Evaluating The Performance of Salespeople

Evaluating the Performance
of Salespeople
Learning Objectives
1.
2.
3.
Discuss the different purposes of salesperson

performance evaluations.
Differentiate between an outcome-based and a
behavior-based perspective for evaluating and
controlling salesperson performance.
Describe the different types of criteria necessary
for comprehensive evaluations of salesperson
performance.
Professional Selling:
A Trust-Based Approach
Module 10:
Evaluating the Performance of Salespeople
Ingram
LaForge Avila
Schwepker Jr. Williams
Learning Objectives
4.
5.
6.
Compare the advantages and disadvantages of

different methods of salesperson performance
evaluations.
Explain how salesperson performance
information can be used to identify problems,
determine their causes, and suggests sales
management actions to solve them.
Discuss the measurement Importance of
salesperson job satisfaction.
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Setting the Stage

Evaluating Salesperson
Performance at City Wholesale
1. What were the primary changes Prince
made to the performance evaluation
process?
2. How did the changes impact City
Wholesales sales force?
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Purposes of Salesperson
Performance Evaluations
1.
2.
3.
To ensure that compensation and other

reward disbursements are consistent with
actual salesperson performance
To identify salespeople that might be
promoted
To identify salespeople whose employment
should be terminated and to supply evidence
to support the need for termination
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4.
5.
6.
7.
To determine the specific training and

counseling needs of individual salespeople
and the overall sales force
To provide information for effective human
resource planning
To identify criteria that can be used to
recruit and select salespeople in the future
To advise salespeople of work expectations
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8. To motivate salespeople
9. To help salespeople set career goals
10. To relate salesperson performance to sales
organization goals.
11. To enhance communications between
salesperson and sales manager.
12. To improve salesperson performance
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Salesperson Performance
Evaluation Approaches: Conclusions
1.
Most evaluate on an annual basis
2.
Most combine input and output criteria which

are evaluated using quantitative and
qualitative measures
3.
When used, performance standards or quotas

are set in collaboration with salespeople
4.
Many assign weights to different objectives

and incorporate territory data.
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Salesperson Performance
Evaluation Approaches: Conclusions
5.
Most use multiple sources of information
6.
Most are conducted by the field sales

manager who supervises the salesperson
7.
Most provide a written copy of the review and

personal discussion
Module 10:
Ingram
LaForge Avila
360-Degree Feedback System
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Module 10:
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Ingram
LaForge Avila
Key Issues in Evaluating and

Controlling Salesperson Performance
Outcome-Based Perspective
Focuses on objective measures of results with little
monitoring or directing of salesperson behavior by
sales managers
Behavior-Based Perspective
Incorporates complex and often subjective
assessments of salesperson characteristics and
behaviors with considerable monitoring and directing
of salesperson behavior by sales managers
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Perspectives on Salesperson
Performance Evaluation
Outcome-Based
Behavior-Based
Little monitoring of
people
Little managerial
direction of salespeople
Straightforward
objectives measures of
results
Considerable monitoring
of salespeople
High levels of managerial
direction of salespeople
Subjective measures of
salesperson
characteristics, activities,
and strategies
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Dimensions of Salesperson
Performance Evaluation
Behavioral
Behavioral
Results
Results
Salesperson
Salesperson
Performance
Performance
Professional
Professional
Development
Development
Profitability
Profitability
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Criteria for Performance Evaluation

Behavior: Consists of criteria related to
activities performed by individual salespeople
Sales calls,
customer complaints,
required reports submitted,
training meetings,
letters and calls
Should not only address activities related to shortterm sales generation but should also include nonselling activities needed to ensure long-term
customer satisfaction.
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Professional Development:
Assess improvements in certain characteristics of
salespeople that are related to successful
performance in the sales job
Characteristics include - Attitude, product
knowledge, initiative and aggressiveness,
communication skills, ethical behavior
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Results:
Salespeople measured objectively based on
results such as sales, market share, and
accounts
A sales quota represents a reasonable sales
objective for a territory, district, region, or zone
Some research shows that rewards for achieving
results have a negative effect on performance and
satisfaction
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Market Response Framework

Environmental
Factors
Control Unit
Attractiveness
Business
Position
Salesperson
Factors
Characteristics
Role
Perceptions
Aptitude
Skill Level
Motivation
Behavior
Effort
Quality
Planning
and Control
Unit
Behavior
Effort
Quality
Organizational Factors
Marketing Effort
Sales Management Effort
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Elements Important in
Assigning Sales Quotas
Concentration of businesses within the
territory
Geographic size of the territory
Growth of businesses within the territory
Commitment by the sales manager to assist
the sales representative
Complexity of products sold
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Elements Important in
Assigning Sales Quotas
Sales representatives past sales performance
Extent of product line
Financial support (e.g., compensation) a firm
provides
Relationship of product line
Amount of clerical support
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Profitability:
Salespeople have an impact on gross profits
through the specific products they sell and/or
through the prices they negotiate for final sale.
Salespeople affect net profits by the expenses they
incur in generating sales.
Criteria Examples
Net profit dollars

Gross margin per sale
Return on investment
Number of orders secured
Selling expenses versus budget
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Performance Evaluation Methods:

Characteristics any method should include
Job Relatedness
Reliability
Validity
Standardization
Practicality
Comparability
Discriminability
Usefulness
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Performance Evaluation Methods

Graphic Rating/Checklist Methods
Salespeople are evaluated using some type of
performance evaluation form
Especially useful in evaluating behavioral and
professional development criteria
May be filled out by customers
Disadvantage is providing evaluations that
discriminate sufficiently
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Ranking Methods
Rank all salespeople according to relative
performance on each performance criterion
These methods force discrimination as to the
performance of individual salespeople
May be complex
Rankings only reveal relative performance
evaluation
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Objective-Setting Methods
Management By Objectives (MBO)
1.
Mutual setting of well-defined and measurable

goals within a specified time period.
2.
Managing activities within the specified time

period toward the accomplishment of the stated
objectives.
3.
Appraisal of performance against objectives.
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Performance Evaluation Methods

Behaviorally Anchored Rating Scales (BARS)
Links behaviors to
specific results
Salespeople are used to
develop performance
results and critical
behaviors
Positive feedback about
behaviors may be more
affective than positive
output feedback
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Performance Evaluation Bias
Occurs when a managers evaluation of a

salesperson is affected by considerations other
than the specified criteria
Common sources of bias:
Personal relationships
Perceived difficulty of territory
Outcomes (i.e., ends justifies
the means)
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Evaluating Team Performance

Consider the criteria on which members will
be evaluated and the methods used to
evaluate performance
Establish a link between team performance
and positive outcomes to promote individual
and team effort
May be beneficial to allow team to help
develop goals and evaluation criteria
Module 10:
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Framework for Using

Performance Information
Evaluate Salespeople against Relevant Performance Criteria
Compare Salesperson Evaluations to Identify Problem Area
Investigate Problem Areas to Identify Causes of Performance Problems
Determine Sales Management Actions to Eliminate Causes of Future

Problems and to Solve Existing Problems
Module 10:
Ingram
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Salesperson Job Satisfaction

Job satisfaction related to turnover, absenteeism,
motivation, and organizational commitment
Job satisfaction may be related to performance
(direction of relationship is unknown)
INDSALES may be used to measure job
satisfaction
Results may identify areas where manager may
intervene to improve job satisfaction
Module 10:
Ingram
LaForge Avila

Evaluating The Performance of Salespeople

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Evaluating the Performance

Discuss the different purposes of salesperson

Compare the advantages and disadvantages of

Setting the Stage

To ensure that compensation and other

To determine the specific training and

Most evaluate on an annual basis

Most combine input and output criteria which

When used, performance standards or quotas

Many assign weights to different objectives

Most use multiple sources of information

Most are conducted by the field sales

Most provide a written copy of the review and

360-Degree Feedback System

Key Issues in Evaluating and

Criteria for Performance Evaluation

Criteria for Performance Evaluation

Criteria for Performance Evaluation

Market Response Framework

Criteria for Performance Evaluation

Net profit dollars

Performance Evaluation Methods:

Performance Evaluation Methods

Performance Evaluation Methods:

Performance Evaluation Methods:

Mutual setting of well-defined and measurable

Managing activities within the specified time

Appraisal of performance against objectives.

Performance Evaluation Methods

Performance Evaluation Bias

Occurs when a managers evaluation of a

Evaluating Team Performance

Framework for Using

Compare Salesperson Evaluations to Identify Problem Area

Investigate Problem Areas to Identify Causes of Performance Problems

Determine Sales Management Actions to Eliminate Causes of Future

Salesperson Job Satisfaction

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