Performance Information

(Figure 11.4)

Determine Sales Management Actions to Eliminate Causes of Future Problems and to Solve Existing Problems

Evaluate Salespeople against Relevant Performance Criteria

Compare Salesperson Evaluations to Identify Problem Area

Investigate Problem Areas to Identify Causes of Performance Problems

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Salesperson Job SatisfactionSalesperson Job Satisfaction

• Measuring Salesperson Job Satisfaction– Revised INDSALES Scale

• Job, Co-Workers, Supervision, Company Policy and Support, Pay, Promotion, Customers

• Using Job Satisfaction Information

1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (1) 11 Evaluating the Performance of...

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