KKN India Ltd.

Sales force performance Evaluation

Presented by:-
Ketan Thakur
Nikhil mehendru
Jaykishan lauhana
 Introduction to the case:-

Regional sales manager(western region) asked for maximum annual

Increments to the general manager(sales) for the highest contributed by his
sales team.

The sales manager appreciate their performance and should be suitably

rewarded, but that does not mean salespeople from other regions are not
performing well.

Method used for evaluation is the comparison of actual sales with previous
year’s sales and the market potential was not considered when the quotas
were established.

Western region have given the maximum sales growth of 25 percent against
the total growth of 15 percent .
Performance evaluation method in KKN India Ltd.

Sales force performance evaluation in company include sales result but not the
effort of the salespeople .

No individual performance measure technique is used.

Performance evaluation method compares the actual sales with the previous
year’s sales ,and the market potential was not considered when the sales quotas
Were established.

Inconsistency in measuring performance.

 Purposes of Salesperson
Performance Evaluations I
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
 Purposes of Salesperson
Performance Evaluations II
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
The steps involved in the procedure are:
 Set policies on performance evaluation and control
 Decide bases of salespersons’ performance
evaluation
 Establish performance standards
 Compare actual performance with the standards
 Review performance evaluation with salespeople
 Decide sales management actions and control
We shall describe above steps briefly
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 sales force evaluation. (next slide)
• Conducting performance review sessions with
salespeople
BARS
 360-Degree Feedback
System
• Salesperson is Sales Manager
evaluated by

Evaluation
multiple raters
• Helps salespeople
better understand Salesperson
their ability to add
value to their
organization and
their customers
  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
 Performance standards are also called sales goals,
targets, sales quotas, sales objectives
 Performance standards for quantitative results are
related to the company’s sales volume or market
share goals
 Performance standards for efforts / behavioural
criteria are difficult to set
• For this, companies do “time and duty analysis”
or use executive judgement
 Performance standards should not be too high or
too low
 After establishing standards, salespeople must be
informed
 Salesperson’s actual performance is measured and
compared with the performance standards
 For this, sales managers use different methods or
forms:
• Graphic rating scales
• Ranking
• Behaviorally anchored rating scale (BARS)
• Management by Objectives (MBO)
• Descriptive statements
 Companies combine some of the above methods
for an effective evaluation system
 Performance review / appraisal session is conducted,
after evaluation of the salesperson’s performance
 Sales manager should first review high / good ratings,
and then review other ratings
 Both should decide objectives / goals and action plan for
future period
 After the review, sales manager should write about
performance evaluation & objectives for the future
 Guidelines for reviewing performance of salespersons
• First discuss performance standards / criteria / bases
• Ask the salesperson to review his performance
• Sales manager presents his views
• Establish mutual agreement on the performance
 Many companies combine this step with the
previous step – i.e. performance review
 During performance review meeting with
salesperson, sales manager does the following:
• Identifies the problem areas. E.G. Sales quotas not
achieved
• Finds causes. E.G. less sales calls, poor market
coverage, or superior performance of competitors
• Decides sales management actions E.G. train
salesperson, redesign territories, or review
company’s sales / marketing strategies
 If a salesperson’s performance is good, he / she
should be rewarded and recognised
 Salesperson responsibilities are diverse
 Necessitates four areas being assessed:
◦ Activities
◦ Outcomes
◦ Profitability
◦ Personal development
 Each area provides managers with different
insights about performance
Do you agree to Suresh's point of view?

Ans:-yes we are agree with Suresh’s point of view because there is need to
redefine the performance evaluation method . Ineffective performance
appraisal tends to become a time-consuming and unpleasant activity for the
sales manager as well as the sales personnel. The purpose of conducting
performance evaluation is to crosscheck whether the sales force activities
are in alignment with organizational objectives. But in case of KKN India ltd.
They consider only sales result with market sales growth and not focus on
Individual performance evaluation .And Suresh wants to consider his
salespeople's individual performance evaluation papers and a maximum
possible increment to them.
According to him It is difficult for the sales manager to predict the influence of
the external factors on the performance of the sales force. To measure
performance, it is necessary for the sales manager to put in place a
performance evaluation procedure.
What improvement would you suggest to the existing system of performance
evaluation of the salespeople of this company?

Ans:-The performance standard should The sales manager must ensure that
the performance standards are set to compare and evaluate the actual
performance of the sales force.
The standards vary from industry to industry and are different for different job
profiles. Performance standards come under quantitative standards, qualitative
standards, time-based standards, or cost-based standards. All the sales force
activities can be segregated into one of these four categories and compared
with the base standard. Many methods of performance evaluation have been
developed over the years. Yet, there is no single method that can be considered
ideal for all organizations.
Some of the commonly used methods are essays, rating scales,
rankings, management by objectives and behaviorally-anchored rating scales.
Several modern methods like critical incident appraisal,
work-standards method, family of measures, etc., have been developed to suit
variations and other requirements.