Evaluating a Salesperson Performance

Purposes of Salesperson Performance Evaluations

1. 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

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Purposes of Salesperson Performance Evaluations

4. 5. 5. To determine the specific training and counseling needs of individual salespeople and the overall sales force To motivate salespeople 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

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Salesperson Performance Evaluation Approaches

1. 2. Most evaluate on an annual basis 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

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Many assign weights to different objectives and incorporate territory data.

Salesperson Performance Evaluation Approaches

5. 6. Most use multiple sources of information Most are conducted by the field sales manager who supervises the salesperson Most provide a written copy of the review and personal discussion

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360-Degree Feedback System

Sales Manager

Salesperson is evaluated by multiple raters Helps salespeople better understand their ability to add value to their organization and their customers

Salesperson

Evaluation

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

Criteria for Performance Evaluation

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

Criteria for Performance Evaluation

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

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

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

Ranking Methods
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

Objective-Setting Methods
Management By Objectives (MBO)
1. Mutual setting of well-defined and measurable goals within a specified time period.

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Managing activities within the specified time period toward the accomplishment of the stated objectives.
Appraisal of performance against objectives.

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Behaviorally Anchored Rating Scales (BARS)

Links behaviors to specific results Salespeople are used to develop performance results and critical behaviors Positive feedback about behaviors may be more affective than positive output feedback