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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
years 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
years 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
evaluation

of

salespersons

performance

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

Helps salespeople
better understand
their ability to add
value to their
organization and
their customers

Sales Manager
Evaluation

Salesperson is
evaluated by
multiple raters

Salesperson

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 /
outcome bases / criteria
Sales volume
In value / units
Percentage of quota
by products &
segments
Accounts / customers
New accounts nos.
Lost accounts nos.

Quantitative efforts /
Qualitative efforts /
behavioural bases / criteria behavioural bases / criteria
Customer calls
No. of calls per day
No. of calls per
customer
Non-selling activities
overdue payments
collected
No. of reports sent

Personal skills
Selling skills
Planning ability
Team player
Personality & Attitudes
Cooperation
Enthusiasm

Performance standards are also called sales goals,


targets, sales quotas, sales objectives
Performance standards for quantitative results are
related to the companys 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

Salespersons 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 salespersons 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
companys sales / marketing strategies
If a salespersons 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 Sureshs 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.

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