1. Sales Force Performance Evaluation
Chapter 14
Sales Force Performance Evaluation
PowerPoint presentation prepared by
Dr. Rajiv Mehta
New Jersey Institute of Technology

2. Chapter Outline Sales Force Performance Appraisal
A Contemporary Approach to Sales Force Performance Evaluation
Providing Feedback and Improving Sales Force Performance
Emerging Perspectives in Twenty-First Century Sales Force Performance Appraisals

3. Learning Objectives
After reading this chapter, you should be able to do the following:
1. Carry out the sales force performance evaluation process using the outcome-based, behavior-based, and professional development measures.
2. Establish different types of sales goals and objectives, and develop the sales plan.
3. Set sales force performance standards.
4. Allocate resources and efforts through sales quotas.
5. List the major steps in the sales force performance evaluation monitoring system (PEMS).
6. Provide feedback and evaluation and improve sales force performance.
7. Apply twenty-first century sales force performance appraisal methods.

4. Sales Force Performance Appraisal
A salesperson performance appraisal is a systematic process for establishing whether the salesperson’s job behavior contributes to the fulfillment of a firm’s sales objectives and for providing specific feedback to the individual.

5. Sales Force Performance Appraisal
Performance appraisals can help managers accomplish the following:
increase/decrease compensation and awards to high/low performers
identify training needs of salespeople
mentor salespeople about their careers
revise sales performance and evaluation process
develop a top notch sales team

6. Challenges in Salesperson Performance Appraisals
Evaluating salespeople is challenging because they encounter the following hurdles:
mostly work alone in the field
engage in a multitude of activities
have differences in territory potentials
have physical disparities in their territories
face intense, varying competition
have to allocate their time between account development and account maintenance
need sufficient time to adjust to their assigned territories
Source: © Jack Hollingsworth/Corbis

7. Timing of Salesperson Performance Appraisals
Performance appraisals are usually conducted over these intervals:
once a year
sometimes semiannually
sometimes quarterly
Evaluations include two kinds of criteria:
objective (quantitative) criteria
subjective (qualitative) measures
Source: © Jack Hollingsworth/Corbis

8. A Contemporary Approach to Sales Force Performance Evaluation
Establish sales goals
and objectives.
Set sales force
performance standards.
Allocate resources
and sales force efforts.
Measure sales force
performance against standards.
Develop the sales plan.
Take corrective action.

9. Establish Sales Goals and Objectives
Formulate sales goals, such as these:
increasing sales by 5 percent each year over the next five years
increasing market share by 4 percent by the next five years
reducing customer defections by 12 percent
increasing the new customer base by 10 percent each year
Source: Flying Colours Ltd

10. Articles on Sales Force Performance Evaluation
Read various articles on sales performance at

11. Develop the Sales Plan
“How much progress are we making toward our destination?”
set standards of performance
evaluate actual performance versus planned standards
take corrective action on variances from plan
“Where are we now?”
market situation and competitive environment
product sales situation
“Where do we want to go?”
internal environment
external environment
planning assumptions and constraints
sales forecasts
contingency planning
“What’s the best way to get there?”
strategies and tactics

12. Sales Force Performance Evaluation

13. Sales Force Performance Standards
To coach your sales team to improved productivity and learn about guidelines and various criteria that can be used in conducting sales performance evaluations visit

14. Types of Sales Quotas

15. Administration of Sales Quotas

16. Sales Force Performance Evaluation Using Sales Quotas
To see a video on sales quota management, go to

17. Measure Sales Force Performance Against Standards

18. Websites of Firms Specializing in Sales Force Performance Evaluation
Peruse the websites of various firms that specialize in conducting sales force appraisals, at

19. Types of Performance Appraisal Techniques

20. Graphic Rating Scales Semantic differential graphic rating scale
product knowledge
poor ___ ___ ___ ___ ___ _X_ ___ excellent
Likert-type graphic rating scale
product knowledge
____________ _______ ___X__ ______ __________
unsatisfactory below average above outstanding
average average

21. Behaviorally Anchored Rating Scales
Cooperation with sales team members
Categories of performance
Observed behavior 10
Very high
indicates strong willingness to cooperate with other members of the sales team
Salesperson will always cooperate in any way with other sales force team members, even if such effort is personally inconvenient or requires self-sacrifice. 9 8
Salesperson can be expected to go out of his or her way to help other team members with any work-related problem. 7
Moderate
indicates an average amount of cooperation with other team members 6
Salesperson is usually willing to help other team members on field sales problems. 5 4
Salesperson will occasionally help team members with field sales problems 3
Very low
indicates generally no team effort, which often hurts group performance
Salesperson seldom helps others and tends to resent contributing to group effort. 2 1
Salesperson is generally antagonistic toward other team members and frequently undercuts group efforts.

22. Management by Objectives
Step 1
Set sales objectives.
Step 4
Conduct annual performance evaluation of salespeople.
Planning phase
Control phase
Modify and adjust
MBO cycle
Step 2
Develop sales plans and implement them.
Step 3
Periodically monitor performance and alter sales tactics to stay on track.

23. Limitations of Sales Force Evaluation Systems
stereotyping
contrast error
similar-to-me error
first-impression error
leniency or harshness error
central tendency error
escalation of commitment error
fundamental attribution error
self-serving bias
central tendency
Source: Stockbyte

24. Limitations of Sales Force Evaluation Systems
political concerns
fear of reprisal
varying evaluation standards
interpersonal bias
questionable personality traits
organization use
recency bias
no outcome focus
inadequate sampling of job activities
Source: Stockbyte

25. Sales Force Performance Evaluation
To see a video on tools for salespeople to individually manage their own sales performance, go to

26. Emerging Perspectives in Twenty-first Century Sales Force Performance Appraisals: 360-Degree Performance Evaluation
Sales
subordinates
Accounts payable managers
Self-
appraisal
manager
Sales team
peers
Purchasing managers (clients)
360-degree
salesperson
performance
Internal customers
External customers
Other departmental coworkers

27. Effective Sales Performance Evaluation
To see a video on evaluating sales force performance by measuring customer satisfaction—an aspect of 360-degree performance—and employee satisfaction, which are drivers of financial performance, go to

28. Software for Conducting Sales Force Performance Evaluations
Peruse the following website to learn about software for sales force performance evaluations at
Test drive Solution Selling Software, a sales performance assessment tool, at

29. Sales Force Performance Appraisals: Performance Evaluations of Team Selling
In cooperation, sales managers and sales force team members select relevant performance criteria and appraisal methods.
Each team member rates all the other members on the following:
teamwork
leadership
productivity
team relations
Source: Stockbyte

30. Emerging Perspectives In Twenty-First Century Sales Force Performance Appraisals: Performance Review Ranking System
Evaluate salespeople on performance using a scale, such as this:
A = excellent
B = above average
C = average
D = satisfactory performance
E = sub-par performance
Then rank each salesperson and place them in performance categories:
top 20 percent
middle 70 percent
bottom 10 percent
Move out the bottom performers with new talent, thus creating meritocracies.
Source: Stockbyte

31. Ethical Situation: What Would You Do?
Discussion Question
You are one of six regional sales managers for a large manufacturer of consumer products. About ten district sales managers report to each one of the regional sales managers. This year, your national sales manager is requiring all the company’s sales managers to use a Likert-type performance evaluation scale to rate each of their subordinates on various dimensions. The evaluation scale has five performance blocks or segments labeled: outstanding, above average, average, below average, and poor. Knowing that these evaluations will be used for current raises and bonuses, and promotions over the longer run, you plan to rate all the district sales managers reporting to you as at least “above average” and some “outstanding.” In all honesty, you know that four of your district managers should be rated no better than “average,” but you don’t want to hurt their chances for raises, bonuses, and promotion, so you just don’t use the bottom three segments of the evaluation scale. By rating your people higher than they should be, you feel that you retain their loyalty and support while keeping morale higher than it would be if your performance evaluations were more accurate. You rationalize this evaluation approach to yourself by asking: “Who gets hurt if I rate my people on the high side? Other regional sales managers probably do the same thing.”