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Controlling The Sales Force

The document discusses procedures for evaluating and controlling sales force performance. It begins by explaining why evaluating salespeople is important, such as to link compensation to performance and identify training needs. It then outlines the key steps in the evaluation process, including deciding performance criteria, establishing standards, measuring actual performance against standards, and reviewing evaluations with salespeople. Finally, it discusses deciding on management actions based on evaluation results to improve individual and organizational performance. The overall process provides a framework for objectively assessing salesperson performance through both quantitative and qualitative metrics to enhance performance.

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RajKam
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Download as PPT, PDF, TXT or read online on Scribd
337 views

Controlling The Sales Force

The document discusses procedures for evaluating and controlling sales force performance. It begins by explaining why evaluating salespeople is important, such as to link compensation to performance and identify training needs. It then outlines the key steps in the evaluation process, including deciding performance criteria, establishing standards, measuring actual performance against standards, and reviewing evaluations with salespeople. Finally, it discusses deciding on management actions based on evaluation results to improve individual and organizational performance. The overall process provides a framework for objectively assessing salesperson performance through both quantitative and qualitative metrics to enhance performance.

Uploaded by

RajKam
Copyright
© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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CONTROLLING THE SALES

FORCE

EVALUATING AND CONTROLLING THE


PERFORMANCE OF SALES PEOPLE

The success or failure of an organization


depends on how efficiently the sales
performance is managed. Therefore,
improving performance appraisals should be
among the highest priorities of contemporary
sales executives and managers.
Performance evaluation is defined as the
degree to which employee behaviour and the
result of his behaviour induce organizational
goals, relative to an explicit standard of
success.

WHY EVALUATING SALESPEOPLE


1. To link compensation & rewards to
performance.
2. To identify salespeople capable of promotion.
3. To identify salespeople to be retrenched.
4. To identify training and counseling needs.
5. To identify criteria for recruitment & selection.
6. To motivate salespeople.
7. To help salespeople set career goals.

PROCEDURE FOR EVALUATING AND


CONTROLLING SALES FORCE
PERFORMANCE
Fig:1.1 sales force performance evaluation and control procedure

Decide sales management actions and control


Review performance evaluation with salespersons
Compare actual performance with the standards
Establish performance standards
Decide the bases of salespeoples performance Ev.
Set policies on performance evaluation and control

SET POLICIES ON PERFORMANCE


EVALUATION AND CONTROL
At the initial stage of performance evaluation,
the company management should establish
the basic policies, which is stated as below:
1. Frequency of evaluation.
2. Who will conducts evaluation?
3. 360-degree feedback.
4. Management by objective (MBO).
5. Different sources of information:

sales report, call


reports, expense reports, new-business reports, lost business reports,
economic condition reports, etc.

DECIDE THE BASES OF SALESPEOPLES


PERFORMANCE EVALUATION
Quantitative
result/output
criteria/bases

Quantitative
behavioural/activity
criteria/bases

Qualitative
behavioural/activity
criteria/bases

sales volume
-in value
-in units
-previous years sales
-by products & customer

Customer calls
-no. of customer calls
-no. of calls per day
-no. of calls per customer

Accounts (customer)
-no. of new accounts
-no. of lost accounts

Non-selling Activities
-no. of reports sent
-no. of days worked
-selling & non-selling time
-complaints
-dealer meetings held
-overdue payments collected

Direct selling expense


-As a %age of sales
-As a %age of quota

Orders

groups margin by
products, customer groups

Personal effort/skills
-communication skills
-selling skills
-team player
-time mgt. & planning ability
Knowledge
-product
-pricing
-competition & customer
-company policies

Customer relation
Appearance & health

Personality & attitudes


-cooperation
-punctuality
-enthusiasm, initiative &
resourcefulness

ESTABLISH PERFORMANCE STANDARDS

Performance standards are in the form of sales


quotas, sales objectives, sales goals or even
sales target.
It is easy to set performance standards for
quantitative criteria. However, performance
standards for qualitative behavioural criteria is
difficult.
Therefore, sales manager should ensure for
fair and reasonable performance standards,
not too much high and vice-versa.

COMPARE ACTUAL PERFORMANCE


WITH STANDARDS
There are different methods for measuring the actual
performance of salespeople in contrast to established
standards.
1. Graphic rating scales (GRS):
It is useful in evaluating salespeople qualitative
behavioural or efforts related criteria. Fig: 1.2
The merits of GRS shows easy comparability, job
relatedness, practicality and standardization.
Drawbacks: not easy to detect differences adequately
in performance of individual salespeople or among the
performances on different criteria for the same
salesperson..

For example: some time sales managers are lenient in


their evaluation, and may give all salespeople ratings
around the average or around the higher level.
Some managers go for Halo Effect means evaluation on
one criterion affect their ratings on other criteria.
2. Ranking:
this method ranks all salespeople according to the
relative performance on a performance criterion.

Fig:1.2, Graphic rating scales

Selling skills

Excellent

6__5__4__3__2__1

Poor

Team player

Superior

6__5__4__3__2__1

Inferior

Product
knowledge

Excellent

6__5__4__3__2__1

Poor

Positive

6__5__4__3__2__1

Negative

Excellent

6__5__4__3__2__1

Poor

superior

6__5__4__3__2__1

inferior

Attitude
Customer
relations
Time
management

3. Behavioural anchored rating scales: (BARS)


This method links salespersons behaviour with
specific results. The main benefits of this method is
on job relatedness, as a given selling situation
relates directly to the job of salespeople. It also
provide direction for salesperson improvement.
This method is a repetitive process and allows
different sales managers to arrive at more
consistent and objective evaluations, since the
rating scales have similar interpretations.

Performance result: Cooperation with other Sales Team


Members

Performance categories &


Definition of the dimension

Behavioural Anchor statements


10

Very High: this indicates a strong


willingness to cooperate with other
members of the sales team

8
7

Moderate: this indicates an average


amount of cooperation & willingness
to be part of the sales team

Could be expected to cooperate when help or


assistance is requested by other team
members.
Could be expected to go out of his or her way
to help the team achieve its goals.

Could be expected to occasionally support


the team members with field sales problem.

5
4

Could be expected to contribute halfheartedly to the team effort to achieve goals.

3
Very low: this indicates an opposition
& non-team oriented effort, which
hurts group performance

Could be expected not to care much about


the team & its members.

1
Could be expected to oppose members of the
team & act against the team goals.
0

4. Management by objectives
As a evaluation method, MBO includes
series of steps:
1. Sales managers & sales person discuss and
set specific objectives or sales quotas for the
specific period of time.
2. They prepare an action plan for the
achievement of the objectives.
3. They review actual performance periodically
against the stated objectives, sales quotas,
or performance standards & take corrective
actions.

5. Descriptive statements
Under this method, sales managers are required to
write either short or detailed description of each
salespersons performance on specific criteria
(selling ability, territorial management,
job/product knowledge and customer relations),
which varies company to company.
Another method, used by some organizations,
include writing a profile about the individual
salespersons specific performance, abilities, and
potential.
This method is useful only if some form of graphic
rating scale, or when the number of salespeople to
be evaluated is less and that evaluators are well
trained.

REVIEW PERFORMANCE EVALUATION


WITH SALESPEOPLE
The sales manager should contact the salesperson and set
a time and place for the performance review meeting.
Prior the meeting, the salesperson should be asked to
review his or her job description and the past
performance, by using the companys evaluation forms.
Following guidelines are useful when reviewing
performance:
1. firstly, performance criteria or bases should be
discussed.
2. Secondly, salesperson should be asked to review his or
her own performance.
3. Thirdly, sales manager should present his view on the
salespersons review performance.

4. Fourthly, mutual agreement on the


performance must be established.
5. Finally, disagreement if any, must be solved
by giving supportive reasons by sales
manager.
Just after evaluation session, sales manager
should write a letter to the salesperson
restating the performance evaluation results
and the objectives for the future period. A
copy of this letter delivered to sales
manager boss/ superior.

DECIDE SALES MANAGEMENT ACTIONS


AND CONTROL
At this stage, the sales manager
responsibilities is to use this Performance
information for improving the performance of
individual salespeople, sales teams, and the
operations of the sales organization.
Sales manager also has to identify problem
areas, find the causes of the problem and
decide sales management actions to solve the
problems.fig:1.3

Fig: 1.3. sample problems, causes and management actions

Performance
problems

Potential causes

Sales management
actions

Not meeting sales or


other results quotas

Sales or other results


quotas incorrect; poor
account coverage; too few
sales calls

Revise sales or other results


quotas; revise effort
allocation; redesign
territories; develop
motivation programs;
provide closer supervision;
increase sales force size.

Not meeting behavioural


quotas

Behavioural quotas
incorrect; too little effort;
poor quality of effort

Revise behavioural quotas;


develop motivational
programs; increase sales
force size; conduct training
program; supervision.

Not meeting professional Professional development


quotas incorrect,
development quotas

Revise professional
development quotas;
conduct training prog;
supervision; change hiring
practices.

Not meeting profitability


quotas

Revise profitability quotas;


change compensation;
devise incentive prog,
supervision, training
program.

inadequate training.

Profitability quotas
incorrect, low gross
margins; high selling
expenses

Evaluation of salespersons in service


industry: CAF COFFEE DAY
Every sales staff is evaluated on both qualitative and
quantitative grounds. Attendance is one of the main criteria
of evaluation and is closely monitored. It is the responsibility
of the Caf manger to maintain proper records of attendance
of each salesperson. Merchandise is displayed and available
for sales in the outlet. Although a salesperson is not given
any specific target of sales, the company has a policy of
rewarding the salesperson for highest sales achieved.
However, the main component of a sales staff evaluation is
qualitative estimate of his performance. Parameters like
number of instances where a customer asks for a particular
sales person, the cleanliness of the outfit and punctuality are
incorporated in assessment of employees performance. The
company has a policy of conducting a Mystery Customer
exercise where a person from the regional office poses as a
customer and evaluates the overall performance of the outlet
as well as a particular salesperson.

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