Evaluating the Performance of Salespeople

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Evaluating the Performance of Salespeople

• Module Ten

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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

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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

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Salesperson PerformanceEvaluation 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

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Salesperson PerformanceEvaluation 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

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360-Degree Feedback System

• Evaluated by multiple raters
• Salespersons value to the organization and
  customers
• Considerations
• Quality data
• Confidentiality
• Useful
• Not used exclusively

Sales Manager
Evaluation
Team Members
Oneself
Evaluation
Evaluation
Evaluation
Evaluation
Internal Customers
External Customers
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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

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Dimensions of Salesperson Performance Evaluation
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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

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Criteria for Performance Evaluation

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

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Criteria for Performance Evaluation

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

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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

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Criteria for Performance Evaluation

• Profitability
• Specific products sold
• Prices negotiated
• Expenses incurred
• Criteria

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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 MethodsGraphic
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

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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

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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.

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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 Behavioral 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.
• 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

10 9 8 7 6 5 4 3 2 1 0
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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

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Framework for UsingPerformance Information
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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)

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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