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13 Evaluating Salesperson Performance. 13-2 Performance versus Effectiveness  Behavior – what people do; tasks on which they expend effort  Performance.

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Presentation on theme: "13 Evaluating Salesperson Performance. 13-2 Performance versus Effectiveness  Behavior – what people do; tasks on which they expend effort  Performance."— Presentation transcript:

1 13 Evaluating Salesperson Performance

2 13-2 Performance versus Effectiveness  Behavior – what people do; tasks on which they expend effort  Performance – behavior evaluated in terms of contribution to organizational goals  Effectiveness –summary index of organizational outcomes for which individual is at least partly responsible

3 13-3 Performance Evaluation Measures  Objective measures – reflect statistics sales manager can gather from the firm’s internal data  Output  Input  Ratios of output or input  Subjective measures – rely on personal evaluations by sales manager and others

4 Attributions and Salesperson Performance Evaluation  Ability = Task difficulty/Effort  Performance = (Ability X Effort ± Task difficulty) Source: Thomas E. DeCarlo, Sanjeev Agarwal, and Shyman B. Vyas. “Performance Expectations of Salespeople: The Role of Past Performance and Casual Attributions in Independent and Interdependent Cultures.” Journal of Personal Selling & Sales Management 27 (Spring 2007) pp. 133–47l; Andrea L. Dixon, Lukas P. Forbes, and Susan M. B. Schertzer. “Early Success: How Attributions for Sales Success Shape Inexperienced Salesperson’s Behavioral Intentions.” Journal of Personal Selling & Sales Management 25 (Winter 2005) pp. 67–77; Andrea L. Dixon, and Susan M. B. Schertzer. “Bouncing Back: How Salesperson Optimism and Self-Efficacy Influence Attributions and Behaviors Following Failure.” Journal of Personal Selling & Sales Management 25 (Fall 2005) pp. 361–69.

5 13.1 Common output and input measures used to evaluate salespeople 13-5

6 13-6 Ratio Measures  Expense ratios  Account development and servicing ratios  Call activity and productivity ratios

7 Common ratios used to evaluate salespeople 13.2a 13-7

8 Common ratios used to evaluate salespeople 13.2b 13-8

9 Common ratios used to evaluate salespeople 13.2c 13-9

10 Summary Equations Sales=Days workedXCallsXOrdersXSales Days workedCallsOrders or Sales=Days workedXCall rateXBatting avg. XAvg. order size 13-10

11 13-11 Typical Attributes on Appraisal Forms  Sales results  Job knowledge  Management of territory  Customer and company relations  Personal characteristics

12 13-12 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

13 13.4 Sample of a poorly constructed subjective performance evaluation form 13-13

14 13-14 Avoiding Errors in Performance Evaluation  Read 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

15 Outcome Bias in Evaluations  Sometimes outcomes and processes leading to outcomes match, sometimes they do not  Evaluators tend to overlook process and rate performers based on outcomes  Relationship selling requires attention to behaviors that may or may not influence the bottom line for some time Source: For recent treatments on the outcome bias see: Nidhi Agrawal and Durairaj Maheswaran, “Motivated Reasoning Outcome Bias Effects,” Journal of Consumer Research 31(4), pp. 798–805; Philip J. Mazzocco, Mark D. Alicke, and Teresa L. Davis, “On the Robustness of Outcome Bias: No Constraint by Prior Culpability,” Basic and Applied Social Psychology 26(2/3), p. 131.

16 13-16 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

17 13.5 A BARS scale with behavioral anchors for the attribute “promptness in meeting deadlines” 13-17

18 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

19 13-19 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 firm’s customer management initiative  Salespeople take the lead in goal setting, performance measurement, and adjustment of their own performance

20 Effective Appraisals  Preparation  Reps rate themselves  Focus on their impact, needs, and goals  Appraisal interview  Discuss salary separately  Focus on own and rep’s preparation answers  Post-appraisal  Share formal review documents  Connect salary to appraisal issues Sources: "Three Steps to Great Performance Appraisals," Sellingpower Sales Management Newsletter, June 2007 "Are you missing an opportunity to motivate performance?" Sellingpower Sales Management Newsletter, 2008


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