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6e SM Module10

Jan 10, 2016

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  • Evaluating the Performance of SalespeopleModule Ten

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Learning ObjectivesDiscuss 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.

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Learning ObjectivesCompare 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.

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Setting the StageWhat were the primary changes Prince made to the performance evaluation process? How did the changes impact City Wholesales sales force? Evaluating Salesperson Performance at City Wholesale

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Purposes of Salesperson Performance EvaluationsTo ensure that compensation and other reward disbursements are consistent with actual salesperson performanceTo identify salespeople that might be promotedTo identify salespeople whose employment should be terminated and to supply evidence to support the need for termination

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Purposes of Salesperson Performance EvaluationsTo determine the specific training and counseling needs of individual salespeople and the overall sales forceTo provide information for effective human resource planningTo identify criteria that can be used to recruit and select salespeople in the futureTo advise salespeople of work expectations

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Purposes of Salesperson Performance EvaluationsTo motivate salespeopleTo help salespeople set career goalsTo relate salesperson performance to sales organization goals.To enhance communications between salesperson and sales manager.To improve salesperson performance

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Salesperson PerformanceEvaluation Approaches: ConclusionsMost evaluate on an annual basis

    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

    Many assign weights to different objectives and incorporate territory data.

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Salesperson PerformanceEvaluation Approaches: ConclusionsMost use multiple sources of information

    Most are conducted by the field sales manager who supervises the salesperson

    Most provide a written copy of the review and personal discussion

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    360-Degree Feedback SystemSalesperson is evaluated by multiple raters

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

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Key Issues in Evaluating and Controlling Salesperson PerformanceOutcome-Based PerspectiveFocuses on objective measures of results with little monitoring or directing of salesperson behavior by sales managers

    Behavior-Based PerspectiveIncorporates complex and often subjective assessments of salesperson characteristics and behaviors with considerable monitoring and directing of salesperson behavior by sales managers

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Perspectives on Salesperson Performance EvaluationOutcome-Based

    Little monitoring of peopleLittle managerial direction of salespeopleStraightforward objectives measures of resultsBehavior-Based

    Considerable monitoring of salespeopleHigh levels of managerial direction of salespeopleSubjective measures of salesperson characteristics, activities, and strategies

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Dimensions of Salesperson Performance EvaluationBehavioralProfessionalDevelopmentResultsProfitabilitySalespersonPerformance

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Criteria for Performance EvaluationBehavior: Consists of criteria related to activities performed by individual salespeopleSales calls, customer complaints, required reports submitted, training meetings, letters and calls

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Criteria for Performance EvaluationProfessional 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

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Criteria for Performance EvaluationResults: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

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Market Response Framework

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Elements Important in Assigning Sales QuotasConcentration of businesses within the territoryGeographic size of the territoryGrowth of businesses within the territoryCommitment by the sales manager to assist the sales representativeComplexity of products sold

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Elements Important in Assigning Sales QuotasSales representatives past sales performanceExtent of product lineFinancial support (e.g., compensation) a firm providesRelationship of product lineAmount of clerical support

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Criteria for Performance EvaluationProfitability: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 ExamplesNet profit dollarsGross margin per saleReturn on investmentNumber of orders securedSelling expenses versus budget

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Performance Evaluation Methods: Characteristics any method should includeJob RelatednessReliabilityValidityStandardizationPracticalityComparabilityDiscriminabilityUsefulness

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Performance Evaluation MethodsGraphic 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

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Performance Evaluation Methods: Ranking MethodsRank all salespeople according to relative performance on each performance criterionThese methods force discrimination as to the performance of individual salespeopleMay be complexRankings only reveal relative performance evaluation

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Performance Evaluation Methods: Objective-Setting MethodsManagement By Objectives (MBO)

    Mutual setting of well-defined and measurable goals within a specified time period.Managing activities within the specified time period toward the accomplishment of the stated objectives.Appraisal of performance against objectives.

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Performance Evaluation Methods Behaviorally Anchored Rating Scales (BARS)Links behaviors to specific resultsSalespeople are used to develop performance results and critical behaviorsPositive feedback about behaviors may be more affective than positive output feedback

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Performance Evaluation BiasOccurs when a managers evaluation of a salesperson is affected by considerations other than the specified criteriaCommon sources of bias:Personal relationshipsPerceived difficulty of territoryOutcomes (i.e., ends justifies the means)

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Evaluating Team PerformanceConsider the criteria on which members will be evaluated and the methods used to evaluate performanceEstablish a link between team performance and positive outcomes to promote individual and team effortMay be beneficial to allow team to help develop goals and evaluation criteria

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Framework for UsingPerformance Information

    IngramLaForgeAvilaSchwepker Jr.WilliamsProfessional Selling: A Trust-Based ApproachModule 10: Evaluating the Performance of Salespeople

    Salesperson Job SatisfactionJob satisfaction related to turnover, absenteeism, motivation, and organizational commitmentJob satisfaction may be related to performance (direction of relationship is unknown)INDSALES may be used to measure job satisfactionResults may identify areas where manager may intervene to improve job satisfaction

    AnswersPrince changed the frequency of the review process from annually to quarterly. He also began asking the question What do you think were not doing?2. The more frequent evaluations improved communications and ultimately, improved salesperson performance.2223334678881213138121314151617181920