Chapter 16

Evaluating and Controlling

Salespeople
WHY EVALUATE SALESPEOPLE?

 To link compensation and rewards to performance.

 To identify salespeople capable of promotion
 To identify salespeople to be retrenched
 To identify training and counseling needs
 To identify criteria for recruitment and selection
 To clarify work expectations
 To motivate salespeople.
 To help salespeople set career goals.
 PERFORMANCE
EVALUATION PROCESS

1.Identify key performance measures

2.Set specific standards of performance for
salespeople
3.Monitor actual performance versus
preset standards
4.Provide individual performance
evaluation feedback to each sales
representative
 Set goals and objectives for
sales force, including:
Revenues
Contribution profits
Market share
Expense ratios

Design sales plan

Set product performance standards for:

Organization Salespeople
Regions Accounts
Districts

Measure results against

Take Corrective Action
standard
 QUALITIES OF A WELL-
RUN SALES FORCE

 Product/technical
Reputation of company
knowledge
among its customers
 Ability to
Quality ofhold
training
old accounts
 Qualityto
Ability management
open new accounts
team
 Ability to meet
keep top
salessalespeople
targets
 Innovativeness with clients
Communication
 PERFORMANCE
STANDARDS

 Planned achievement levels that the firm

expects to reach throughout the year.
 PERFORMANCE
STANDARDS

Performance Standards should be:

 equitable and reasonable

 varied
 critical to success on the job
 based on inputs and outputs (outcomes)
 ASSESSING
PERFORMANCE

 Measure inputs (effort, number of sales

calls, number of proposals…)
 Measure outputs (sales, profitability)
 The outcome-based perspective looks at
outputs only
 The behavioral-based perspective
consists of measuring both inputs and
outputs.
 ASSESSING
PERFORMANCE
Input-based System Output-based System

Behavior Results
Calls Sales revenues
Reports Sales growth
Complaints Salesperson Sales/quota
Demonstrations Evaluation Sales/potential
Dealer meetings New accounts
Display set up Contribution margins
Travel/entertainment Contribution
expenses percentage

Professional Results Profitability

Behavior
Development
PERFORMANCE FACTORS
Inputs

 Number of Sales Calls

Daily call rate can be measured against

company averages/predetermined standard
 PERFORMANCE FACTORS
Inputs

 Number of Sales Calls

 Selling Expenses

Selling expenses may be compared to a

company standard
PERFORMANCE FACTORS
Outputs

 Sales Volume
 PERFORMANCE FACTORS
Outputs

 Sales Volume

Must relate volume figures to

predetermined standards of acceptable
performance.
PERFORMANCE FACTORS
Outputs

 Sales Volume
 Market Share
 PERFORMANCE FACTORS
Outputs

 Sales Volume
 Market Share

Figured by:
Representative’s Sales Volume
Territorial Market Potential
PERFORMANCE FACTORS
Outputs

 Sales Volume
 Market Share
 Gross Profit
 PERFORMANCE FACTORS
Outputs

 Sales Volume
 Market Share
 Gross Profit

A salesperson’s direct contribution to profit

is a logical yardstick for evaluating
performance.
PERFORMANCE FACTORS
Outputs

 Sales Volume
 Market Share
 Gross Profit
 Batting Average
PERFORMANCE FACTORS
Outputs

 Sales Volume
 Market Share
 Gross Profit
 Batting Average
Number of orders received
Number of calls made
 PERFORMANCE FACTORS
Outputs
 Sales Volume
 Market Share
 Gross Profit
 Batting Average
 Routing Efficiency
 PERFORMANCE FACTORS
Outputs
 Sales Volume
 Market Share
 Gross Profit
 Batting Average
 Routing Efficiency
# of miles traveled
# of calls made
 PERFORMANCE FACTORS
Outputs

Sales to Account = Dollar Sales _

# Accounts
Average Order Size = Dollar Sales
# Orders
Growth Ratio = # New Accounts
Total # Accounts
Account Success = Accounts sold_
Total # Accounts
OUTPUT MEASURES USED
 A GOOD EVALUATION
SYSTEM

 Job Related
 Reliable
 Valid
 Standardized
 Practical
 Allow for comparability
 Useful
 EVALUATING
PERFORMANCE
 Written Essays
 Critical Incidents
 Rating Scales
 Ranking
» Group Order Ranking
» Individual Ranking
» Paired Comparisons
 Behaviorally-Anchored Rating Scales
(BARS)
 POTENTIAL EVALUATION
PROBLEMS

 Single Criterion
 POTENTIAL EVALUATION
PROBLEMS

 Single Criterion

Employees evaluated on a single job

criterion
 POTENTIAL EVALUATION
PROBLEMS

 Single Criterion
 Leniency Error
 POTENTIAL EVALUATION
PROBLEMS

 Single Criterion
 Leniency Error

Evaluators mark differently:

– Mark high (Positive leniency error)
– Mark low (Negative leniency error)
 POTENTIAL EVALUATION
PROBLEMS

 Single Criterion
 Leniency Error
 Halo Effect
 POTENTIAL EVALUATION
PROBLEMS

 Single Criterion
 Leniency Error
 Halo Effect

Allowing the assessment of an individual on

one trait influence evaluation of that
person
on other traits
 POTENTIAL EVALUATION
PROBLEMS

 Single Criterion
 Leniency Error
 Halo Effect
 Similarity Error
POTENTIAL EVALUATION
PROBLEMS

 Single Criterion
 Leniency Error
 Halo Effect
 Similarity Error

Giving special consideration to those who

have qualities that they perceive in
themselves.
 OVERCOMING
EVALUATION PROBLEMS

 Use multiple criteria

 De-emphasize personality traits and
other qualitative measures
 Use multiple evaluators
 Train evaluators
 QUALITATIVE MEASURES
USED IN EVALUATIONS

Source: Donald W.Jackson, John L. Schlacter, and William G. Wolfe, “Examining the Bases Utilized for
Evaluating Salespeoples’ performance,” Journal of Personal Selling & Sales Management, Vol. 15, No. 4 (Fall
1995), p. 63.
 MEASURING QUALITY OF
RELATIONSHIPS

 Customers rate salesperson:

– adding value
– diagnosing problems
– providing solutions
– monitoring the account
– managing the relationships
DISCUSSING EVALUATIONS

 Prepare, prepare, prepare!

 TEAM EVALUATIONS

Establish a link between team performance

and outcomes in order to promote
individual and team effort. Use:
 Team Work
 Team Leadership
 Team Productivity
 Team Relations
 Team Communications
 FROM THE TEXT

 Read Chapter 16 except

– Four Factor Model (775/776)
– Multiple Regression Models (777/778)
– Performance Matrix (778/779)