Step 3: Establish Performance Standards

 Performance standards for quantitative output or results have a close

relationship with the company's sales forecast or sales budget and quotas for
territories, regions, branches, products, and salespeople.
 This is because the sales quotas are derived from the company's sales budget,
which depends on the company's sales forecast.
 Sales managers must ensure that Performance standards are fair and
reasonable. They should not be too high or too low.
Step 4:Compare Actual Performance
with Standards
Periodically, sales managers are required to evaluate the performance Of
each salesperson in a permanent record for the benefit of the salesperson in
tracking his/her progress. For this, Various types of evaluation methods are
used which are as follows:
 Graphic Rating
 Ranking
 Behaviorally anchored rating Scale(BARS)
 Management by Objectives(MBO)
 Descriptive Statements
 Graphic Rating

 Itis particularly, useful in evaluating salespeople's qualitative

behavioral or efforts related criteria.
 Graphicrating scale has many characteristics, such as
comparability ,Job relatedness , practicality and standardization.
 The main disadvantage of this method is that it is not capable of
detecting differences adequately in 'performance of individual
salespeople or among the performances on different criteria for
the same salesperson.
Graphic Rating(Example)
Ranking Method

 This method ranks ,all salespeople according to the relative

performance on a Performance criterion.
 The advantages of ranking Method are that it forces
discrimination in performance of salespeople on each
criterion, and provides a standardized approach to
evaluation.
 Itis not useful for decision-making. It has less practicality
and it is difficult to assess differences between ranks.
Behaviorally Anchored Rating
Scales(BARS)
This Method is a repetitive Process and allows different sales managers
to arrive at more consistent and Objective evaluations, since the rating
scales have similar interpretations. The four different steps involved are
as follows:
 Identify Decisive Events
 Improve Decisive Events into Behavior Anchor Statements
 Rate the Effectiveness of the Behavioral Statements
 Select the Behavioral and Anchor Statements For Performance
dimension.
BARS(Example)
Management by Objectives(MBO)

The most common and comprehensive goal setting and results-based

evaluation method is the MBO method. Steps followed in a typical
MBO method are as follows:
 The sales manager and the salesperson discuss and set sales quotas
for specific time period.
 They also prepare action plan for the achievement of the objectives
 They review actual performance periodically against the stated
objectives
Descriptive Statements

 Inthis method of performance evaluation, sales managers are required to

write either a short or detailed description of each salesperson's
performance on specific criteria.
 Thesecriteria or bases vary from company to company, but some of the
commonly used criteria's are: goal attainment, selling ability, territorial
management, job/product knowledge, and customer relations.
 Another method, used by some organizations, includes writing a profile
about the individual salesperson's specific performance, abilities, and
potential.