KKN India ltd sale force performance evaluation by Ketan thakur
KKN India Ltd. Sales force performance Evaluation Presented by:- Ketan Thakur Nikhil mehendru Jaykishan lauhana
Introduction to the case:-Regional sales manager(western region) asked for maximum annualIncrements to the general manager(sales) for the highest contributed by hissales team.The sales manager appreciate their performance and should be suitablyrewarded, but that does not mean salespeople from other regions are notperforming well.Method used for evaluation is the comparison of actual sales with previousyear’s sales and the market potential was not considered when the quotaswere established.Western region have given the maximum sales growth of 25 percent againstthe total growth of 15 percent .
Performance evaluation method in KKN India Ltd.Sales force performance evaluation in company include sales result but not the effort of the salespeople .No individual performance measure technique is used.Performance evaluation method compares the actual sales with the previousyear’s sales ,and the market potential was not considered when the sales quotasWere established.Inconsistency in measuring performance.
Purposes of Salesperson Performance Evaluations I1. To ensure that compensation and other reward disbursements are consistent with actual salesperson performance2. To identify salespeople that might be promoted3. To identify salespeople whose employment should be terminated and to supply evidence to support the need
Purposes of Salesperson Performance Evaluations II4. To determine the specific training and counseling needs of individual salespeople and the overall sales force5. To provide information for effective human resource planning6. To identify criteria that can be used to recruit and select salespeople in the future
The steps involved in the procedure are: Set policies on performance evaluation and control Decide bases of salespersons’ performance evaluation Establish performance standards Compare actual performance with the standards Review performance evaluation with salespeople Decide sales management actions and controlWe shall describe above steps briefly
Most companies establish basic policies. Examplesare: • Frequency of evaluation. Mostly once a year. • Who conducts evaluation? Mainly immediate supervisor • Assessment techniques to be used. E.G. Management by objectives (MBO), 360-degree feedback • Sources of information. Sales analysis, new business reports, lost business reports, call plans, etc • Bases of sales force evaluation. (next slide) • Conducting performance review sessions with salespeople
360-Degree Feedback System• Salesperson is Sales Manager evaluated by Evaluation multiple raters• Helps salespeople better understand Salesperson their ability to add value to their organization and their customers
A firm should decide which of the following bases / criteria it would use: (1) result / outcome based, (2) efforts / behavioural based, or (3) both results & efforts based A company selects performance bases or criteria from a list of alternatives, some of them shown below: Quantitative results / Quantitative efforts / Qualitative efforts / outcome bases / criteria behavioural bases / criteria behavioural bases / criteria• Sales volume • Customer calls • Personal skills • In value / units No. of calls per day Selling skills •Percentage of quota No. of calls per Planning ability • by products & customer Team player segments • Non-selling activities • Personality & Attitudes• Accounts / customers overdue payments Cooperation New accounts nos. collected Enthusiasm Lost accounts nos. No. of reports sent
Performance standards are also called sales goals, targets, sales quotas, sales objectives Performance standards for quantitative results are related to the company’s sales volume or market share goals Performance standards for efforts / behavioural criteria are difficult to set • For this, companies do “time and duty analysis” or use executive judgement Performance standards should not be too high or too low After establishing standards, salespeople must be informed
Salesperson’s actual performance is measured and compared with the performance standards For this, sales managers use different methods or forms: • Graphic rating scales • Ranking • Behaviorally anchored rating scale (BARS) • Management by Objectives (MBO) • Descriptive statements Companies combine some of the above methods for an effective evaluation system
Performance review / appraisal session is conducted, after evaluation of the salesperson’s performance Sales manager should first review high / good ratings, and then review other ratings Both should decide objectives / goals and action plan for future period After the review, sales manager should write about performance evaluation & objectives for the future Guidelines for reviewing performance of salespersons • First discuss performance standards / criteria / bases • Ask the salesperson to review his performance • Sales manager presents his views • Establish mutual agreement on the performance
Many companies combine this step with the previous step – i.e. performance review During performance review meeting with salesperson, sales manager does the following: • Identifies the problem areas. E.G. Sales quotas not achieved • Finds causes. E.G. less sales calls, poor market coverage, or superior performance of competitors • Decides sales management actions E.G. train salesperson, redesign territories, or review company’s sales / marketing strategies If a salesperson’s performance is good, he / she should be rewarded and recognised
Salesperson responsibilities are diverse Necessitates four areas being assessed: ◦ Activities ◦ Outcomes ◦ Profitability ◦ Personal development Each area provides managers with different insights about performance
Do you agree to Sureshs point of view?Ans:-yes we are agree with Suresh’s point of view because there is need toredefine the performance evaluation method . Ineffective performanceappraisal tends to become a time-consuming and unpleasant activity for the sales manager as well as the sales personnel. The purpose of conducting performance evaluation is to crosscheck whether the sales force activitiesare in alignment with organizational objectives. But in case of KKN India ltd.They consider only sales result with market sales growth and not focus onIndividual performance evaluation .And Suresh wants to consider hissalespeoples individual performance evaluation papers and a maximumpossible increment to them.According to him It is difficult for the sales manager to predict the influence ofthe external factors on the performance of the sales force. To measureperformance, it is necessary for the sales manager to put in place aperformance evaluation procedure.
What improvement would you suggest to the existing system of performanceevaluation of the salespeople of this company?Ans:-The performance standard should The sales manager must ensure that the performance standards are set to compare and evaluate the actual performance of the sales force.The standards vary from industry to industry and are different for different jobprofiles. Performance standards come under quantitative standards, qualitative standards, time-based standards, or cost-based standards. All the sales force activities can be segregated into one of these four categories and compared with the base standard. Many methods of performance evaluation have been developed over the years. Yet, there is no single method that can be considered ideal for all organizations.Some of the commonly used methods are essays, rating scales,rankings, management by objectives and behaviorally-anchored rating scales. Several modern methods like critical incident appraisal, work-standards method, family of measures, etc., have been developed to suit variations and other requirements.