Sales Management 15 Performance Analysis

Purposes of Salesperson Performance Evaluations I 1.To ensure that compensation and other reward disbursements are _________with actual salesperson performance 2.To identify salespeople that might be _________ 3.To identify salespeople whose employment should be _________and to supply evidence to support the need for _________

Purposes of Salesperson Performance Evaluations II 4.To determine the specific _________ and _________ needs of individual salespeople and the overall sales force 5.To provide information for effective _________ _________ planning 6.To identify _________ that can be used to recruit and select salespeople in the future

Purposes of Salesperson Performance Evaluations III 7.To advise salespeople of work expectations 8.To _________ salespeople 9.To help salespeople set _________ _________ 10.To improve salesperson _________

Salesperson Performance Evaluation Approaches I 1.Most evaluate on an _________ basis 2.Most combine input and output criteria which are evaluated using quantitative and qualitative measures 3.When used, performance standards or quotas are set in collaboration with salespeople 4.Many assign weights to different objectives and incorporate territory data. General conclusions:

Salesperson Performance Evaluation Approaches II 5.Most use multiple sources of information 6.Most are conducted by the _________ _________ _________ who supervises the salesperson 7.Most provide a written copy of the review and personal discussion General conclusions:

Salesperson 360-Degree Feedback System Salesperson is evaluated by multiple raters Helps salespeople better understand their ability to add value to their organization and their customers Internal Customers EvaluationEvaluation External Customers EvaluationEvaluation Oneself EvaluationEvaluation Sales ManagerEvaluationEvaluation Team Members EvaluationEvaluation

Type of Measurement Objective –Statistically-based –Use internal data Subjective –Personal evaluations –Usually sales manager

Objective Measures I Common _________ Factors –Orders #, Avg. size, # cancelled –Accounts # active, # new, # lost, # overdue, # prospective This data is in computer records Measures _________

Objective Measures II Common _________ Factors –Calls: # planned, made, unplanned –Time: Days worked, calls/day, % time selling –Expenses: Total, by type, % sales, % quota –Non-selling Activities: Letters/calls to prospects, # formal proposals, displays built, # meetings, # missionary calls, # service calls, overdue accts collected This data is in salespeople’s records Measures _________

Objective Measures III Ratios are a quick and dirty way to judge salespeople performance Common Ratios –Expense –Account development/service –Call activity/productivity

Subjective Measures I Focus is on how well salespeople do their job vs. focus of objective measures, what they do. Qualitative vs. Quantitative. More difficult to measure qualitative (how well) rather than quantitative (how much). Qualitative measures tend to be inconsistent and plagued with biases because they rely on human judgment.

Subjective Measures II To force some consistency in judgment, and eliminate bias, salespeople are judged along multiple attributes using a rating scale. Five attributes rated: –_________ _________

Sales Results Volume performance Sales to new accounts Selling the full product line

Job Knowledge Product knowledge Pricing Company policies Competitors

Territory Management Planning activities and calls Controlling expenses Reports and records

Customer/Company Relations Solid, professional relationship with customers Working well with colleagues Good company citizen

Personal Characteristics _________ (also drive and ambition) _________ _________ (yes, it’s important) _________ _________ (getting things done)

Merit Rating Forms: Common Problems Lack of an _________ focus _________ personality traits _________ effect _________ or _________ _________ tendency _________ bias Organizational _________ influence

Lack of an Outcome Focus Need goals, not just attribute ratings –Accomplishment One type is BARS (behavioral anchored rating scale) –Critical Success Factors Focus on behaviors that are effective in achieving goals –Key attributes

BARS

Ill-defined Personality Traits Are they related to performance? E.g., initiative, aggressiveness, goal- oriented, resourcefulness These are intuitively appealing, but do they lead to good performance? Sometimes personality traits (e.g. aggressiveness) can be counter-productive.

Halo Effect Rating on one attribute tends to influence the rating on other attributes Important characteristics influence others Both positive and negative effects Managers have different ideas of what is important Even then, they will change over time

Leniency or Harshness Managers are not the same in their evaluations (same with professors) Same performance will be judged differently by different managers Need consistent expectations and evaluations of performance throughout the organization

Central Tendency Sometimes managers (like people) don’t like the extremes on scales Given 1-4, most people pick 3 Not very helpful scores Can be a problem when used for raises, promotions, terminations, etc.

Interpersonal Bias Our perceptions of people and their behavior are influenced by whether we like the person or not Salespeople can use their skills of personal influence to affect the scores Impression Management –E.g., Eddie Haskell 

Organizational Uses Influence Managers may be more lenient (or not) if the evaluations are to be used for raises or promotions If meant for employee development, then they focus on weaknesses in order to have salespeople improve

Protections Against Biases Instructions on forms Descriptive categories not words Request objectivity Use Objective Measures