EVALUATING THE PERFORMANCE OF

SALESPEOPLE
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SALES QUOTA

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SALES QUOTA
 The company Ramayan, operating in India have a
target to sell INR 210,000,000 for a year.
 It divided the country where it exists into regions: (i)
Eastern Region (ii) Western Region (iii) Northern
Region (iv) Southern Region (v) Central Region. Sets
the target for region.
 It divides the regions into districts and decides the
target for the districts based on (i) environmental
factor (demand) (ii) organizational capability to supply
(iii) sales person capabilities.
 Potential Target for the Northern Region to be INR
57,031,000 for the year. 4
 SALES QUOTA
Salesperson’s for Potential
• Dividing the Districts
the Territory
States
Target (‘000) into States; (i) A (22391)
Ram
Laxman
A
B
8891
8730
(ii) B (23940)(iii) C
Bharat
B
6700
(3000) (iv) D(7700)
Satrughana C 3000 • Deploys sales person into
Dasrath A 8500 each states and determines
Ravan A 5000
Meghnath D 7700 their territory and
Kumbhkaran B 8510 target/quota for each
Potential for the entire
districts
57031 territory).
Target for the Entire Districts 10080
• This in turn becomes
benchmark for
evaluation of their 5
performance.
 SALES QUOTA
Salesperson’s Gross Margin
Potential Target Target Achieved Net
for the States from sales of 6 Expenses
(‘000) (‘000) Margin
Territory product type
Ram A 8891 1840 620.86 85 535.86
Laxman B 8730 1600 515.04 77.6 437.44
Bharat B 6700 1500 538.08 60.6 477.48
Satrughana C 3000 1300 450.36 61.8 388.56
Dasrath A 8500 1220 416.5 65.2 351.3
Ravan A 5000 1120 381.44 59.4 322.04
Meghnath D 7700 880 300.54 54.4 246.14
Kumbhkaran B 8510 620 205.1 41 164.1
Potential for the entire
57031 10080 505
districts
Target for the Entire
10080
Districts

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OTHER DETAILS/ASSUMPTIONS FOR THE
RAMAYAN COMPANY
 Average sales per salesperson in India is INR
2,040,000.
 Average sales per salesperson in the capital district is
INR 1,260,000.
 Average gross profit is 34%.

 Sales person get a commission of 2% on sales.

 Salary is 40, 32, 22, 28, 26, 30, 19, 40 resp.

 Other expenses are 8.2, 13.6, 8.6, 7.8, 14.8, 7, 17.8 and
14.6 resp.

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SALES QUOTA
 Based on quota achieved Ramayan can evaluate the
performance of its sales person.
 Assuming that you are the sales manager who is
entrusted with evaluating the performance of the
above sales people determine how would you evaluate
them?
 What action would you take based on your evaluation?

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SALES QUOTA
 Based on quota achieved Ramayan can evaluate the
performance of its sales person.
 Various ways of looking at the performance would be:
 Outcome/Results Based Evaluations:
1. Potential sales to Actual sales achieved. (%age)
2. Potential of the territory.
3. Expenses incurred to achieve the sales.
4. Profitability of the sales person against the sales
achieved. (%age)
5. Overall performance (1)*(3)
6. Rank them and accordingly decide their motivation,
training, compensation etc.
7. Benchmark according to industry standard and 9
determine if additional sales force may be needed to
deploy etc.
SALES TERRITORY AND SALES QUOTAS

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EVALUATION PARAMETERS

 Commitment by the sales manager to assist the sales

representative: Its important and is inferred from the
evaluation of sales people using quotas.
 Complexity of products sold: Moderate Complex
 Amount of workload based on the sales calls an
average sales person can make and the total sales
force needed is 28 in order to realize the full potential
of the states.

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CONCENTRATION OF BUSINESSES
WITHIN THE TERRITORY

%age of Sales Current

Sales Average
Salesperson States Sales potential reps effort
potential effort
realized needed level
Ram A 1840 8891 20.70% 2040 4 0.90
Dasrath A 1220 8500 14.35% 2040 4 0.60
Ravan A 1120 5000 22.40% 2040 2 0.55
Laxman B 1600 8730 18.33% 2040 4 0.78
Bharat B 1500 6700 22.39% 2040 3 0.74
Kumbhkaran B 620 8510 7.29% 2040 4 0.30
Satrughana C 1300 3000 43.33% 2040 1 0.64
Meghnath D 880 7700 11.43% 2040 4 0.43

•Growth of businesses within the territory

•Geographic size of the territory.
•Total sales reps needed is 28 considering the potential of the states.
•Is anyone working above the industry average of the sales effort a sales person can 12
make? No
PURPOSES OF SALESPERSON
PERFORMANCE EVALUATIONS
a. To ensure that compensation and other reward disbursements are
consistent with actual salesperson performance.
b. To identify salespeople that might be promoted.
c. To identify salespeople whose employment should be terminated and to
supply evidence to support the need for termination.
d. To determine the specific training and counseling needs of individual
salespeople and the overall salesforce.
e. To provide information for effective human resource planning.
f. To identify criteria that can be used to recruit and select salespeople in
the future.
g. To advise salespeople of work expectations.
h. To help salespeople set career goals.
i. To relate salesperson performance to sales organization goals.
j. To enhance communications between salesperson and sales manager.13
k. To improve salesperson performance.
THEORY OF SALES FORCE EVALUATION

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KEY ISSUES IN EVALUATING AND
CONTROLLING SALESPERSON PERFORMANCE

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PERSPECTIVES ON SALESPERSON
PERFORMANCE EVALUATION

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CRITERIA FOR PERFORMANCE
EVALUATION

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CRITERIA FOR PERFORMANCE
EVALUATION

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CRITERIA FOR PERFORMANCE
EVALUATION

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CRITERIA FOR PERFORMANCE
EVALUATION

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PERFORMANCE EVALUATION METHODS

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CHARACTERISTICS OF GOOD METHOD
1) Reliability: Stable over time and exhibit internal
consistency.
2) Validity: Provide accurate assessments of criteria they are
intended to measure.
3) Standardization: It should be similar throughout the
organization.
4) Practicality: Everyone should understand it and its
outcomes should help them implement improvement in
reasonable time.
5) Comparability: All individuals performance can be
compared.
6) Discriminability: Performance can be discriminated.
7) Usefulness: The information provided must be valuable to 22
the managers in making various decision.
PERFORMANCE EVALUATION METHODS

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GRAPHIC RATING/CHECKLIST EXAMPLE

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PERFORMANCE EVALUATION METHODS

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PERFORMANCE EVALUATION METHODS

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PERFORMANCE EVALUATION METHODS

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BARS EVALUATION EXAMPLE

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 PERFORMANCE EVALUATION BIAS
 Occurs when a manager’s 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.
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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.
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INDSALES
 It is industrial sales force job satisfaction.
 Given by: Childers, Terry L., Gilbert A. Churchill,
Jr., Neil M. Ford, Orville C. Walker, Jr, et al. 1980.
“Towards a More Parsimonious Measurement of Job
Satisfaction for the Industrial Salesforce.” In
Proceedings American Marketing Association., edited
by R.P. Bogazzi 344–9, Chicago: American Marketing
Association.
 It was very lengthy now in 2019 it had been reduced
to few and includes factors like pay, promotion, work,
customer, supervision, policy and coworkers.
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THANK YOU

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