Copyright 2006 by The McGraw-Hill Companies, Inc.

McGraw-Hill/Irwin
 Chapter 13

Evaluating Salesperson
Performance

McGraw-Hill/Irwin Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.
 Learning Objectives
Explain the difference between performance and
effectiveness.
Identify objective measures of salesperson performance,
both output and input.
Utilize ratio analysis as an objective approach to
salesperson performance measurement.
Discuss key issues related to subjective measurement of
salesperson performance and the forms that might be
used to administer such an evaluation.
Understand how a sales manager can make the
performance review process more productive and
valuable for the salesperson.

McGraw-Hill/Irwin 13-3 Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.
 Performance versus Effectiveness
Behavior what people do; the tasks on
which they expend effort
Performance behavior evaluated in
terms of its contribution to the goals of the
organization
Effectiveness some summary index of
organizational outcomes for which the
individual is at least partly responsible

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 Performance Evaluation Measures
Objective measures reflect statistics the
sales manager can gather from the firms
internal data
Output
Input
Ratios of output or input
Subjective measures rely on personal
evaluations by the sales manager and
others

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McGraw-Hill/Irwin 13-6 Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.
 Ratio Measures
Expense ratios
Account development and servicing ratios
Call activity and productivity ratios

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 Summary Equations

Sales = Days worked X Calls X Orders X Sales

Days worked Calls Orders
or

Sales = Days worked X Call rate X Batting X Avg.

avg. order
size

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 Typical Attributes on Appraisal
Forms
Sales results
Job knowledge
Management of territory
Customer and company relations
Personal characteristics

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 Problems with Subjective
Performance Measurement
Lack of an outcome focus
Ill-defined personality traits
Halo effect
Leniency or harshness
Central tendency
Interpersonal bias
Organizational uses influence

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 Avoiding Errors in Performance
Evaluation
Read the definition of each attribute thoroughly
before rating
Guard against tendency to overrate
Be as objective as possible
Do not permit your evaluation of one factor to
influence your evaluation of another
Base your rating on observed performance, not
potential abilities
Rate an employee on general success or failure
over the whole period
Have sound reasons for your ratings

McGraw-Hill/Irwin 13-11 Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.
 BARS Systems
Behaviorally anchored rating scale (BARS)
system concentrates on criteria the
individual can control
Requires sales managers to consider in
detail a wide range of components of job
performance
Requires clearly defined anchors for each
performance criteria

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McGraw-Hill/Irwin 13-13 Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.
 360-Degree
Performance Feedback
Integrates feedback from external
customers, internal customers, other
members of the selling team, the sales
manager, and the salesperson
Provides the impetus for a more
productive dialogue between the sales
manager and salesperson at performance
review time

McGraw-Hill/Irwin 13-14 Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.
 Performance Management System
Requires a commitment to integrating all
the elements of feedback on the process
of serving customers
Results in performance information that is
timely, accurate, and relevant to the firms
customer management initiative
Salespeople take the lead in goal setting,
performance measurement, and
adjustment of their own performance

McGraw-Hill/Irwin 13-15 Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.
 Key Terms
behavior
performance
effectiveness
attribution theory
objective measures
output measures
input measures
ratio measures
subjective measures
bias
outcome bias
BARS (behaviorally anchored rating scale)
360-degree performance feedback
internal customers
self-evaluation
performance management system

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 Mark W. Johnston Greg W. Marshall
Rollins College Rollins College
McGraw-Hill/Irwin 13-17 Copyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved.