Evaluating Salesperson Performance General Electric's Best-to-Worst Employee Ranking System ck Welch venerable former CEO of Genel Elec, wanted to make one lat Sweeping change before ns eparre trom fice. He enisoned & performan 2:3) tam that so ety ana ove separates the wheat rom te Ca that no. body wou question wy ow performers wert go, nd he mantct eine cena in he sand such tat inthe long run te loweseerrmers would have ite rcoutse against maragements econ foe tem. Thus war born GE new performance {adng system wih al enpeyens are rrked agar one anathe a grades strand dong «bel cone ‘ne mig concle that hs was asin bold act of ame-duck CEO, wer i tot forthe fact that Hevit Fehr, Sun Meryem or, Mroso, th sco Stems, ands host ofthe olarotndusty compares have followed Sut. n fact, anabtsexinae tat about 20 percent of US. companies ve implemented forced one tng they compel manager a peal gat n gta sae es at ola supra team, Converse @ maaocessesperon a stugging uk con ome ou loon great.“ many eae, the lowest performer might nab hat mach ‘ewer than the highest” say Paul Spectre roe of reutalpacholoy athe ners of Sout lnc, Most compan nyt guard aga hs problem Sy ctan, ing ron tidy ppg pe dsibton to Sele ears & Work soups, bu tt ‘eons tne sped has 0 be mace up somenhere ase Unforunate, th spresding Brocess has tspoblems in that (1) pus actos umt managers Ue poston othe, 'e bargain wih eachother to make the sprea, and (2) asumes int pevrmance levluaion can somehow be stanaarae aces ois ‘nother aree of contention ithe ranking ere themsehrs, The more subjective qualitative he evaluative citera, the mare sifcuh pertarmance bio astesely gauge. To complicate matters in todays envwonment of latonship and teambateg Selig, much > what constutes salesperson efieciveness im Gealing with conte tend foward the subjective side, nol the jective se, 5 one might expect Iigaton Ion the rao n particular penal the weak est member of small satisfactorily periorming sles team can be a magne! tor 9 lawsuit“ youd not have clearcut ferences is wey ale 19 jt nig oe Detson” says Pal Gregan, an atorey who specaltes in employment aur ot aril tif the person hasbeen tl for yeas that hi or her watk wos fe Part of the problem with rank en yank,” Gregory say, "is that most managers (ete mot trained to give honest evaluations, s0'ne hones. cea oerormonce) Astor exe, Vis tan ge com. Sours Math 2, “Perma Rava: Pie Cuves Aes" Ferre ay 28 20, 17a Mele cae Moen. be Bele Row en Learning Objectives Performance evsuatons should bea process hat provides a forum for dalogue between slesgerson and the sles manage; foeured on ginin te imps fo {future profesor! development and performance succes nofce Yo ocesaly execute s performance review ale managers must have ong working sow, ledge of citfarert measures of perfomance that ae approprinte toe parler seling station, Then they mus conduct the appa na manner hat lle the Salesperson to bud on current strengths and proficenie ané make portomence Improvements where warranted ‘After reading his chapter, you should be abe to + Explain the ference between parormance and efectvaess > entity abjecrve measures of salesperson parormance, both output snd input. + Vile rt eels as an objective apaoach te aleperson performanceespetson performance +r ey sues related to subjecve measurement of nd the forme tot might be ued te adminter such an eval + Undersond how a sles manager can make the performance review process mare productive and valuable forthe salesperson PERFORMANCE VERSUS EFFECTIVENESS se of alespeope he dsinction among the eon- ‘ffesveness*Altouph role perceptions, epic, sear iSet ent meuaton evel wee dzcssed in Chair 6 as being rest inked et- Faas Paice unporantt understand tht thy are ect linked to behavior as wel ahavlon festa wht salespeople dota he asks on whieh hey expend effort whic nerking These asks might ode cling on eusomers, wating orders, preparing IIE Nuentons sending followup sommonication, andthe ike, These are the sles fever Sacussed i Chater2 tuk of pesformance ss behavior evaluated i terms ofits contribution tothe pals of ty rgaation In hes words performance hat normative clement reflecting “Shtberotalesperon's behavior good bu pop rinappropit in ight of te "Noe that behavior 06 performance ace both ino- ‘pansion’ goals and objectives cer le sales activin Of course, ete eis incur depend onthe ype of Ses job in question ne uc sun sulespersanevlton fares, le’ also distinguish berween perfor. Sie efleivence, By definion effectiveness refers to some summary index of Than nid ist es arty responsible. Examples in- Seer ie ctome: marke share, profit sles, nd customer retention mate. The ‘fact dinsionSeneenprernane and eevee i hat the late doesnot refs 0 SESS Sr Sap tainen iba fncin of dana fcr not under theives alee. [sont connl These lncide seh things stop maagerent policies, sles potent oF {iil of eteritory, and actions of eampetos. Ttisquocealy agred that slspegle nou be eve solely on those phases of sles pelos oer atic they exe conor an shoul not beheld responsible fo fons ECtr ti conual Its company's method 9 measuring salesperson performance itt Pear aig comparttons serous consideration mast e piven odstingising beeen Fass thins leper’ contol vers tose outside his or her cotol in developing Jado for abjecve or subjective caution Leadership 13.1 presen a classi theory aes ration, stibution theory, at is quieren te hs managerial dilemma ‘pe could segue that alos raaagers cre specification of performance standards ty ein hn lint inequities sros evita, For example, percentage of unt seed sould be an aerepble mesrure of performance beense quotas supposedly co ge alas in environmental fsior actos eioris, Amity, & comparison of Eas soone wih cespect to pererage of oot ataind isa better mexsure of ther perfe= See Tes ics compas tt sly looks eck repeseiative's evel of abso sles ‘rina she, asuming the qotas were done wal Hovever,assoming that its f° SE RST eats sit" sometimes quotas ae at so well developed. In some insists bay and ar nor ecesrly sed or ax objective assessment fall the fork Tae tite consi a salesperson bly to makes sle, This especially te if uw developmen eles oo bear on historia trends ané not enough on energi8f {fens in gin sles reso. aps of bev, performance 208 onanism etcoreSco ae cn eee eee Peruse hes, He sine vrei yeu fe Pili lon center ce ae @)ervrormeni! iba Steal on Ws 5) person. ot depoetonaweese aya tat eer pepe tu ator an perornncs sd tne some smu of ot. the se woe proms the teflon i expected by the ater 10 vave the igh ably ‘crrdng te enantio anager pecepisn f Saesersons perlarance i fuel Sty tes on. pa miu the eee of erp tak ea ‘apt of tsk eiliclty may be en varsited te tron, fe mpi sing doe oir oy te enon ers en lon pam) ire by en release new be sean peso Ins 520m peried yad on. Hee pepo at tpn stotons fonenuaierenion ot tan, which Ewaspc oe Gena concen: 9 gute as pound nthe een» stepenoreiustons, iy tn sige to lon may ese ‘ich als reper fon on apation avo sue 15 te sanspesars aly onde he “ie ane ‘ists ard fee! unary ested resling 8 very Aha ses manages to fly erser aeons nd Beton fs when main tne ening 8 ng Serco eal now a Even wlen quotas a dane wel the measire “percentage of austen” il omits touch with eipect to slesperson’ perfomance For one hing, tenes th pti af sles. Sts reps canbe compared with resesto profit, rhe ree they proce onthe aces nde thi contlEsalshng quest severly consider he many fe ‘ors ates the level of lea reprsenntve shoul be abe o produce In tenry it ies, determining th apport andar rofiabiy for enc ein seen roe dif. Evan od sles and pri standards could be develope the problem of emlonting salespzoplowould nat be slved beste nib rea icorporetes ative me)ose bt al ie subst consequences tothe Frm nthe ong avn the groundpre for angler een relationship, ge acco. Other aetivias Ut ofen Bo oping a ceils esas beyond ave no shorter “hase log th ine deve paviclry whan developing 2 potently ‘hmmasrcd rebuilding longtrn goodwill fe the company and de Undurtening of the apie of te produits being, Thus, oer me “Tiss gras ae neces mare dec refit salesperson performace. Sree eases nse to eva salespeople al nto oo broad categories yale measure and Q) sutjestve measures” Objective measures refes satistos See Tec aus gus fom te fr internal dt, These mensores are bes ses (eee ne ee clement a th sles proces. Subjecrive meaures typically rely on et- aan es ganna insite cgatuaon, molly the alepescns immeinte ‘GulLSnns ov how indigo! solespeople are dng. Subjective measures are generally EROS ieet observation oft salesperson By the manager Bot may involv np ‘om casiomer or athe sures OBJECTIVE MEASURES: extern 13.1 Input menrres ede evant ssispeoe tothe majorentegres: (1) ouput measure, (2) inet mes rnp menue Exhibit 13.1 Ite some ofthe more com od Ee 152i the ape) provides some of he ‘Objective measures ila sure, and Gratis of utp thon capt ar inp ee, ‘hore ommony ed at. Diner weir eaters fai Mberoroce “Til ub of INeapesiotee amber aoe ale Amie olaneeedocin Number tres cs acous sigeoncime ion Sara facia scx Depot ‘nbe sow ene Coe pea ime Shedim es Aumbe soreeeecuns Een "Number of prospective accounts od : Be ek me aPecanage of “ psapercainge of gue Pane calls fo rospecs Nun’ ferme proposal developed Deng dpi se uP Naber of meeings had with ‘Seibel nsnbaraf tating Sasson el eth ‘Geviboeat personel amber fea dante castomers Nanper of serie alse Nonbet af overdue accounts colecte Yo ae Eh ee“The ate of xt, inputs and ino meant aesperon performance 9 ran a he aatre ofthe relationship sling poses Au me hove eas processes, erpesythore experienced y tlepsopcaceng to secre ho !aintinlngsierm relationships wih profiable estomert, am tke mon yu ‘Within he eats sen proses, slespeope engae native i (ps sui Fhe prospec or yer The mapa ean mente thre asic ls Ine acvies it es for eath age By examining hi performance evict taper ean pinpin potenti areas To improvement by each sleserso, oF wl ‘hanger hat shel be mage th ter stg a ha aligned wth how hers ssa by Output Measures. ‘Output measures represen ros ofthe flor expended by he lesen Onters "he umber oF oder ech slespeson secures ifn ad to wate the ep bly to itil les mls. Although the mamber of oder» elespeeon tzu norte. te verape siz of thoge order it eual 8b. Having many order may mean the des tre soll and may indieate te perc it spending to mich tine ealing ona, len-potental earmers and no eno time ealing om ge, high-otent easens Sill anther red measur ise number af eaesed ede. A tletpreon se 2 re repotion ol ordre ebequenteeesiin may be ving hih-resire Tacs oases pesannone rater hm engaging nash sling “The various sesnun menses provide perspective on be ey feet asimonis and alse on ow te slsperach shal the iy. Atenton othe mean as Fp these marager overcome te tndony fe dso eto) inforstion as dsaste in Lenderhip [3.1 On popaar ae octet rb of sie ae oun inthe snlepesons customer parla, Vai definitions of nrtve scoun se Use. Foe example my be ary cuter hth pneed abo inthe past sh mons 1 inthe pas ea A snlespeesn prformanst ioe yar maybe compared ith pce rane in past yeas by coasting the umber of ve nzouns, Closely elated Io it yattik ee meas that racks he aber of! astute anlepeaon develop ‘ive time, Some smpanies even eeuishne-porpes gules fr aespeope tale { eagy comparison of perfomance faa in ie reso alton, ‘At wth the nurber fnew acount, the numeral azcours an be reveling isi snce i indates how rosa te elsperen ising he ongoing eds of the ested arcouns inthe terior Sil other acount measures by which epee am be compared se th numberof overdue acount which might inde he el to which the sles is following company procedures in srening account fo hit ‘rediworhines, and he number a prospective stcouns, which aero th elesperson> ili a on oti age ease Input Measures ‘Many objective measures of pecermanee evaluation fous on te efforts sles represen tats expend rata han the esl of hoe effort These ofan ae input measures ofperfomance. Input asus are important foro Jay reasons. i effets or desi shietohwior ae mich mors ere doatlale an ss inthe sot et Ie eps Ses all shor of gusta, the problem may le with the person, the gta, or hangs in‘teem armen. On teeter hana fhe number of calls stlesperson makes falls shor tthe ge iis mc clearer ina! the problem le mor diet with te nidun Secon inrelationship sling sme lg eouely ests between intend outputs A arvculrs are sale may be he esl of several years of effort. Thus, Focus oth lois tbsfavios) themselves affords the sales manage the apportanty to evaluate ne och the slesperson during the estionshi selling process nto making changes tha can postive fet the ouput esl), cots ~The number of eurtent customer a prospec cli ofen ued to decide whether sles prs it ovrng the erry propa. The number of els on ssh ascounsenp {an icici te design a econ nd lo shouldbe used to crane the slesperson assigned otro. Aral ales ells are a retouce with finite supply they repre Sent resoure that is time sense in hat the tine avaible make them evaporates fi ienor sed CRD software systems integrate customer const by slegpeope into thei informa tis collin nays, and reporting capable, Als, come management software, sch as Goin, tomate tell ep: ross In 3 recor eablsed foreach ae ‘soun the slesperson can input foomation abou each cl. Tas information cn be ut ‘waried byte softare fora report mace aval othe sles manager eth by -mal or Web acess OF ous, ithe CRM softace resides on wahaed network, te sles ma ger can eces the iformaton dea Suc echanopica advances minimize the tne spent prepreg paperwork and tly slespeopie maximize thie in ont of bayer, ‘hey ls serve sa great ad to sales mans is perfomance evn Time on Te Utzon . ‘The suber days worked anh als per (or alate) ae routinely used by many onipaies tases salespeople efforts since the rot of the two auariis provides ¢ Sires measueaf the extent of aster coos Ihe amoun! of customer conta: by ¢ salesperson inv, one can ok separately atthe components fo se wher the problem its Perhaps the salesperson has not ben working enough becaue of entemating circum ‘ances, situa hat would sbow up in the mumber of dye washed Alteratvly. per ap he sslespsor' tale int was entsfiay, ul the slaperson ws ho ing ‘a ion wise and consequent bad ow el te. ‘Comparing slespopie' division oF ime bewee sales cll, even. office work, and cer job apecsefers a uel pengetve, Forte moet prt the rm would want sles people to maximize the time i face-fae customer contact athe expanse of he other, "wo factor. Ses orpanzatins want slespeape to minimize unproductive time. OF ‘ous, felecomming. ex working fom a ome of, i nat nem is the field of profee- sonal selling. Through necessity (2, no company faclity fom which work in the salespersons esdqarte’ iy) er convenience, many salespeople maintain thir primary offce pace a beirhome, Aas fine tization requires dealediapu on how each clespreon i spending time. and collecting and aalying this da can be expensive and can islf be time Emnsiming Son eomptier, Ronee, outa onda! euch ease bestuos the bene Tis sre deemed w outweigh the css Espenses ‘The objective inp elicused sof for evaluating salespeople (als time and time leon focus mainly onthe exent of slepeson efforts, Another ey emphasis| Exhibi 132 ss some ofthe aioe commen taed (evel salespeople. The thet expense etre by st nempenan Sore br es expense downy he och a ovomelieexpens, lodging expenics entrainment expenses al oh Sls managers might nok thx expense alo penta of es» gy fatespernon and thn ve thse expe ton pr ft slsperaons performance aon aang he die: cont of slepoope wih eusomers, sme fms man ior indie ee Thy ue inner sch tthe urbe of ers Wie, amber of ISepone eal mad, na marca 0 arma roposus ues Tew have lene rlatoneip sling w slp actives go exon wha right be conidoed «pure sling empbaris For example, companies tht sl 1 tien rns es slpeepl oly roar and sok selves, conte ipley, lp reales “rte, and engage ro mune ofthe nomeling vets as part f an engoing ie Feitnship. neh insane, em ofen ry te moniter extent of ee des, ing Foch indent rte umber of promotional or advertising dle ep, the umber of ales meting, the numberof tng session fr estar persone! el enum ‘tale slespraon made on dealer custmet, the numberof wevie els mas, he ‘umber ef customer complains recived andthe numberof everde acount collected. ome ofthis nfornaton can be pathereé rom the sles repring System, a iis Becoming ineeangy commana fo pin feedback on clement of exesperso perf ane deal em customers Tol ten i nussed Ina ater section of hi hye on $o-dpre perfomance fndack Ratio Measures ‘as we ave earned futon opt ter han sags volume aod profit cn ‘ie useful information on bow espeopl are performing. So ean anion fs: tors. Additional insight yao be gathered by combining te varios ouput o ins In sleted ways, pial lah form of various ratio measures As mentioned etic, frouped by expense, open! developmen and servicing alos, an ley oF Prodetviy ratio, Bsponre Ratios ‘The sles expens io sombins both salespeople’ ips end the resus produc by hove inputs engl umber. Slxpepl an afc sa either by making eso by controling expenses. The rato oan also be use o analyze salesperson exporss by ‘ope Thus alevresportaton eens ri tha i muchighet fron salesperson tha ‘here ight nda te slespereon covering is ore troy inert. However, Iti imprint tht the soles nnageresnpin terror dferences when con ating there ete, a the slespeian who as an oun ratio ray sly ave © Teeger more geogpiclly coped sles etry t coe, “The on per eal ato express the cots of upping cach salesperson nthe eld 5 « ‘en af ber fel the lesson naes The ig ean De eva wing 1 Cons, othe cont can be broken down by clement Utes sucha expenses perl {ed tvel cost yr ell an be computed Not only arth ratios wei for comparing {ateseope fom the same fi, bl fey ean ako Be compared with hoe f eter comps: ‘isin the sae art tes how ein thf esonshi eng fo i. Sich Comparative data may be avalible from tade or profesional associtions and fromexnieir 132 + Ses ence ato = SDs + Comper ao = whens Account covelopment and serving rts + Aecounipanetaton aio» Aunts se TaaTaccoons ae ‘+ pew-genunt amin ao = Mamba ae ee Pa Fre scouns nated ot count to rama Sea + Soe perscountatio = «Sse lone a «wun ir tat ol una a Sone Frame oOwe 2 amas cacses oes “Gard ader + scour = Sse snes ton ses Ras 1S TE + oer ans stati ‘Womber of days worked evan Number of ors Banner oa + Panne ca + ses pra rt a companies such as Dell that gtr and publish expense data and ets for sles ‘manageren we (vist woe darelcorp com) Account Development end Serelng Ratios 'A numberof ratios concem aeeunt nd orders hit refet on how well alspeople are apruig the potential business that exits in tei terores. Te account penetration ct, for example, mesrue the percentage of s=ount in he estar fam which the sles: pervn tower order It provide Set maszre of wheter the salesperson issn ming the erm ofthe business re working the ereitory systematically and hard Ineanaleo sid management in defying bo underperonning ccours and necouns at ‘ve ow iftine valet te els oranastion ‘The nw acrountcoversion rai sal tneasures the salesperso’ ability to convert prospects to cusomes. The lost scout rae eases how well the slesperson mantisTheses pt accounts he slaps Ces pet aco! were ‘tw se cl net the sleserson pening oe mh eel: al se Profle neccuns a enough He cling ole bes. Oe ea bk the les er neo ute by las of aca, wc can reveal th eng and weakness Seat sispein, Fr enable salspertn who Sa low sles pe espe fr Isp, hiphopenil acount mip nee help ering how t sl ee buy cer "he vera drs rc can eva he slesperan\ ates of ang ons tomes ver low average averse might fuges ha eal af tho aga an the Salespes's pedi cou be inpove by apse tem me Toe oder ancl preon ir osinghigh-resrare tects o esis orisha pursing lon sel Ing uppoaces and handling esomens ow consul menser ey measuremenin some types of besinese, ical thos th provide supplies snd row materi os0um sre. Account sare prentge of th account hs eth: he slspeion get Mary baer wil alt bates eng muri ver fon, believing fen eroneousy Um they ge beter sevice ae ome pies when sles ove tcompet forthe busines endure wher ck buying pase ae prevl, ie ‘number of acca es mere elespeople ta he sae of exch reso. Ar a oun shire nsenee,eeoomiet of ale net, whieh ie he rit oF the aco Silty the meas it ap indiewion of the erengh he eltonshp wih the necout CCl Activity or Prodweiy Rie Call sii aos menste He ffertand plnaingslespeople pt in the esiomer ail scion an te sures they deve fort The metsrer migh be ued to compare Salesperson aetivies i ual—soel as when using alls pe yor when using als pez ‘oul numberof accounts or by Wi of count. The planed ell aco be wed to a esp if he sslesieron i ayematialy pinning eon coverage or whethr terre fenaive is working the terior witht en ovecll gone plan. The ore ps call io Seas cl onthe question of wheter he sslaspasan’s calls on average re profucve “This ratio tomaines ale the it atioorbating mera, since cares the momber otsuccsies (his of adr) in lao the number oat (al). ‘Summary of Objective Measures ‘As Eni 13.1, 13.2 and he above dsusion inate, mary bjs orp measures, Input measures, sd ao measures ar ealbe by which salespeope may be alate and mare. yo probaly sense, many the measures some recandnt tat y rondeeverlepinglformaion eo slespasen effectiveness. A suber ofthe aos ould ‘be developed by combining the vasious opts, ngs, or to in iient ways. Fr cx np one eombiation hat rofl aed teva spp the lowing ston cae Ones, Sales Daeworked * Calle ~ Ones Sales Daya worked Diy Call Balog verge voned mie * ange overste “The equation highligh nicely what salesperson can do to increase sales The repre- senutve an inceagp the (1) sumbe of cays woke 2) calls made perdu, (level ofsuccess in sesung an onde on ven cll, ti) se of those oder. Ths, the eaustion an be weed o oat Pow an iwi salespersons perfomance could be improves Suchanequtlon, though, fuse on te rl ofthe slespersen ellos abd ignore he con ofthe efforts. Sty, nay of Ue oer measures at have been reviewed could be combines sir equtions, bt these oe wuld probably ignore ane oF more ele mens of salesperson sstess, Bom line: No single menor exit tht ean fll empare ‘he Scope of alesperson electives. Inconclocing hit sain of Sbjetve measure of salesperson performance, te e sent points ceserve mention Ft, js ae meatrag sisi sales volume and pit, ave adveniapes and dsavaniages for use in evalaing selespeeple, so do all of these bins eestie measure of performance. Rather han relying on only one of 10 ofthe Pease teases pevfomnanc, he mths aze mare productively ued in combination, Second ad lovey lnportan ll ofthe indotes area ad to Judgment, nots subsite {cit For example, the United Snes Army Recruting Command te par ofthe Ary hat sells young prop on joining) ence ovetlied on conversion ratios (he perentage of prospects who acl ended up joining the army) to evaluate recruiters’ performance ‘Orders were ise tht cil of ertin yes adobe nase by a hgh percentage. The ‘problem was tht while the elle ould be increased only could not be maintained. Recruiting efleivenees not only didnot ineretse but acually went down a reruter ‘morale destined. The comparisons lowed by th varius indexes shou be the begining, ot the conlsion, of any ali almed at assessing how wel individual eslespeople or the env sles force are doing. SUBJECTIVE MEASURES ‘wef concep! tition existe bewoon the quanttve nat of objective measures ‘of performance disussed inthe preceding testo aad the gualitstive nature of the Subjective measures dicussed bare. Quantitative measres of performance focus onthe ‘uput se inputs of what salespeople do, whereas quliative measures reflect behaviors] ‘rproceesasprs f what they do ad how wel they dit Tas ifference in what i being ‘hessued creas some marked differences inte wy objective and subjective measure: ‘ent ae then an how they ar ed. Te many was it is more eifieltto ase the quality rater thn the quantity «slespenon’ performance. Quanly measure can quire & dialed analysis of sales eon al report an exeasive tine wilzation mali, o ab analysis of the type and umber of aching activites employed. However, once the measurement procedure i ‘et, typical can be conduced wilh les bias and inconsseney than can quality met Surement. On th oer han when assessing qualia performance factors, even well Gesgnee meesuement proces tat i firmly In place leaves mach more rom for bias in the evaluation, Blas refers to perfomance evaluations that differ from objective realy, ‘ualy bse oc errs by the evalstor Even well-designed systems must invariably rely fon the prranal deren ofthe indvidealo inivduals charged wit evaluation, in out ‘ste eles mages Typically, thse judgments are secured by having the manager rate "he closers an perfrmanoe appr form on ech of amber of atebutes using “ome typeof reng fale, The abuts ost commonly evaluated using performance canton forms inlade, 1, Sales rel. Yume performance tls tone accounts, and sling the fll rout ine 2. Job fnowlede, Knowledge of sompany policies, pris, sad products.”‘ing repor neers 4 Cusemer an conpan:releuont The sales twee an comps {Perna chores, Inte, emonel appearence Note ia tes ince «mix of seca abet performance meas no sit neat mos mal performance evans falespaple ive combination these ype ofa crten Forme Used for Subjective Measurement Exhibit 33 shows pial tlesperion evan frm for asus subjective performance citer, The specie slutve ents Should math os Knife key suse fotos {bette potion oe Cape 2 fore dicusion a be ideriinton okey sues fers or fale postions} Stchenlunons maybe completed mun, emisnnuly, query, ending on the fem naman reoure management policies Ties evolutions suplem=n: Ube tect pecformane ate generated fr te etme frame to prove a overall ea ‘Son ofslerpenon performance. The orm inExib 33 set han many othr ip se [esrse it onii enon or verbal ssp fo te various points on te sale Actes frome feta of hs exemple fom ire pace rove forconment, which can enhance inden the rings sop The form conan tion where needed improve ‘ena eoresive eons may be detaled. Al inal, he frm shuld ite eons Th loge betwen th slept nd sales manag md ete aespersan understand Ir orerasengts sd weskeater nd develo apprences io improve erormanc. "The nora ype ofraing forms ply Tit te atrbats of res long one side of the fon an the evtain actives along the ob. Litle deseo is vided thas the po tena fr och ei exit te eatin Exhibit 134 sass beh oor form Df eoure this ipe efor ea be completed ery eb soc the exlotrsiply checks the box Tr the jet hat most clea dese is or hr peeepion ofthe slesrer fon’ performance or each atirfbute, Unforuatly soc forms ae quite emmon i ales ‘enfztione, nd ny woo very pol in pretie end do ite to timate cansroive inlgue betwen theslesperson ane eles mane Selespeope pally recive iti wse {ut itforetion on isprving perfomance when forms roc 8 Exhibit 4 ar usd Problems with Subjective Performance Messurenent ‘Some corn prblens wit performance epic «tems tnt ey on sbjecive ing vm, particlry tose sing the simple checklist ype, ince the fllowing* 1. Lack ofan outcone oes. The mast wef pe of perfomance sprang a- ‘of improveret end the ans that mtb take omplement seh spews Forth to ocr, be key behuiers in accomplishing th tsk assigned mst been Fed Unforete many companies have ot ken this tp. Rates, they hae simply ‘denied stiibutes thought toe elatd to perfomance, it they lave not xtempte 0 [Sutematicllyasess whether he atibtes rey. One ype of pcformance appraisal “alles BARS (ocvirl anchored ating So) haps overcome his weakness. A BARS ut acne bebvins tht te moO ess eetve wih npc Toe ols stblsed forthe person, BARS willbe dcused in more eal shorty 2 Mean perserality rats. Many perfereance easton frms contain penalty ‘ctor ar strut. fa the ease of anlespeople, these atibutes might nelude suchHIBIT 13.3 Samplenbieinepertrmaneeeraanton form “SALES PERSONNEL — INVENTORY poy Name | Sass siete saccemcod enamine acpnne meine | ‘pace rlon the arse 4; Mike yourrating an scat descnpson the peioh ted, 05 “peters comme nog, Sn 1. Rtowledoe eee eamaieds —salinogd "\ botow amrape te hociabiy BRINE carci ot” inknowedge "actuated Tionethe= loweige cee hour knowlege 3 produced.) Neessfuhe’ needed ta’ Pendle products end Sepcatonte taining. Randejoo” ° sastacory fecal represent ne taco problems coneany inate intis spplistion fcc men Bi ee 2, Degree of 20 8 8 5 sees 0. scceptance by Not acepab” ManapestoSee Hal stteioy sone good Enys excellent Gistomes tarot cmtomestutitonnip: femeane &pessonal ote, fergeiealy wthmon | aceped by felatonship Gotan Tees Gsones. wrvalyall with tually cnty tothe alone. al estomer, fies oman aS rere a Amountet = a a 2° o Hort devoted Sceptinalin” Deets Devos fers eny——_Urstisacton escquiingtheameuntot consantefotinemitent minimum Dees not pt business line sndetfon Indeveoping—efioin Emountaf tine fern sutfoent putorhin bose scqurng —ardeffon. effort to over produce oun snes. . mimensg ErexvI 13.3 5. Amount of| Service given 6. Dependability mount of Supentsen neesea Aiud tower cenpan focompany oly o 1 Sunes, Sac Secrgr a} mami oy toes row igus Grcmdances bane tal rage Soler mares sumone estan nt ‘oonong comments ° a o o o ‘rey Ses ony Sees Gis wery Goat of sence rmeimam —~ scours wi) goodsence 0 they fo ght counsone Senee st fepliybt_—SlemomescuLtandng inlet mace aime’ goeena do. fewer thin symone Scope ot hana coneary oriogo. aie. Comments . a ° a a Always Consstenty Rem th Hort fequies ‘homushy —eableundarfeonable™”—acetsenaly clove, Breast! ova Ppompines lage guise tupsviion roblers in Condans. —Undernarmal mare than el hoses Theterton, Does specnlasSopewion —— nomal ote, renuncer wer aregu ‘Supenson, mom dtfeut signee ‘Soctions. promptly Rowse tie ono ‘rrerpenses —supeinon andasumes fees. Kade without ing tio, Comments D o o D o Dossnst Ghesonly_——Goesalong dope and Ghee suspon asiieuineetwthrampany —Sippans—omating feary —_loeamparypaloyon'mon company Suppo othe polgyblomes poigyaesrat Seasons poly company na theeompany'er actos mentor Sivancacions. tomy ‘espn that ofa pois entinveed126 rar tivee fvluson and ont of te Se rogram EXHIBIT 13.3 continued) 8. Judgment 9, Resourcefuinass wea ~ caiones estore ‘Rough heate rir beroaly may revs wih eal. a 2 2 ® a. Zesipcerd —adgusin, caleot ves ane rosest ‘relasons cre Tong Sec esoercere Boeccten Sesesontie, Decne equa treat constr: crac ‘aston yard Hes fales to tga, ements iernes Intatve o iieave ne ‘gales, imagination raginatin methods, 20d insouing Conve tea probiors conte devon ow ges ang technics hing the os ait problems,extn 13.3 “o-be more eHfectve on presen eb, this employer shoul 1 Be guen tions nsiuction on 2 Be gwen adatianal experience uth a 5 Study sue mjc at 4 Change atte a foe 5 The mathig more that cen forthe employee beaut —— Saws ies Bn BA Poor Fair Salsfedory Good Outranding sonnet Knowledge of wrt oa a ° a sabjesive Degree cf apts performance by aston ° ° 2 ‘valet orm amin of afore ‘cging bess a o 5 soity oamureoaines 5 a ‘enous ol seen eno cusiorats °: o ° Dependasty emeun of Superson eased 3 3 ° ose fours eam suppor forcongeny poices a 2 secret 5 8. a esuretines 3 o a ‘hing as nave and resourcefulness. Although hese atibate ae initvelyspeal- ing, these ual lationship o performance is pen oquaton® ‘al eect. at eesti common phenomenon te use of ay performance evale ‘sion frm Ic veers the fat thatthe rating aspned to one carcerte my ie fen ilcoce He age arene all ether characteris ala eval "ang The flo ffect old tht sles managers el evaluations canbe pode hte well fo hi rating ofthe salesperson on te gle performance smerson they alive isthe ost portant Different branch orion manager might hve ire ‘mt belfs aout whats mos imporart, compauing the problen,4 Lenieevor horses. Some sales managers ta the extemes, Some are very lenient and nt very slesperson as god or oustanding on every atcbue, whereas others ds us he enpsite This behavior is ofen funcin of tet own personals and ha Detceptos of what comprises oustanding performance, and fundamental differ nce may exit in he way the slespeple under each fhe manages are actualy per Forming. The us of difleren cetinios a performance depending on the manegeran senosy undermine the whol performance apa sem Cente eneny- Some managers exe apps direction in that they aves, or very rarely. peoples th ends of the scl. Rae, they use midcle-ofte-rud ply ‘esl acngs. One lars ver lie from sich ting soc! ue iflerencee a patos ‘ance aod such ratings canbe parculry-rovblesome when «company Mampi 19 We ahislry of por performance asthe bass fs termination decision, As ilutted ‘in he opening vignette to thi chapter, freed aking ystems of evaluation a GE and cer companies were insti in lage part ireumven manage tendencies to exe bib eieny or arses renal tendency i their evaluations, bu ranking yea ‘ave their om problems as ilustte ie the opening vignete “heen bas. lnterpersona barf to theft tat ur perceptions of others and the social acceptably of thei beavis are iftened by how much we like or disie ‘hem personally Many sales manages" evaluations of eles rep ae smiley feted Fonhermor, research sugges selesprson can use personal inflsnce or impression !management strategie on the manager 1 bis evaluation upward 2. Organtzatorl uses inuence.Pcfrmance rings are often affected by the use to which they wll be put within the eranizatin. IF pemotons and monetary peyments hinge o the ratings, a tendency may exit owaré leniency onthe pr of he manager ‘who values te fiendship an soppor of subordinates who pres forhignet rang. Tis 01 ifficult io imagine the dleims of adit sales manager if other sti sles {cams recived consistently higher compensation ierenent and moe promotions has ‘is or hr sales group. On te athe tand, wes apprise are used pias fo the de> ‘lopment of ordinates, managers endo moe fel pinpoint weaknees end faces ‘on whats wrong and bow it an be improved” By bow it shoud be lear that pafoomanc evaluation may be fraught with oppocintes for biases and inceuracies to creep into the proces Leadership 13.2 describes one farm of potential evluntr bias in more deta theOutome bis, A outcome ties occurs when Sales manage alls the outcome of deison ora seis of decisions made by sles, Prion tool ifaece te pefomance rating made by te manage, Avoiding Errors in Performance Evaluation “To gun sgsns the ditonions inroduced in he perfomance appraise system by prob lems suc a thse ised above, many Firms provide extensive tening and puldeines © sales managers on completing the foms and condcting the appl press. Some com ‘mon instructions sued with eu on plage, 1. Readthe defnions of ach rat thoroughly and carefully before rating, 2. Guard again the common ene to ovecte. 3. Do notlet personal likes o disies influence your tings. Beas objective as posible 4 Doo pemit yur evahation fone fats to influence yur evaluation of another.Pee ees at ea ee by nature, ples aking i cue on bat feu Pesos on me cee el arf ee ng ig on ane ve on ris, mage sop oe Ser It be dg things sg bt ms you gute 2 8 These “ings” we we aingabout eal the procs ssp gon thos sling. Ono vy Soe they are alte econ mace bythe lespeon oe te p10 tha persons aevformance remembet, earl n ths ‘hopier we ceed pefsmance hems! bhai a Wo the oven scart tote gone Sometimes the oucomes ane the process dy ‘tote slcomes ste for ale,» lrpeson hs (pets uri andes vas gaat ong a eng that report of ne als esate cae satan ee} Cle the tes menage Sl Sanae ans reser ie cnevenn. ane opps s svugging wth the proces elements of the oh cll the se manager eee to doceent Te pooper mane an evlomenal an nen ob utr pb. sano rare gating Dt tn Me favoabieoazome was ee a rnp wna om 2 lana et oon a ome ote av nt cy bua to much ef ning the soesoon a8) Ets or he burt ig ipa hy evel, bases sy one hat peermence 5, Bese ywurating onthe obtve perfrmanc ofthe slesperon non otto Weey Are rab, pets the west case 2a conse te {ied a pon pvormas txnd tty on te scone salon uno wan he se fee ‘as aca. That' sespeope know wen they 9 the Prfeson tbonomane tk alr the kyo as TMs pepe a be sea we sah mason eng Wuatone Burn tes Toy ‘Solano plete alee tle deforma catenin tg fb ‘nom ne eM enne, he cart Iman eu tame thee cs may eater olen re Furl et mot at aro work w ininate multiple aipecs of performance mo Ine eaten poss. Die appeal asses ts the BARS tm esas nN cat Sito ree 6. Never ean employe on vera instances of god or por wer, but ater on genera ees ole over the woe pied 7 Have snndcesons for yourtings* ‘Theee admonitions can ep parca whee he evaluator ms soppy the easons fo rings Hever, thy donot rele prebens reed ote seleston of abates fr eval {tig ane how the esuliag fem are presets on the frm. A end in pesermance a pris eiscted treselving bis ane ete BARS (Dehaviorlly anchored ating Scale).exer 13.5 ‘ABARS scale with eave acters ‘spremptnest in Promarret Using a BARS System [A BARS system temps te concentate on the behaviors and oes performance eerie Ielled byte inividal. The sytn orses onthe feet that = number of that ea [actor fet any employee's performance. However some of Ee hap succes than ar others andthe key to evalatng people st fous on these Shnsel occas ctor (8¢s),Iiplemening a BARS stem for evlutingsslespecple Free eating the behaviors that Ky oe performance, Also, the subsequent Fiadincn af zspesons perfomance mus be conducted by rating these Key behaviors ‘ing the appropriate descriptions “The process of developing a BARS system goss solos, Firs, the ey behaviors with respon Ropatasce ne ete yong eos! ident. Cita incidents ae o==u- Eze hae wl (ez fo pefoance To se te etal inedet technique, those [valved ould be sed to ienty sme paul outstanding example of god or bod ‘evormance anode the easne win!" The pTommnces identified are then reused {be smller umber of perfomance dineasions ‘Nera the sour of etc! incidents presented fo roup of sales personnel who are sinc ibanign eth eal ncden om appropiate performance dimension, An nedent Epica epeinf 60 percent or mare ofthe group assign i to the same dimension as {i oe insouent development grog. The sles personel group is also asked torte the (Shvor describe in the eval inlenton a 7- or LOpont sale with respect to ow route ov neil represent erforuace on te dimension. Incidents tat gen- ‘She goad sgrnnent i tating, pil inccated by alow standard deviation are con- ‘Sistas nscale The patel incidents cosen are determined by the oetion ‘love th cle ermessred by ie ean ears. Typically th ial scale asst to eight chess An example of BARS scale tat resulted fom sch process forthe etribute ‘Srompines in mating deadlines" shown in Exhibit 13. ery high Wa — Gass peed ic mona no a acesay fel reports even the mest ‘hengeates he al ooterberrot 20} act of sustons Presiceot srvaing se 2 cae anne 60+ — “Cauldbe exerted topromety meet eons, ‘eagines comforaby a mest eo" 7p} completion stustons 60 —}— anus on tie and can be expected to Sit mos rotne Fl aes epors 9 Moderate 50} pres fornat. ‘isnt reguariy Pisindeaie oven go Couidbe eect to regulary be tn eturte ane needed ‘Sbmiting reed il sles reports. ial 2p oy ‘cold be epeted tobe try nd suit 20 —/— cert ed sles ports Vor ow 19} — could be ees to compre reo “nde rg Jor ‘oe at fring atest l eprts Gndunsccepue 001 Segara oul be expected o never file fit sales huey off Spars en tne an est any manages ‘sane to improve is tendeny ‘Slr eno1 key advange of ARS sytem th egue sle tanage to conser in de tail wade range of componens 6 lespersn jos performance mot al lade stemy defined anchors fr tos performance ene ie mee behavioral tt. enn ‘0 thoupifl consideration y anager of jus what compres pecormance OF sure ature b BARS emphasizes bhanor ane perfomance ahr hay efleciveness, When ied tn under wit pproprie objective mesures (ales prof analyser tn ouput np and mie mesures, BARS approach provider an eretv mean of banding subject ‘valuation cena and thus ponding as complete ptr spore fw elesperson ‘erlpecformance an sfetveret 'BARS systems are hl wou! he iatine, tough For ae ting, he ob-speeie rate ofthe ales thy win uggee they ae mou cis in alatingselespeope PsTurming vey slr mpi Tey might be eect m comparing oneal oe= oun! repo aroter national account re or wo lear represents eins each ates, ‘butte could ser major shoneomings Fused campare national ceoun fp against ‘eri salesperson becuse of diferenes in rexponabliis in hese potions, BARS systems aso ct be elatively cally develop ne they requir» pod deal wo lime frome male people 360-DEGREE FEEDBACK IN PERFORMANCE EVALUATION ‘As we lared in Capit 3, on imporant traction of CRM systems t firms ithe n- herent eapbilly of such sytem to provide feedback rom wide range of consents tnd sakes. Although he usage focus of mucho ht iformaion son product de> velopment and fermulatin othe overl marking mestge, CR eyes tpialy also facltte the gaberng analysis, and dieeminaion ofa prea eto normeton dec relevant ihe performance othe sles fee, In order fort sales organization to take al nvanage of th valle information gon rated by enters software suchas CRM, frm ab whole mon embrace the pilosa. iy thatthe cosomer isa customer ofthe comp, ot ja of the individu slesperson, ‘We ve seen nthe complex ane ofen lngy proceso evelopng and managing eus- ‘omer relationships alma always involves more thin ute alspeion end purchasing agent Ar eflecive CRM ester should be gaering das tel the important fouhpoints where members of sling ergeniato neat with members of «buying organization, 3c members af sling orgamanion Inerac nelly in ever fo frvare hanes relulonsip wit eustomer Such comprehensive information manegemeat process lows for rethinking ofthe ature of input et for use inslesperson performance evaluation. Rete tha eying on purely objective measures or on subjective measures generated by one person (he eles ‘anager, inforation for pecfornsnce eahation may came fm ultile sources simultaneously. This concept of 360-degree performance feedback opens the door to EW er in us the perfrmance ppl process ea effective too for aspeson evelopment an! improvement Amen the sOutss a feedback tht would be wef to Salespople are eaeral customer, intemal oranianoe membre who serv as resources In serving extemal eisfomers (is group is ofen refered o as internal customers), ‘tbr member of the salleperro' ling many diet opr theses manages ey have (such sles assstass), and of couse the sls manager" Inegraing fuck from these ané eer relevant soures of performanoeinfrmation int he formal evaluse sion proces and hus ont tbe evaluatos fon) ean prvide te impetus fot a mors pro= ductive dnlgue between the sles manager and slespeson when performance review time comes aroond(One tissu deserves mention rete o360-gre feedback—sel-evaluation, ‘Sales erancatons sould eneuragealespeape to epare an honest assesment of thet ‘vn performance aptnst the esabledobjestive an subjective performance enter end ths shou be prepared price to the frm pcfonmane review sssion withthe sales Tanager Te bes sles organiation we Us proceso begin te eilogue of sales unit osseting ‘or te next period ad especialy Yo eablish profesional development prove fo help mov the salesperson fovard the ullimen of his rhe personal goals on Thejou We leemed in Chaper 1! that ininsc renee are among the most powerful moivatre—hings sucha felings of accomplishment, persoral growth, and self-worth ‘Allowing th salesperson to ave crx iput io esablishing personal growth goals n the {tb and ten inctnaiving th ahivement of hose pols vs te formal performance ‘olantion process, goa lng way toward oovding « Wockplace amosphee in which Inns evade may be relized by salespeople Tis portent portant iva tlespeopedtecly.in all phases ofthe pefor- mance apr process, When apprils provide clearer, the enters meet with the "Rlespesons approval ané the spre ae perceived s fir and use it determining re ‘wars salesperson jb salstacton nesses, Thus, ba tical determinants of appraisal ef ‘etvenes av not prey citeri-diven but rather ae largely determined by appraisal] process fro: hat managers can inoeoe, suchas boyin by hose being epprased end faimes with which the appraise! pocts is edminseced * ‘At ol adage inhuman efouree manegemen holds that ian employee is surprised by anything he o sei ld during «formal performance review, the manager provid ing tbe evaluation it not dong very good job. Peformance evaluation should not be slip on atric even that happens periodically Such a view ean eause great tep/= Cation onthe part ofboth employees and managers, nd often results in managers procrastinating in conducting the review and minimizing the time spent with the ployee ducig the review In const, great sales organizations use the performance fvafunion process to faclitete ongoing ditlogue between salespeople and their managers The key goal ofthe proses shouldbe facilitating profesional an personal {evelopmene—providng the salesperson the feedback and tools necessary to achieve bis or her gous in the job. To make this hapeo, sles managers must be prepared to ‘ery onthe dialogue beyond jot the pevioae feral appraisal event end into dey-to- dy communication wit the slesperson, Imprtaly this developmental perspective on pecformance evaluation requires tat ales managers not just grve feedback but also listen sndespond to feedback and quesons forthe salesperson. Innovation 13.3.pro- ‘ides insight on how sles anager: can lie the performance evaluation meeting 10 ‘he salesperson benefit Ultimately, ales organizations need to work wovard developing » performance rmanagementsystem To doo reuze commitment to negating ll the elements of Feedback onthe prosat of serving customers that peformance information is timely, scene and revs the customer management aspects ofthe fr.° The pices ofthe peformance pale cinerea soc away tht he salesperson doesnot have 0 wat {nthe manager for formal valitation of perfomance Instead under a performance man “agement approach, elepeople take the lead in goal sting, performance measurement adjust of tis oom performance The concept of performance manager 1 halogous to TCM approaches tht aves the empowerment of employees take Ov= {ship oftheir on joke and cond thi ova analyses of perfomance apunst goal, re- ‘ng cleo” selFmanperen. To eveeefly implementa performance management ‘System, sales munagrs must si th ledrship se ott of parner in a muually ‘shared proses.get enn eo meh Sieemsameryzmeetes: cilten temnes sn reane Sees seer re he oe ie “spend the time Yopether focusig on the reasons be ~ +l Focirten seal “ing stale tht he of se ae ape eater co eee area See * et te sspeson tak fs. “ply ppl wt be. te fava bps Se : a ommraeues ote Sto ten pe tf ee cea : Stopes bali eougenet od ope egeer Sian gfe by oops oe eat Saee trince ‘Set noe maconeatiare aig imtcibos yn duty compen saan + ilptonapce aise ap pc Lo : . fc thew wk you lee“ an aeons ion, vies Speed eto mat ae ob bee?” Trashcan ‘nese cous Imre “Dat overaeln them MBPLACRK rman Imre he let wath aig i” Waterss Wren aan. STO AA REN MAKE YoU aE your oun ‘asap eae pat hey ou yo as io check 20 te proper. ‘ang trope 5 S08 838, formance and efTestivenes are dient concep. Performance ay te aught of ar @ sslesperion behavior von interme of conta ‘ion On the er han eetvenees ew xpnicon [sal leas partly reeponibl, uly examined aaron Solespele may be evaluated on the base of objenive abe eojectve ctrl, Objec- ve measures fle statistics sles manage: ca ata rom firm's inten dt nd bother means and may be ealegorized a output mesries (hers the efforts ex es (he efforts thy expend in achieving the ive measures alo may tke the form of asta sombie vais outputs Or inputs. On he other and, sbjctiv measures ply rely on personal rafuins of how the slepeson is doing, unl avowed by esl manager In ns ass, sales "anaget should pay atta to both objestie ang subjective measures in eluting Eslespeopl, ‘A varity af potent lil exist in performance measurement, atc wlizing subjective mses. Thee problems regent fa he form of wou eran o biases in the evaluate, which est in an isscurae performance appr that ie pereivad ight sl ani tte slesperon, Sls orunaton and her mays mus ake [eat cart ie tat the pfomnce elution pester condt i a and lea ar pose Uilzing340depe eek in he poorest inci sang open of semitone slespeson, an be ey ea Improving the wefuns of th perfomance eaintion pee. Summary