m11p - evaluating the performance of salespeople
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Module 11
Evaluating the PerformanceEvaluating the Performance
of Salespeopleof Salespeople
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Purposes of SalespersonPurposes of Salesperson
Performance EvaluationsPerformance Evaluations !o ensure that co"pensation and other re#ard disburse"ents are consistent #ith
actual salesperson per$or"ance.
!o identi$y salespeople that "ight be pro"oted.
!o identi$y salespeople #hose e"ploy"ent should be ter"inated and to supplyevidence to support the need $or ter"ination.
!o deter"ine the speci$ic training and counseling needs o$ individual salespeople
and the overall sales$orce.
!o provide in$or"ation $or e$$ective hu"an resource planning
!o identi$y criteria that can be used to recruit and select salespeople in the $uture. !o advise salespeople o$ #or% e&pectations.
!o "otivate salespeople.
!o help salespeople set career goals.
!o i"prove salesperson per$or"ance.
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Salesperson PerformanceSalesperson Performance
Evaluation ApproachesEvaluation Approaches
ost occur annually.
ost co"bine input and output criteria #hich are evaluated using
uantitative and ualitative "easures.
*hen used, per$or"ance standards or uotas are set in
collaboration #ith salespeople.
!erritory data is used to establish ob+ectives, #hich are assigned
di$$erent #eights. ultiple sources o$ in$or"ation are used.
I""ediate supervisor per$or"s the evaluation.
*ritten revie# and personal discussion o$ the revie# are part o$
the process used by "ost $ir"s.
eneral conclusions regarding evaluations-
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Salesperson Performance EvaluationSalesperson Performance Evaluation
360-Degree Feedac!360-Degree Feedac!(/&hibit 11.1)
Salesperson
Evalu
ation
Evalu
ation
Evaluation
Evalu
ation
Sales Manager
"eamM
emers
#neself
E$ternal%ustomers
Eva
luatio
n
&nte
rnal
%ustom
ers
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'e( &ssues in Evaluating and'e( &ssues in Evaluating and
%ontrolling Salesperson Performance%ontrolling Salesperson Performance
#utcome-ased Perspective
ocuses on ob+ective "easures o$ results #ith little"onitoring or directing o$ salesperson behavior by
sales "anagers
)ehavior-ased Perspective
Incorporates co"ple& and o$ten sub+ective assess"entso$ salesperson characteristics and behaviors #ith
considerable "onitoring and directing o$ salesperson
behavior by sales "anagers
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'e( &ssues in Evaluating and'e( &ssues in Evaluating and
%ontrolling Salesperson Performance%ontrolling Salesperson Performance
Perspectives on Salesperson PerformanceEvaluation(/&hibit 11.2)
#utcome-ased Perspective
4ittle "onitoring o$ people
4ittle "anagerial direction o$
salespeople
5traight$or#ard ob+ectives
"easures o$ results
)ehavior-ased Perspective
Considerable "onitoring o$
salespeople
High levels o$ "anagerial
direction o$ salespeople
5ub+ective "easures o$
salesperson characteristics,
activities, and strategies
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'e( &ssues in Evaluating and'e( &ssues in Evaluating and%ontrolling Salesperson Performance%ontrolling Salesperson Performance
Dimensions of SalespersonPerformance Evaluation
(igure 11.1)
)ehavioral
Salesperson
Performance
Professional
Development
*esults
Profitailit(
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'e( &ssues in Evaluating and'e( &ssues in Evaluating and
%ontrolling Salesperson Performance%ontrolling Salesperson Performance%riteria for Performance Evaluation
)ehavioral %riteriaConsists o$ criteria related to activities
per$or"ed by individual salespeople
5ales calls, custo"er co"plaints, reuired
reports sub"itted, training "eetings, letters and
calls
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'e( &ssues in Evaluating and'e( &ssues in Evaluating and
%ontrolling Salesperson Performance%ontrolling Salesperson Performance%riteria for Performance Evaluation
Professional Development %riteriaAssess i"prove"ents in certain characteristics
o$ salespeople that are related to success$ul
per$or"ance in the sales +ob
Attitude, product %no#ledge, initiative and
aggressiveness, co""unication s%ills, ethical
behavior
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'e( &ssues in Evaluating and'e( &ssues in Evaluating and
%ontrolling Salesperson Performance%ontrolling Salesperson Performance%riteria for Performance Evaluation
*esults %riteria/&a"ine results achieved.
5ales(9olu"e:;uota), Accounts (4ost:
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*esults %riteria*esults %riteria
Sales +uota
A reasonable sales ob+ective $or a territory,
district, region, or =one.
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Mar!et *esponse Frame,or!Mar!et *esponse Frame,or!
(igure 11.2)EnvironmentalEnvironmental
FactorsFactors%ontrol nit
Attractiveness
)usiness Position
#rgani.ational#rgani.ational
FactorsFactorsMar!eting EffortSales
Management
Effort
Mar!etMar!et
*esponse*esponse
)ehavior)ehaviorEffort+ualit(
SalespersonSalesperson
FactorsFactors
%haracteristics%haracteristics*ole PerceptionsAptitudeS!ill /evelMotivation
Planning andPlanning and
%ontrol nit%ontrol nit
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Elements &mportant inElements &mportant in
Assigning Sales +uotasAssigning Sales +uotas(/&hibit 11.7) %oncentration of )usinesses ,ithin the "erritor(
eographic Si.e of "erritor(
ro,th of )usinesses ,ithin the "erritor( %ommitment ( the Sales Manager to Assist the Sales
*epresentative
%omple$it( of Products Sold
Sales *eps Past Sales Performance
E$tent of Product /ine
Financial Support 2eg4 compensation5 a Firm Provides
*elationship of Product /ine
Amount of %lerical Support
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'e( &ssues in Evaluating and'e( &ssues in Evaluating and%ontrolling Salesperson Performance%ontrolling Salesperson Performance
%riteria for Performance Evaluation
Profitailit( %riteria
5alespeople have an i"pact on gross pro$its through thespeci$ic products they sell and:or through the prices
they negotiate $or $inal sale
5alespeople a$$ect net pro$its by the e&penses they
incur in generating sales
>ro$it (
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'e( &ssues in Evaluating and'e( &ssues in Evaluating and
%ontrolling Salesperson Performance%ontrolling Salesperson PerformancePerformance Evaluation Methods
Characteristics any "ethod should include-
ob Belatedness Beliability
9alidity
5tandardi=ation
>racticality
Co"parability
iscri"inability
Dse$ulness
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Performance Evaluation MethodsPerformance Evaluation Methods
raphic *ating%hec!list Methods
Consist o$ approaches #here salespeopleare evaluated using so"e type o$
per$or"ance evaluation $or"
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Performance Evaluation MethodsPerformance Evaluation Methods
*an!ing Methods
Ban% all salespeople according to relative
per$or"ance on each per$or"ance criterion
rather than evaluating the" against a set o$
per$or"ance criteria
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Performance Evaluation MethodsPerformance Evaluation Methods
#7ective-Setting Methods Management ( #7ectives 2M)#5
utual setting o$ #ellEde$ined and "easurable
goals #ith in a speci$ied ti"e periodanaging activities #ithin the speci$ied ti"e
period to#ard the acco"plish"ent o$ the statedob+ectives
Evaluate performance against o7ectives/&hibit 11.1 E ;uota /valuation /&a"ple
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Performance Evaluation MethodsPerformance Evaluation Methods)ehaviorall( Anchored *ating Scales 2)A*S5)A*S5
(igure 11.')
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Performance Evaluation )iasPerformance Evaluation )ias
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Evaluating "eam PerformanceEvaluating "eam Performance
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Frame,or! for singFrame,or! for sing
Performance &nformationPerformance &nformation(igure 11.)
Determine Sales Management Actions to Eliminate %auses of Future
Prolems and to Solve E$isting Prolems
Evaluate Salespeople against *elevant Performance %riteria
%ompare Salesperson Evaluations to &dentif( Prolem Area
&nvestigate Prolem Areas to &dentif( %auses of Performance Prolems
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Salesperson 8o SatisfactionSalesperson 8o Satisfaction
Measuring Salesperson 8o Satisfaction
BevisedINDSALES Scale
ob, CoE*or%ers, 5upervision, Co"pany >olicy and5upport, >ay, >ro"otion, Custo"ers
sing 8o Satisfaction &nformation