Module 10: Salesperson Evaluation

Question 1

Performance management

Answer 1

A process of ensuring that a set of activities and outputs meet an organization’s goals in an effective and efficient manner

Question 2

sales performance evaluation

Answer 2

An analysis of the performance of sales personnel

Question 3

performance standards

Answer 3

Specific performance expectations for each major duty. Observable behaviors and actions that explain how the job is to be done

Question 4

Feedback Diagram

Answer 4

Question 5

Types of input activities include the following:

Answer 5

Number of days worked
Number of calls made each day
Number of calls made to prospects
Actual selling time per call
Selling time versus non-selling time
Number of emails to prospects
Costs per sales quota

Question 6

Outputs can include the following objective data:

Answer 6

Sales revenue
Number of units sold
Gross margin
Number of new accounts
Number of active accounts
Number of lost accounts
The average size of orders

Question 7

There are different groups of ratios to choose from

Answer 7

expense ratios, account development ratios, and call activity ratios.

Question 8

Expense ratios

Answer 8

Expense ratios capture how much it costs to achieve certain sales outcomes.
Cost per call ratio = total costs ÷ number of calls
Cost per quota ratio = total costs ÷ sales quota

Question 9

Account development ratios

Answer 9

Account development ratios capture how well salespeople are earning the potential business that exists in their territories.
Sales per account ratio = sales dollar volume ÷ total number of accounts
Average order size ratio = sales dollar volume ÷ total number of orders

Question 10

Call activity ratios

Answer 10

Call activity ratios measure the effort and planning salespeople put into their customer call activities and the successes derived from it.
Calls per day ratio = number of calls ÷ number of days worked
Planned call ratio = number of planned calls ÷ total number of calls

Question 11

Graphic rating scales

Answer 11

These are the most commonly used performance evaluation system. Typically, the raters use a five- to seven-point scale to rate employees’ productivity. Salespeople are assessed on specific characteristics, accomplishments, and behaviors. This is a useful method to observe improvements over time.

Question 12

Employee comparison methods

Answer 12

Rather than judging subordinates against pre-established criteria, subordinates are compared with one another. This method eliminates some biases but still allows for halo effect errors to occur. (This will be discussed in more detail later in this lesson.)

Question 13

Behavioral checklists and scales

Answer 13

Behaviors are more definite than traits. Supervisors record behaviors that they judge to be relevant to job performance. They keep a running tally of good and bad behaviors to evaluate the performance of employees based on their judgment.

Question 14

halo effect

Answer 14

The tendency for positive impressions of a person in one area to positively influence one’s opinion or feelings in other areas

Question 15

peer assessments

Answer 15

A type of assessment consisting of members of a group evaluating and appraising the performance of their fellow group members

Question 16

self-assessments

Answer 16

A type of assessment in which individuals assess and evaluate their own behavior and job performance

Question 17

Seeking customer feedback consists of gathering information, asking questions, and listening. There are a variety of ways to capture this feedback:

Answer 17

Account visits, Business reviews, Conventions

Question 18

Questionnaires

Answer 18

Distribute one-page questionnaires that ask some key questions, and encourage customers to fill them out. These can be mailed out as prepaid postcards, or given to consumers who give their permission to be contacted.

Question 19

Focus groups

Answer 19

This involves gathering a number of customers, sitting them down, and discussing a range of issues relevant to a company’s business. The advantage of using this method over a questionnaire is that it will yield more detailed information and feedback, as it provides for more open-ended questions and discussion. In-person focus groups and one-on-one interviews are helpful tools that provide explanation of product- or consumer-related issues because you are going to the main source directly.

Question 20

Telephone

Answer 20

Some surveys can be conducted via phone. These yield a more private exchange between the customer and the organization.

Question 21

Virtual online communities or private consumer panels

Answer 21

Technology has made it increasingly easier for companies to obtain feedback from their customers. With the explosion of technology in the marketplace and the consumer’s everyday life, many companies are now building their own proprietary online panels of consumers, giving them unencumbered access to their target market on an ongoing basis. In exchange for their honest opinions and feedback, customers are incentivized for their time.

Question 22

Feedback to salespersons

Answer 22

Performance appraisals provide feedback to salespeople about quantity and quality of job performance. Without this information, salespeople have little knowledge of how well they are doing their jobs and achieving their sales quotas, and how they might improve.

Question 23

Self-development

Answer 23

Performance appraisals can also serve as an aid to salespeople’s self-development. Individuals learn about their strengths and weaknesses as seen by others and can initiate self-improvement programs.

Question 24

Reward systems

Answer 24

In many cases, businesses use appraisals to form the basis of reward systems such as bonuses and merit-based compensation. Performance appraisals can also be used to measure sales results to pay out sales commissions and measure against sales quota performance.

Question 25

Personnel decisions

Answer 25

Performance appraisals serve personnel-related functions as well. In making personnel decisions, such as those relating to promotions, transfers, and terminations, appraisals can be quite useful. Employers can make choices based on the information about individual talents and shortcomings. In addition, appraisal systems help management evaluate the effectiveness of its selection and placement functions. If newly hired salespeople perform poorly, managers may consider whether the right kind of people are being hired in the first place.

Question 26

Training and development

Answer 26

A performance appraisal can identify areas for coaching and training individual salespeople. For example, Kretsmart conducts quarterly performance appraisals that have helped the sales manager (Leilani) identify areas in which her sales team lack critical skills for either immediate or future performance. In these situations, new or revised training programs can be established to further develop the company’s human resources.

Question 27

Central tendency error

Answer 27

The tendency of managers and interviewers to rate all or most of the employees or interviewees as average

Question 28

Strictness

Answer 28

The inverse of the leniency error in which a manager does not enforce from employees a suitable level of performance and compliance with standards

Question 29

leniency error

Answer 29

A rater’s bias that occurs because of the rater rating an individual too positively

Question 30

confirmatory bias

Answer 30

The tendency to search for or interpret new information in a way that confirms a person’s pre-existing beliefs

Question 31

similarity bias

Answer 31

A tendency in which an individual favors people who are like themselves, often at the expense of those who are not

Question 32

Recency error

Answer 32

An inaccuracy or flaw in performance appraisal caused by the evaluator’s reliance on the most recent occurrences of the employee’s behavior

Question 33

Personal biases

Answer 33

Finally, it is not uncommon to find situations in which managers allow their own personal biases to influence their appraisals. Such biases include like or dislike for someone, as well as racial and gender biases. Personal biases can interfere with the fairness and accuracy of an evaluation and are illegal in most situations.

Question 34

Critical incident technique

Answer 34

With the critical incident technique of performance appraisal, sales managers record incidents (or examples) of each salesperson’s behavior that led to either unusual success or unusual failure on some aspect of the job. These incidents are recorded in a daily or weekly log under predesignated categories (planning, decision-making, interpersonal relations, report writing).

Question 35

Behaviorally anchored rating scale

Answer 35

An appraisal system that has received increasing attention in recent years is the behaviorally anchored rating scale (BARS). This system requires considerable work prior to evaluation. However, if the work is carefully done, it can lead to highly accurate ratings with high inter-rater reliability.

Question 36

Behavioral observation scale (BOS)

Answer 36

BOS is similar to BARS in that both focus on identifying observable behaviors as they relate to performance. It is, however, less demanding of the manager. Typically, the manger is asked to rate each behavior on a scale from one to five to indicate the frequency with which the salesperson exhibits the behavior.

Question 37

Management by objectives (MBO)

Answer 37

A popular technique for evaluating employees who are involved in jobs that have clear quantitative output is MBO. Although the concept of MBO encompasses much more than just the appraisal process (incorporating an organization-wide motivation, performance, and control system), the focus here is on its narrower application to evaluating employee performance.

Question 38

Self-evaluations

Answer 38

Salespeople have the opportunity to rate themselves against similar criteria used by their sales managers. Salespeople respond to a series of questions to evaluate many aspects of their performance. From the job description to goals accomplished, the employees think through all components of their performance, including professional development. This process helps them look at their current and desired levels of contribution.

Question 39

360-degree feedback

Answer 39

At Kretsmart, managers and team leads are also evaluated. Instead of being evaluated by one person, they are evaluated by several people—not only those above them in the organization but those below and beside them. Leilani’s sales team gets to evaluate her as well. The approach is called 360-degree feedback, and the purpose is to ensure that employees (mostly managers) get feedback from all directions—from supervisors, reporting subordinates, coworkers, and even customers. If it is conducted correctly, this technique furnishes managers with a range of insights into their performance in a number of roles.