11

Module 11

Evaluating the Performance

of Salespeople

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Purposes of Salesperson
Performance Evaluations
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.
To determine the specific training and counseling needs of individual salespeople
and the overall salesforce.
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.
To motivate salespeople.
To help salespeople set career goals.
To improve salesperson performance.
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Salesperson Performance
Evaluation Approaches
General conclusions regarding evaluations:
Most occur annually.
Most combine input and output criteria which are evaluated using
quantitative and qualitative measures.
When used, performance standards or quotas are set in
collaboration with salespeople.
Territory data is used to establish objectives, which are assigned
different weights.
Multiple sources of information are used.
Immediate supervisor performs the evaluation.
Written review and personal discussion of the review are part of
the process used by most firms.
Copyright 2000 by Harcourt, Inc. All rights reserved. (3)

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Salesperson Performance Evaluation

360-Degree Feedback
(Exhibit 11.1)
Evaluation
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Copyright 2000 by Harcourt, Inc. All rights reserved. (4)

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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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Key Issues in Evaluating and

Controlling Salesperson Performance
Perspectives on Salesperson Performance
Evaluation
(Exhibit 11.2)

Outcome-based Perspective
Little monitoring of people
Little managerial direction of
salespeople
Straightforward objectives
measures of results

Behavior-based Perspective
Considerable monitoring of
salespeople
High levels of managerial
direction of salespeople
Subjective measures of
salesperson characteristics,
activities, and strategies
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Key Issues in Evaluating and

Controlling Salesperson Performance
Dimensions of Salesperson
Performance Evaluation
(Figure 11.1)

Behavioral

Results

Salesperson
Performance
Professional
Development

Profitability
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Key Issues in Evaluating and

Controlling Salesperson Performance
Criteria for Performance Evaluation

Behavioral Criteria
Consists of criteria related to activities
performed by individual salespeople
Sales calls, customer complaints, required
reports submitted, training meetings, letters and
calls

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Key Issues in Evaluating and

Controlling Salesperson Performance
Criteria for Performance Evaluation

Professional Development Criteria

Assess improvements in certain characteristics
of salespeople that are related to successful
performance in the sales job
Attitude, product knowledge, initiative and
aggressiveness, communication skills, ethical
behavior
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Key Issues in Evaluating and

Controlling Salesperson Performance
Criteria for Performance Evaluation

Results Criteria
Examine results achieved.
Sales(Volume/Quota), Accounts (Lost/New),
Market Share

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Results Criteria
Sales Quota
A reasonable sales objective for a territory,
district, region, or zone.

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Market Response Framework

(Figure 11.2)
Environmental
Factors

Control Unit
Attractiveness
Business Position

Salesperson
Factors

Characteristics
Role Perceptions
Aptitude
Skill Level
Motivation

Behavior

Effort
Quality

Planning and
Control Unit

Market
Response

Organizational
Factors

Marketing Effort
Sales
Management
Effort

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Elements Important in
Assigning Sales Quotas
(Exhibit 11.8)

Concentration of Businesses within the Territory

Geographic Size of Territory
Growth of Businesses within the Territory
Commitment by the Sales Manager to Assist the Sales
Representative
Complexity of Products Sold
Sales Reps 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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Key Issues in Evaluating and

Controlling Salesperson Performance
Criteria for Performance Evaluation

Profitability Criteria
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
Profit (Net/Gross), Orders (Order/call), Selling Expense
(Expense vs Budget)

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Key Issues in Evaluating and

Controlling Salesperson Performance
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
Consist of approaches where salespeople
are evaluated using some type of
performance evaluation form

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Performance Evaluation Methods

Ranking Methods
Rank all salespeople according to relative
performance on each performance criterion
rather than evaluating them against a set of
performance criteria

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Performance Evaluation Methods

Objective-Setting Methods
Management by Objectives (MBO)
Mutual setting of well-defined and measurable
goals with in a specified time period
Managing activities within the specified time
period toward the accomplishment of the stated
objectives

Evaluate performance against objectives

Exhibit 11.14 - Quota Evaluation Example

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Performance Evaluation Methods

Behaviorally Anchored Rating Scales (BARS)

(Figure 11.3)

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Performance Evaluation Bias

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Evaluating Team Performance

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Framework for Using

Performance Information
(Figure 11.4)
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
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Salesperson Job Satisfaction

Measuring Salesperson Job Satisfaction
Revised INDSALES Scale
Job, Co-Workers, Supervision, Company Policy and
Support, Pay, Promotion, Customers

Using Job Satisfaction Information

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