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Evaluating The Performance of Salespeople

The document discusses evaluating salesperson performance. It covers: 1. The purposes of salesperson evaluations which include determining compensation, identifying those for promotion/termination, and training needs. 2. Common evaluation approaches, which generally involve an annual review combining quantitative and qualitative metrics from multiple sources. 3. Key issues around outcome-based versus behavior-based perspectives and examples of behavioral, professional development, results, and profitability criteria. 4. Popular evaluation methods like 360 feedback, checklists, rankings, and management by objectives.

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Hriday Prasad
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Download as PPT, PDF, TXT or read online on Scribd
44 views20 pages

Evaluating The Performance of Salespeople

The document discusses evaluating salesperson performance. It covers: 1. The purposes of salesperson evaluations which include determining compensation, identifying those for promotion/termination, and training needs. 2. Common evaluation approaches, which generally involve an annual review combining quantitative and qualitative metrics from multiple sources. 3. Key issues around outcome-based versus behavior-based perspectives and examples of behavioral, professional development, results, and profitability criteria. 4. Popular evaluation methods like 360 feedback, checklists, rankings, and management by objectives.

Uploaded by

Hriday Prasad
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Evaluating the Performance of Salespeople

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Purposes of Salesperson Performance Evaluations


Used for many sales management purposes:
To ensure that compensation and other reward disbursements are consistent with actual salesperson performance To identify salespeople that might be promoted To identify salespeople whose employment should be terminated and to supply evidence to support the need for termination To determine the specific training and counseling needs of individual salespeople and the overall salesforce To provide information for effective human resource planning To identify criteria that can be used to recruit and select

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Salesperson Performance Evaluation Approaches


General conclusions:
Most evaluate on an annual basis Most combine input and output criteria which are evaluated using quantitative and qualitative measures When used, performance standards or quotas are set in collaboration with salespeople Multiple sources of information are used Immediate supervisor performs the evaluation Written review and personal discussion of the review are part of process used by most firms

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Key Issues in Evaluating and Controlling Salesperson Performance


Outcome-based Perspective
Focuses on objective measures of results with little monitoring or directing of salesperson behavior by sales managers

Behavior-based Perspective
Incorporates complex and often subjective assessments of salesperson characteristics and behaviors with considerable monitoring and directing of salesperson behavior by sales managers

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Key Issues in Evaluating and Controlling Salesperson Performance


(Exhibit 11.2)

Perspectives on Salesperson Performance Evaluation


Outcome-based Behavior-based Perspective Perspective Little monitoring of Considerable monitoring people of salespeople Little managerial High levels of direction of salespeople managerial direction of salespeople Straightforward objectives measures of Subjective measures of results salesperson Exhibit 11.3 - Outcome-Based versus Behavior-Based Implications characteristics,

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Key Issues in Evaluating and Controlling Salesperson Performance


(Figure 11.1)

Dimensions of Salesperson Performance Evaluation


Behavioral Results

Salesperson Performance Professional Development

Profitability

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Key Issues in Evaluating and Controlling Salesperson Performance Behavioral Criteria


(Exhibit 11.4)

Criteria for Performance Evaluation

Consists of criteria related to activities performed by individual salespeople Sales calls, customer complaints, required reports submitted, training meetings, letters and calls

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Key Issues in Evaluating and Controlling Salesperson Performance


(Exhibit 11.5)

Criteria for Performance Evaluation

Professional Development Criteria Assess improvements in certain characteristics of salespeople that are related to successful performance in the sales job Attitude, product knowledge, initiative and aggressiveness, communication skills, ethical behavior

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Key Issues in Evaluating and Controlling Salesperson Performance

Criteria for Performance Evaluation

Results Criteria
(Exhibit 11.6)

Sales(Volume/Quota), Accounts (Lost/New), Market Share

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Results Criteria
Sales Quota

A reasonable sales objective for a territory, district, region, or zone

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Elements Important in Assigning Sales Quotas


(Exhibit 11.8)

Concentration of Businesses within the Territory Geographic Size of Territory Growth of Businesses within the Territory Commitment by the Sales Manager to Assist the Sales Representative Complexity of Products Sold Sales Reps Past Sales Performance Extent of Product Line Financial Support (e.g., compensation) a Firm Provides Relationship of Product Line Amount of Clerical Support

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Key Issues in Evaluating and Controlling Salesperson Performance Profitability Criteria


(Exhibit 11.9)

Criteria for Performance Evaluation

Sales people can affect profit in two basic ways:


Salespeople have an impact on gross profits through the specific products they sell and/or through the prices they negotiate for final sale Salespeople affect net profits by the expenses they incur in generating sales
Profit (Net/Gross), Orders (Order/call), Selling Expense (Expense vs Budget)

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Key Issues in Evaluating and Controlling Salesperson Performance


Performance Evaluation Methods Characteristics any method should include:
Job Relatedness Reliability Validity Standardization Practicality (not complex) Comparability Discriminability Usefulness

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Salesperson Performance Evaluation Approaches


1. 2. 3. 4. 360 degree feedback Graphic rating/checklist Ranking Management by Objectives (MBO)

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360 degree Feedback


(Exhibit 11.1)
Sales Manager
Evaluation

Salesperson

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Performance Evaluation Methods Graphic Rating/Checklist


Methods Consist of approaches where salespeople are evaluated using some type of performance evaluation form
Exhibit 11.11 Graphic Rating/Checklist Example

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Performance Evaluation Methods

Ranking Methods Rank all salespeople according to relative performance on each performance criterion rather than evaluating them against a set of performance criteria
Exhibit 11.13 Ranking Method Example

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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


Exhibit 11.14 - Quota Evaluation Example

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Performance Evaluation Bias

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Evaluating Team Performance

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