Purposes of Salesperson Performance Evaluations
1. To
ensure
that
disbursements are
performance
compensation
and
other
reward
consistent with actual salesperson
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 for
termination
4. To determine the specific training and counseling needs of
individual salespeople and the overall sales force
5. To provide information for effective human resource
planning
6. To identify criteria that can be used to recruit and select
salespeople in the future
7. To advise salespeople of work expectations
8. To motivate salespeople
9. To help salespeople set career goals
10.
To relate salesperson performance to sales
organization goals.
11.
To enhance communications between salesperson and
sales manager.
12.
To improve salesperson performance
Salesperson Performance Evaluation Approaches
1. Most evaluate on an annual 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.
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
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
Dimensions of Salesperson Performance Evaluation
Behavioral
Professional Development
Profitability
Results
Criteria for Performance Evaluation
Behavior: Consists of criteria related to activities performed by
individual salespeople
Sales calls,
customer complaints,
required reports submitted,
training meetings,
letters and calls
Professional Development:
Assess improvements in certain characteristics of
salespeople that are related to successful performance in
the sales job
Characteristics include - Attitude, product knowledge,
initiative and aggressiveness, communication skills, ethical
behavior
Results:
Salespeople measured objectively based on results such as
sales, market share, and accounts
A sales quota represents a reasonable sales objective for a
territory, district, region, or zone
Some research shows that rewards for achieving results
have a negative effect on performance and satisfaction
Elements Important in Assigning Sales Quotas
Concentration of businesses within the territory
Geographic size of the territory
Growth of businesses within the territory
Commitment by the sales manager to assist the sales
representative
Complexity of products sold
Sales representatives past sales performance
Extent of product line
Financial support (e.g., compensation) a firm provides
Relationship of product line
Amount of clerical support
Criteria for Performance Evaluation
Profitability:
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.
Criteria Examples
Net profit dollars
Gross margin per sale
Return on investment
Number of orders secured
Selling expenses versus budget
Performance Evaluation Methods: Characteristics any method
should include
Job Relatedness
Reliability
Validity
Standardization
Practicality
Comparability
Discriminability
Usefulness
Performance Evaluation Methods Graphic Rating/Checklist
Methods
Salespeople are evaluated using some type of performance
evaluation form
Especially useful in evaluating behavioral and professional
development criteria
May be filled out by customers
Disadvantage is providing evaluations that discriminate
sufficiently
Rank all salespeople according to relative performance on
each performance criterion
These methods force discrimination as to the performance
of individual salespeople
May be complex
Rankings only reveal relative performance evaluation
Management By Objectives (MBO)
1. Mutual setting of well-defined and measurable goals within
a specified time period.
2. Managing activities within the specified time period toward
the accomplishment of the stated objectives.
3. Appraisal of performance against objectives.
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 where manager may intervene to
improve job satisfaction
