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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (1) 11 Evaluating the Performance of Salespeople Module 11 Evaluating the Performance of Salespeople
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (2) 11 Purposes of Salesperson Performance Evaluations 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 salespeople in the future. To advise salespeople of work expectations. To motivate salespeople. To help salespeople set career goals. To improve salesperson performance.
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (3) 11 Salesperson Performance Evaluation Approaches Most occur annually. 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. Territory data is used to establish objectives, which are assigned different weights. Multiple sources of information are used. Immediate supervisor performs the evaluation. Written review and personal discussion of the review are part of the process used by most firms. General conclusions regarding evaluations:
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (4) 11 Salesperson Performance Evaluation 360-Degree Feedback Salesperson Performance Evaluation 360-Degree Feedback (Exhibit 11.1) Salesperson Evaluation Sales Manager Team Members Oneself External Customers Evaluation Internal Customers
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (5) 11 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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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (6) 11 Key Issues in Evaluating and Controlling Salesperson Performance Key Issues in Evaluating and Controlling Salesperson Performance Perspectives on Salesperson Performance Evaluation (Exhibit 11.2) Outcome-based Perspective Little monitoring of people Little managerial direction of salespeople Straightforward objectives measures of results Behavior-based Perspective Considerable monitoring of salespeople High levels of managerial direction of salespeople Subjective measures of salesperson characteristics, activities, and strategies
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (7) 11 Key Issues in Evaluating and Controlling Salesperson Performance Key Issues in Evaluating and Controlling Salesperson Performance Dimensions of Salesperson Performance Evaluation (Figure 11.1) Behavioral Salesperson Performance Professional Development Results Profitability
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (8) 11 Key Issues in Evaluating and Controlling Salesperson Performance Key Issues in Evaluating and Controlling Salesperson Performance Criteria for Performance Evaluation Behavioral Criteria –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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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (9) 11 Key Issues in Evaluating and Controlling Salesperson Performance Key Issues in Evaluating and Controlling Salesperson Performance 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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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (10) 11 Key Issues in Evaluating and Controlling Salesperson Performance Key Issues in Evaluating and Controlling Salesperson Performance Criteria for Performance Evaluation Results Criteria –Examine results achieved. –Sales(Volume/Quota), Accounts (Lost/New), Market Share
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (11) 11 Results Criteria Results Criteria Sales Quota A reasonable sales objective for a territory, district, region, or zone.
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (12) 11 Market Response Framework Market Response Framework (Figure 11.2) Environmental Factors Factors Control Unit Attractiveness Business Position Organizational Factors Factors Marketing Effort Sales Management Effort Market Market Response Response Behavior Behavior Effort Quality Salesperson Salesperson Factors FactorsCharacteristics Role Perceptions Aptitude Skill Level Motivation Planning and Control Unit Control Unit
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (13) 11 Elements Important in Assigning Sales Quotas 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 Rep’s 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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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (14) 11 Key Issues in Evaluating and Controlling Salesperson Performance Key Issues in Evaluating and Controlling Salesperson Performance Criteria for Performance Evaluation Profitability Criteria –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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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (15) 11 Key Issues in Evaluating and Controlling Salesperson Performance Key Issues in Evaluating and Controlling Salesperson Performance Performance Evaluation Methods Characteristics any method should include: –Job Relatedness –Reliability –Validity –Standardization –Practicality –Comparability –Discriminability –Usefulness
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (16) 11 Performance Evaluation Methods Performance Evaluation Methods Graphic Rating/Checklist Methods Consist of approaches where salespeople are evaluated using some type of performance evaluation form
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (17) 11 Performance Evaluation Methods 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
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (18) 11 Performance Evaluation Methods Performance Evaluation Methods Objective-Setting Methods Management by Objectives (MBO) –Mutual setting of well-defined and measurable goals with in a specified time period –Managing activities within the specified time period toward the accomplishment of the stated objectives Evaluate performance against objectives –Exhibit 11.14 - Quota Evaluation Example
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (19) 11 Performance Evaluation Methods BARS) Performance Evaluation Methods Behaviorally Anchored Rating Scales (BARS) (Figure 11.3)
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (20) 11 Performance Evaluation Bias
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (21) 11 Evaluating Team Performance
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (22) 11 Framework for Using Performance Information Framework for Using Performance Information (Figure 11.4) Determine Sales Management Actions to Eliminate Causes of Future Problems and to Solve Existing Problems Evaluate Salespeople against Relevant Performance Criteria Compare Salesperson Evaluations to Identify Problem Area Investigate Problem Areas to Identify Causes of Performance Problems
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1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (23) 11 Salesperson Job Satisfaction Measuring Salesperson Job Satisfaction –Revised INDSALES Scale Job, Co-Workers, Supervision, Company Policy and Support, Pay, Promotion, Customers Using Job Satisfaction Information
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