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  1. 1. Module TenEvaluating the Performance of Salespeople
  2. 2. 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
  3. 3. 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
  4. 4. Salesperson Performance Evaluation ApproachesGeneral 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
  5. 5. Salesperson Performance Evaluation ApproachesGeneral 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
  6. 6. 360-Degree Feedback System• Evaluated by multiple raters Sales Manager• Salesperson’s value to Evaluation the organization and customers• Considerations – Quality data Salesperson – Confidentiality – Useful – Not used exclusively
  7. 7. Perspectives on Salesperson Performance EvaluationOutcome-Based Behavior-Based• Little monitoring of • Considerable people monitoring of salespeople• Little managerial • High levels of direction of managerial direction salespeople of salespeople• Straightforward • Subjective measures objectives measures of salesperson of results characteristics, activities, and strategies
  8. 8. Dimensions of Salesperson Performance Evaluation Behavioral Results Salesperson PerformanceProfessional ProfitabilityDevelopment
  9. 9. Criteria for Performance EvaluationBehavior:• Activities performed• Activities to promote long-term customer satisfaction• Sales calls• Customer complaints• Required reports submitted• Training meetings• Letters and calls to prospects
  10. 10. Criteria for Performance EvaluationProfessional Development:• Assess improvements in certain characteristics: traits, skills, knowledge – Attitude – Product knowledge – Initiative and assertiveness – Communication skills – Ethical behavior
  11. 11. Criteria for Performance EvaluationResults:• Measured objectively: sales, market share• Possible negative effects• Sales quotas
  12. 12. 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
  13. 13. Criteria for Performance Evaluation Profitability: • Specific products sold • Prices negotiated • Expenses incurred • Criteria
  14. 14. Performance Evaluation Methods: Characteristics any method should include • Job Relatedness • Reliability • Validity • Standardization • Practicality • Comparability • Discriminability • Usefulness
  15. 15. 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
  16. 16. 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
  17. 17. Performance Evaluation Methods: Objective-Setting MethodsManagement 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.
  18. 18. 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
  19. 19. BARS Scale: Cooperative Relations with Other Sales Team Members Behavioral Anchor Statements Could be expected… …to cooperate when aid is requested by other team members.10 …to go out of her/his way to help the team achieve its goals.98 …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 field76 …to contribute half-heartedly to the team effort to accomplish goals54 …not to care much about the team and its members3 …to antagonize members of the team and pull against the team goals210
  20. 20. Performance Evaluation Bias• Occurs when a manager’s 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
  21. 21. Framework for Using Performance InformationEvaluate Salespeople against Relevant Performance Criteria Identify Problems Isolate Causes Determine Solutions
  22. 22. 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)
  23. 23. 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