KKN India Ltd.

Sales force performance Evaluation

Presented by:- Ketan ThakurNikhil mehendruJaykishan lauhana

Introduction to the case:-

Regional sales manager(western region) asked for maximum annual Increments to the general manager(sales) for the highest contributed by his sales team.

The sales manager appreciate their performance and should be suitably rewarded, but that does not mean salespeople from other regions are not performing well.

Method used for evaluation is the comparison of actual sales with previous year’s sales and the market potential was not considered when the quotas were established.

Western region have given the maximum sales growth of 25 percent against the total growth of 15 percent .

Performance evaluation method in KKN India Ltd.

Sales force performance evaluation in company include sales result but not the effort of the salespeople .

No individual performance measure technique is used.

Performance evaluation method compares the actual sales with the previous year’s sales ,and the market potential was not considered when the sales quotasWere established.

Inconsistency in measuring performance.

Purposes of Salesperson Performance Evaluations I

1. To ensure that compensation and other reward disbursements are consistent with actual salesperson performance

2. To identify salespeople that might be promoted

3. To identify salespeople whose employment should be terminated and to supply evidence to support the need for termination

Purposes of Salesperson Performance Evaluations II

4. To determine the specific training and counseling needs of individual salespeople and the overall sales force

5. To provide information for effective human resource planning

6. To identify criteria that can be used to recruit and select salespeople in the future

The steps involved in the procedure are: Set policies on performance evaluation and

control Decide bases of salespersons’ performance

evaluation Establish performance standards Compare actual performance with the standards Review performance evaluation with salespeople Decide sales management actions and controlWe shall describe above steps briefly

Procedure for Evaluating and Controlling Sales force Performance

Most companies establish basic policies. Examples are:

• Frequency of evaluation. Mostly once a year.• Who conducts evaluation? Mainly immediate

supervisor• Assessment techniques to be used. E.G.

Management by objectives (MBO), 360-degree feedback

• Sources of information. Sales analysis, new business reports, lost business reports, call plans, etc

• Bases of sales force evaluation. (next slide)• Conducting performance review sessions with

salespeople

Set Policies on Performance Evaluation & Control

BARS

Salesperson

360-Degree Feedback System

• Salesperson is evaluated by multiple raters

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

Internal Customers

EvaluationExternal Customers

Evalua

tion

Ones

elf

Evaluation

Sales Manager

Evaluation

Team Mem

bers

Evaluation

Decide Bases for Salespersons’ Performance Evaluation

A firm should decide which of the following bases / criteria it would use: (1) result / outcome based, (2) efforts / behavioural based, or (3) both results & efforts based

A company selects performance bases or criteria from a list of alternatives, some of them shown below:

Quantitative results / outcome bases / criteria

Quantitative efforts / behavioural bases / criteria

Qualitative efforts / behavioural bases / criteria

• Sales volume• In value / units•Percentage of quota• by products & segments

• Accounts / customers New accounts nos. Lost accounts nos.

• Customer calls No. of calls per day No. of calls per customer

• Non-selling activities overdue payments collected No. of reports sent

• Personal skills Selling skills Planning ability Team player

• Personality & Attitudes Cooperation Enthusiasm

Performance standards are also called sales goals, targets, sales quotas, sales objectives

Performance standards for quantitative results are related to the company’s sales volume or market share goals

Performance standards for efforts / behavioural criteria are difficult to set• For this, companies do “time and duty analysis”

or use executive judgement Performance standards should not be too high or

too low After establishing standards, salespeople must be

informed

Establish Performance Standards

Salesperson’s actual performance is measured and compared with the performance standards

For this, sales managers use different methods or forms:• Graphic rating scales• Ranking• Behaviorally anchored rating scale (BARS)• Management by Objectives (MBO)• Descriptive statements

Companies combine some of the above methods for an effective evaluation system

Compare Actual Performance with Standards

Performance review / appraisal session is conducted, after evaluation of the salesperson’s performance

Sales manager should first review high / good ratings, and then review other ratings

Both should decide objectives / goals and action plan for future period

After the review, sales manager should write about performance evaluation & objectives for the future

Guidelines for reviewing performance of salespersons• First discuss performance standards / criteria / bases• Ask the salesperson to review his performance• Sales manager presents his views• Establish mutual agreement on the performance

Review Performance Evaluation with Salespeople

Many companies combine this step with the previous step – i.e. performance review

During performance review meeting with salesperson, sales manager does the following:• Identifies the problem areas. E.G. Sales quotas

not achieved• Finds causes. E.G. less sales calls, poor market

coverage, or superior performance of competitors

• Decides sales management actions E.G. train salesperson, redesign territories, or review company’s sales / marketing strategies

If a salesperson’s performance is good, he / she should be rewarded and recognised

Decide Sales Management Actions and Control

Salesperson responsibilities are diverse Necessitates four areas being assessed:

◦ Activities◦ Outcomes◦ Profitability◦ Personal development

Each area provides managers with different insights about performance

Appraisals should cover wide range of areas

Do you agree to Suresh's point of view?

Ans:-yes we are agree with Suresh’s point of view because there is need to redefine the performance evaluation method . Ineffective performance appraisal tends to become a time-consuming and unpleasant activity for the sales manager as well as the sales personnel. The purpose of conducting performance evaluation is to crosscheck whether the sales force activities are in alignment with organizational objectives. But in case of KKN India ltd.They consider only sales result with market sales growth and not focus on Individual performance evaluation .And Suresh wants to consider his salespeople's individual performance evaluation papers and a maximum possible increment to them.According to him It is difficult for the sales manager to predict the influence of the external factors on the performance of the sales force. To measure performance, it is necessary for the sales manager to put in place a performance evaluation procedure.

What improvement would you suggest to the existing system of performance evaluation of the salespeople of this company?

Ans:-The performance standard should The sales manager must ensure that the performance standards are set to compare and evaluate the actual performance of the sales force. The standards vary from industry to industry and are different for different job profiles. Performance standards come under quantitative standards, qualitative standards, time-based standards, or cost-based standards. All the sales force activities can be segregated into one of these four categories and compared with the base standard. Many methods of performance evaluation have been developed over the years. Yet, there is no single method that can be considered ideal for all organizations. Some of the commonly used methods are essays, rating scales, rankings, management by objectives and behaviorally-anchored rating scales. Several modern methods like critical incident appraisal, work-standards method, family of measures, etc., have been developed to suit variations and other requirements.

Thank you ….