2 Performance versus Effectiveness Behavior – what people do; tasks on which they expend effortPerformance – behavior evaluated in terms of contribution to organizational goalsEffectiveness –summary index of organizational outcomes for which individual is at least partly responsible
3 Performance Evaluation Measures Objective measures – reflect statistics sales manager can gather from the firm’s internal dataOutputInputRatios of output or inputSubjective measures – rely on personal evaluations by sales manager and others
4 13.1 Attributions and Salesperson Performance Evaluation Ability = Task difficulty/EffortPerformance = (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 Ratio Measures Expense ratios Account development and servicing ratios Call activity and productivity ratios
10 Summary Equations Sales = Days worked X Calls Orders or Call rate Batting avg.Avg. order size13-10
11 Typical Attributes on Appraisal Forms Sales resultsJob knowledgeManagement of territoryCustomer and company relationsPersonal characteristics
12 Problems with Subjective Performance Measurement Lack of an outcome focusIll-defined personality traitsHalo effectLeniency or harshnessCentral tendencyInterpersonal biasOrganizational uses influence
13 13.4Sample of a poorly constructed subjective performance evaluation form13-13
14 Avoiding Errors in Performance Evaluation Read definition of each attribute thoroughly before ratingGuard against tendency to overrateBe as objective as possibleDo not permit your evaluation of one factor to influence your evaluation of anotherBase your rating on observed performance, not potential abilitiesRate an employee on general success or failure over the whole periodHave sound reasons for your ratings
15 13.2 Outcome Bias in Evaluations Sometimes outcomes and processes leading to outcomes match, sometimes they do notEvaluators tend to overlook process and rate performers based on outcomesRelationship selling requires attention to behaviors that may or may not influence the bottom line for some timeSource: 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 BARS SystemsBehaviorally anchored rating scale (BARS) system concentrates on criteria the individual can controlRequires sales managers to consider in detail a wide range of components of job performanceRequires clearly defined anchors for each performance criteria
17 A BARS scale with behavioral anchors for the attribute “promptness in meeting deadlines” 13.513-17
18 360-Degree Performance Feedback Integrates feedback from external customers, internal customers, other members of the selling team, the sales manager, and the salespersonProvides the impetus for a more productive dialogue between the sales manager and salesperson at performance review time
19 Performance Management System Requires a commitment to integrating all the elements of feedback on the process of serving customersResults in performance information that is timely, accurate, and relevant to the firm’s customer management initiativeSalespeople take the lead in goal setting, performance measurement, and adjustment of their own performance
20 13.3 Effective Appraisals Preparation Appraisal interview Reps rate themselvesFocus on their impact, needs, and goalsAppraisal interviewDiscuss salary separatelyFocus on own and rep’s preparation answersPost-appraisalShare formal review documentsConnect salary to appraisal issuesSources: "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