Salesforce

Performance Appraisal
 Measuring Sales Performance
• Effectiveness
– It is result oriented and deals with whether or
not organization objectives are being achieved
or not.
• Efficiency
– It focuses on the cost and the economical use of
resources.
Sales Organization Focus Over Time
• Short Run (one year)
– Achieve sales objectives, efficiently acquire and employ
scarce human, material and financial resources, Satisfy
various organizational stakeholders (customers, top
management, employees, shareholders, governments etc.)
• Intermediate Run (two or four years)
– Create and identify new opportunities while adopting to
competitive environmental threats
• Long Run (five or more years)
– Survive in an uncertain and increasingly competitive world
 Developing a Sales Plan
1. Situation Analysis
 Identifying where the sales org. is now
2. Opportunities and Threats
 Where it should go
3. Action Programs
 How to get there
4. Performance Evaluation System
 Measuring progress toward the destination
The Sales Plan 1. Market Situation and
Competitive Env.
 Size of the market
Situation
 Shifts in cust. Buying behavior and
Analysis comp. strategy changes
 Market Share
 Strengths and Weakness
2. Product Sales Situation
 Product Type
 Sales and Distb. Data
 Markets Served
 Customer Profiles
 1. Internal
The Sales Plan
2. External
Opportunity 3. Planning assumptions and
And Constraints
Problems  Internal Company Env.
 External Market Env.
4. Sales Forecast
5. Contingency Planning
The Sales Plan 1. Strategies and Tactics
Convert sales forecasts into
resource, production, service,
Action Plan
quota and budget needs
 1. Set Standards of Performance
The Sales Plan
2. Evaluate actual performance
Performance versus planned standards
Evaluation 3. Take necessary corrective
Systems action on variances from plan
 Key Performance Factors
• Innumerable performance standards can be
established depending upon the sales
objectives and the goals.
• All standard should be
1. Relevant to job performance
2. Stable and consistent irrespective of evaluator
3. Able to discriminate between outstanding,
average and poor performance
 Quantitative Performance Measures
• Sales Quota
• Gross margin or Net profit ratios
• Sales expense ratio
• Market share
• Return of asset managed
• Call frequency ratio
• Order call ratio
• Sales call per day
• Non selling activities
Set Policies on Performance Evaluation & Control

Most companies establish basic policies. Examples are:

• Frequency of evaluation. Mostly once a year.
• Who conducts evaluation? Mainly immediate
supervisor
• Assessment techniques to be used. E.G. Management
by objectives (MBO), 360-degree feedback
• Sources of information. Sales analysis, new business
reports, lost business reports, call plans, etc
• Bases of salesforce evaluation. (next slide)
• Conducting performance review sessions with
salespeople
 Decide Bases for Salespersons’ Performance Evaluation

• A firm should decide which of the following bases / criteria it would use: (1)
result / outcome based, (2) efforts / behavioural based, or (3) both results &
efforts based
• A company selects performance bases or criteria from a list of alternatives, some
of them shown below:

Quantitative results / Quantitative efforts / Qualitative efforts /

outcome bases / criteria behavioural bases / criteria behavioural bases / criteria
• Sales volume • Customer calls • Personal skills
• In value / units  No. of calls per day  Selling skills
•Percentage of quota  No. of calls per  Planning ability
• by products & customer  Team player
segments • Non-selling activities • Personality & Attitudes
• Accounts / customers  overdue payments  Cooperation
 New accounts nos. collected  Enthusiasm
 Lost accounts nos.  No. of reports sent
 Qualitative Performance Measures
• Sales related activities
– Scheduling, routing, time mgmt., new product idea, competition
tracking, use of promotional material
• Customer Relations
– Report preparation and timely submission
• Selling Skills
– Product and Customer knowledge, execution of selling technique,
communication skills
• Personal Characteristics
– Cooperation, motivation, enthusiasm, appearance, patience,
punctuality, initiative, resourceful, health, ethical and moral
behaviour
 Performance Evaluation
Monitoring System (PEMS)
1) Provide feedback to each sales person on
individual job performance

2) Help salesforce modify and change their

behaviour toward more effective work habits

3) Provide information to the sales managers on

which to base to decisions on promotion, transfer
and compensation of salespeople
 Stages of PEMS
1) Performance Planning
 Lays out objectives and plan for achieving the sales
2) Performance Appraisal
 A day-by-day, mini evaluations on specific
performances
3) Performance Review
 A periodic summing up on these daily
appraisals so that the salesperson can see
where he or she stands
 Types of Performance Reviews
• Descriptive statements
• Graphic Rating Scales
– Semantic Differential Scales
– Likert-Type Scales
Behaviorally Anchored Rating Scales
• It measures key performance behaviors that
the individual salesperson can control
 Sales Audit
• Sales audit consists of
several relatively
independent components
that permit a
comprehensive evaluation
of selling organization and
efforts according to the
priorities of the sales
manager
• Sales Environment audit
• Sales goals and objectives
audit
• Sales policies audit
• Sales strategies and tactics
audit
• Sales organization audit
• Sales productivity audit
Designing Behaviorally Anchored Rating
Scales
1) Identify Critical Incidents
2) Refine critical incidents into performance
dimensions
3) Rate the effectiveness of described
behaviors
4) Select a set of incidents as behavioral
anchors for performance dimensions