Evaluating The Performance of Salespeople: Module Ten

Evaluating the Performance
of Salespeople
Module Ten
Ingram LaForge Avila
Schwepker Jr. Williams
Professional Selling:
A Trust-Based Approach
Module 10:
Evaluating the Performance of Salespeople
Learning Objectives
1. Discuss the different purposes of salesperson
performance evaluations.
2. Differentiate between an outcome-based and a
behavior-based perspective for evaluating and
controlling salesperson performance.
3. Describe the different types of criteria necessary
for comprehensive evaluations of salesperson
performance.
Module 10:
Learning Objectives
4. Compare the advantages and disadvantages of
different methods of salesperson performance
evaluations.
5. Explain how salesperson performance
information can be used to identify problems,
determine their causes, and suggests sales
management actions to solve them.
6. Discuss the measurement Importance of
salesperson job satisfaction.
Module 10:
Setting the Stage
1. What were the primary changes Prince
made to the performance evaluation
process?
2. How did the changes impact City
Wholesales sales force?
Evaluating Salesperson
Performance at City Wholesale
Module 10:
Purposes of Salesperson
Performance Evaluations
1. To ensure that compensation and other
reward disbursements are consistent with
actual salesperson performance
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
Module 10:
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
Module 10:
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
Module 10:
Salesperson Performance
Evaluation Approaches: Conclusions
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.
Module 10:
Salesperson Performance
Evaluation Approaches: Conclusions
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
Module 10:
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
Sales Manager
E
v
a
l
u
a
t
i
o
n

Module 10:
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
Module 10:
Perspectives on Salesperson
Performance Evaluation
Outcome-Based

Little monitoring of
people
Little managerial
direction of salespeople
Straightforward
objectives measures of
results
Behavior-Based

Considerable monitoring
of salespeople
High levels of managerial
direction of salespeople
Subjective measures of
salesperson
characteristics, activities,
and strategies
Module 10:
Dimensions of Salesperson
Performance Evaluation
Behavioral
Professional
Development
Results
Profitability
Salesperson
Performance
Module 10:
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

Should not only address activities related to short-
term sales generation but should also include non-
selling activities needed to ensure long-term
customer satisfaction.
Module 10:
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

Module 10:
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

Module 10:
Market Response Framework
Salesperson
Factors
Characteristics
Role
Perceptions
Aptitude
Skill Level
Motivation
Behavior
Effort
Quality
Planning
and Control
Unit
Behavior
Effort
Quality
Environmental
Factors
Control Unit
Attractiveness
Business
Position
Organizational Factors
Marketing Effort
Sales Management Effort
Module 10:
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
Module 10:
Elements Important in
Assigning Sales Quotas
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
Module 10:
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
Module 10:
Performance Evaluation Methods:
Characteristics any method should include
Job Relatedness
Reliability
Validity
Standardization
Practicality
Comparability
Discriminability
Usefulness
Module 10:
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
Module 10:
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
Module 10:
Objective-Setting Methods
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.
Module 10:
Performance Evaluation Methods
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
Module 10:
Performance Evaluation Bias
Occurs when a managers evaluation of a
salesperson is affected by considerations
other than the specified criteria
Common sources of bias:
Personal relationships
Perceived difficulty of territory
Outcomes (i.e., ends justifies
the means)

Module 10:
Evaluating Team Performance
Consider the criteria on which members will
be evaluated and the methods used to
evaluate performance
Establish a link between team performance
and positive outcomes to promote individual
and team effort
May be beneficial to allow team to help
develop goals and evaluation criteria
Module 10:
Framework for Using
Performance Information
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
Module 10:
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

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