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Chapter 10:

Evaluating the Performance of Salespeople

Ingram LaForge Avila

Schwepker Jr. Williams

Sales Management:

Analysis and Decision Making

Evaluating the Performance

of Salespeople

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Chapter 10:




Sales Management:


Learning Objectives

1. Discuss the different purposes of salespersonperformance evaluations.

2. Differentiate between an outcome-based and abehavior-based perspective for evaluating andcontrolling salesperson performance.

3. Describe the different types of criteria necessary for

comprehensive evaluations of salespersonperformance.

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Chapter 10:




Sales Management:


Learning Objectives

4. Compare the advantages and disadvantages ofdifferent methods of salesperson performanceevaluations.

5. Explain how salesperson performance informationcan be used to identify problems, determine theircauses, and suggests sales management actions tosolve them.

6. Discuss the measurement Importance of

salesperson job satisfaction.

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Chapter 10:




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Purposes of

Salesperson Performance Evaluations

1. To ensure that compensation and other reward

disbursements are consistent with actual

salesperson performance.

2. To identify salespeople that might be promoted.

3. To identify salespeople whose employment

should be terminated and to supply

evidence to support the need fortermination.

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Chapter 10:




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Purposes of


4. To determine the specific training and

counseling needs of individual salespeople and

the overall salesforce.

5. To provide information for effective humanresource planning.

6. To identify criteria that can be used to recruit

and select salespeople in the future.

7. To advise salespeople of work

expectations.

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Chapter 10:




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Purposes of


8. To motivate salespeople.

9. To help salespeople set career goals.

10. To relate salesperson performance to salesorganization goals.

11. To enhance communications between

salesperson and sales manager.

12. To improve salesperson

performance.

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Chapter 10:




Sales Management:


Salesperson Performance

Evaluation Approaches

1. Most evaluate on an annual basis.

2. Most combine input and output criteria which are

evaluated using quantitative and qualitativemeasures.

3. When used, performance standards or quotas are

set in collaboration with salespeople.

4. Many assign weights to different

objectives and incorporate

territory data.

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Chapter 10:




Sales Management:


Salesperson Performance

Evaluation Approaches

5. Most use multiple sources of information.

6. Most are conducted by the field sales manager

who supervises the salesperson.

7. Most provide a written copy of the review and

personal discussion.

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Chapter 10:




Sales Management:


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 salespersonbehavior by sales managers.

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Chapter 10:




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Perspectives on Salesperson

Performance Evaluation

Little monitoring of people

Little managerial direction of salespeople

Straightforward objectives measures of results

Outcome-Based

Considerable monitoring of salespeople

High levels of managerial direction of salespeople

Subjective measures of salesperson characteristics,activities, and strategies

Behavior-Based

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Chapter 10:




Sales Management:


Dimensions of Salesperson

Performance Evaluation

Behavioral

Professional

Development

Results

Profitability

Salesperson

Performance

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Chapter 10:




Sales Management:


Criteria for Performance Evaluation

Consists of criteria related to activities performed by individualsalespeople, including:

Sales calls

Customer Complaints

Required Reports Submitted

Training Meetings

Letters and Calls

Behavior

Should not only address

activities related to short-term

sales generation but should also

include non-selling activities

needed to ensure long-term

customer satisfaction.

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Assess improvements in certain characteristics ofsalespeople that are related to successful performancein the sales job

Characteristics include - Attitude, product knowledge,initiative and aggressiveness, communication skills,ethical behavior

Professional Development:

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Salespeople measured objectively based on results such assales, market share, and accounts

A sales quota represents a reasonable sales objective for aterritory, district, region, or zone

Some research shows that rewards for achieving resultshave a negative effect on performance and satisfaction

Results

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Sales Management:


Elements Important in

Assigning Sales Quotas

Concentration of businesses within the territory

Commitment by the sales manager to assist the

sales representative Growth of businesses within the

territory

Geographic size of the territory

Complexity of products sold

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Chapter 10:




Sales Management:


Elements Important in

Assigning Sales Quotas

Sales representatives past sales performance

Extent of product line

Financial support (e.g., compensation) a firmprovides

Relationship of product line

Amount of clerical support

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Salespeople have an impact on gross profits through

the specific products they sell and/or through theprices they negotiate for final sale.

Salespeople affect net profits by the expenses theyincur in generating sales.

Criteria Examples

Net profit dollars

Gross margin per sale Return on investment

Number of orders secured

Selling expenses versus budget

Profitability:

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Performance Evaluation Methods

Job Relatedness

Reliability

Validity

Standardization

Practicality

Comparability

Discriminability Usefulness

Characteristics any method should include:

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Salespeople are evaluated using some type ofperformance evaluation form

Especially useful in evaluating behavioral andprofessional development criteria

May be filled out by customers

Disadvantage is providing evaluations thatdiscriminate sufficiently

Graphic Rating/Checklist Methods

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Chapter 10:




Sales Management:



Rank all salespeople according to relativeperformance on each performance criterion

These methods force discrimination as to theperformance of individual salespeople

May be complex

Rankings only reveal relative performanceevaluation

Ranking Methods

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Chapter 10:




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Management By Objectives (MBO)

Mutual setting of well-defined and measurable goalswithin a specified time period.

Managing activities within the specified time periodtoward the accomplishment of the stated objectives.

Appraisal of performance against objectives.

Objective-Setting Methods

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Chapter 10:




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Links behaviors to specific

results

Salespeople are used to

develop performance results

and critical behaviors

Positive feedback about

behaviors may be moreaffective than positive output

feedback

Behaviorally Anchored Rating Scales (BARS)

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Chapter 10:




Sales Management:


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

Outcomes (i.e., ends justifies

the means)

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Chapter 10:




Sales Management:


Framework for Using

Performance Information

Evaluate Salespeople against RelevantPerformance Criteria

Compare Salesperson Evaluations toIdentify Problem Area

Investigate Problem Areas to IdentifyCauses of Performance Problems

Determine Sales Management Actions toEliminate Causes of Future Problems andto Solve Existing Problems

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Chapter 10: Ingram LaForge AvilaSales Management:

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).

INDSALES may be used to measure

job satisfaction.

Results may identify areas wheremanager may intervene to improve

job satisfaction.

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10.Ingram SM8 Ch 10