Module Ten

Evaluating the Performance of Salespeople

Purposes of Salesperson Performance Evaluations

Ensure that compensation is consistent with actual salesperson performance Identify salespeople that might be promoted Identify salespeople who should be terminated and to supply documentation Determine training and counseling needs Human resource planning Identify criteria for recruiting and selecting salespeople

Purposes of Salesperson Performance Evaluations

Advise salespeople of work expectations Motivate salespeople Help salespeople set career goals Relate salesperson performance to sales organization goals Enhance communications between salesperson and sales manager Improve salesperson performance

Salesperson Performance Evaluation Approaches

General conclusions: Annual basis Combine input and output criteria Use quantitative and qualitative measures Performance standards and quotas are set in collaboration with salespeople Assign weights to different objectives Incorporate territory data

Salesperson Performance Evaluation Approaches

General conclusions (continued): Multiple sources of information Conducted by the field sales manager who supervises the salesperson Provide a written copy of the review and conduct a personal discussion

360-Degree Feedback System

Evaluated by multiple Sales raters Manager Salespersons value to the organization and customers Ev Ev allu au on ttiio n atti a io a Considerations llua au on n Ev a Ev Salesperson Quality data Confidentiality Useful Ex al rs Cu te rn e e Not used exclusively s rn nt tom to a I m l s
Evaluation Evaluation Evaluation Evaluation

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Perspectives on Salesperson Performance Evaluation

Outcome-Based Little monitoring of people Little managerial direction of salespeople Straightforward objectives measures of results Behavior-Based Considerable monitoring of salespeople High levels of managerial direction of salespeople Subjective measures of salesperson characteristics, activities, and strategies

Dimensions of Salesperson Performance Evaluation

Behavioral Behavioral Results Results

Salesperson Salesperson Performance Performance

Professional Professional Development Development

Profitability Profitability

Criteria for Performance Evaluation

Behavior: Activities performed Activities to promote long-term customer satisfaction Sales calls Customer complaints Required reports submitted Training meetings Letters and calls to prospects

Criteria for Performance Evaluation

Professional Development: Assess improvements in certain characteristics: traits, skills, knowledge Attitude Product knowledge Initiative and assertiveness Communication skills Ethical behavior

Criteria for Performance Evaluation

Results: Measured objectively: sales, market share Possible negative effects Sales quotas

Elements Important in Assigning Sales Quotas

Concentration of businesses Geographic size of the territory Growth of businesses within the territory Commitment by the sales manager to assist Complexity of products sold Past sales performance Extent of product line Financial support Amount of clerical support

Criteria for Performance Evaluation

Profitability: Specific products sold Prices negotiated Expenses incurred Criteria

Performance Evaluation Methods:

Characteristics any method should include
Job Relatedness Reliability Validity Standardization Practicality Comparability Discriminability Usefulness

Performance Evaluation Methods

Graphic Rating/Checklist Methods
Performance evaluation form Especially useful in evaluating behavioral and professional development criteria Good on most characteristics, especially job relatedness, standardization, practicality, and comparability Disadvantage is providing evaluations that discriminate sufficiently

Performance Evaluation Methods:

Ranking Methods
Rank all salespeople according to relative performance on each performance criterion These methods force discrimination as to the performance of individual salespeople May be complex Rankings only reveal relative performance evaluation

Performance Evaluation Methods:

Objective-Setting Methods
Management By Objectives (MBO) Mutual setting of well-defined and measurable goals within a specified time period. Managing activities within the specified time period toward the accomplishment of the stated objectives. Appraisal of performance against objectives.

Performance Evaluation Methods

Behaviorally Anchored Rating Scales (BARS)
Links behaviors to specific results Salespeople are used to develop performance results and critical behaviors Positive feedback about behaviors may be more effective than positive output feedback

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BARS Scale: Cooperative Relations with Other Sales Team Members Anchor Statements Could be expected to cooperate when aid is requested by other team members. to go out of her/his way to help the team achieve its goals.

Behavioral

to lend a helping hand and can be expected to try hard to help the team. to occasionally support the team on problems encountered in the field to contribute half-heartedly to the team effort to accomplish goals not to care much about the team and its members to antagonize members of the team and pull against the team goals

Performance Evaluation Bias

Occurs when a managers evaluation of a salesperson is affected by considerations other than the specified criteria Common sources of bias: Personal relationships Perceived difficulty of territory Impression management Halo effect Outcomes bias

Framework for Using Performance Information

Evaluate Salespeople against Relevant Performance Criteria Identify Problems

Isolate Causes

Determine Solutions

Salesperson Job Satisfaction

Job satisfaction related to turnover, absenteeism, motivation, and organizational commitment Job satisfaction may be related to performance (direction of relationship is unknown)

Salesperson Job Satisfaction

INDSALES measures satisfaction with: Job Fellow workers Supervision Company policy and support Pay Promotion and advancement Customers Results may identify areas where manager may intervene to improve job satisfaction