1. Evaluating Salesperson Performance13
Evaluating Salesperson Performance

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. 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. 13.1 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
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6. Ratio Measures Expense ratios Account development and servicing ratios
Call activity and productivity ratios

7. Common ratios used to evaluate salespeople
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8. Common ratios used to evaluate salespeople
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9. Common ratios used to evaluate salespeople
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10. Summary Equations Sales = Days worked X Calls Orders or Call rate
Batting avg.
Avg. order size
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11. Typical Attributes on Appraisal Forms
Sales results
Job knowledge
Management of territory
Customer and company relations
Personal characteristics

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
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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. 13.2 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. 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. A BARS scale with behavioral anchors for the attribute “promptness in meeting deadlines”
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18. 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

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. 13.3 Effective Appraisals Preparation Appraisal interview
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