MKTG 341 Sales Management: Analysis and Decision Making 8th Edition CH 10 – Flashcards

360-degree feedback

performance management

outcome-based perspective

behavior-based perspective

behavioral criteria

professional development criteria

results criteria

sales quota

profitability criteria

graphic rating/ checklist methods

ranking methods

management by objectives (MBO)

behaviorally anchored rating scales (BARS)

outcome bias

job satisfaction

1. The sales manager and salespeople discuss the salesperson's evaluation, based on feedback from multiple sources. 2. The sales manager rates the salesperson according to predetermined criteria or standards of performance in order to determine whether the salesperson is above or below expectations. 3. The salesperson's performance is reviewed relative to his or her previous performance evaluation to ascertain accomplishments in performance and areas that need improvement. 4. Focus is on improving the system and the salesperson's development and future performance. Sales manager and salesperson work together to specify resources, structure, and training needed for performance issues. A mutual agreement is reached regarding objectives, degree, type of improvement and an action plan; the action plan lays out a road map that shows the salesperson exactly what to do to improve and provides a way to develop needed skills.

1. *Impact on gross profits* - through the products that they sale and/or the prices they negotiate; Ex. 2 salespeople could generate same $ amount of sales and acheive the same sale evaluation, but one may be selling products with a higher margin products and/or maintaining higher prices in negotiation. 2. *Sales expenses inccurred* - 2 Salespeople equal in sales and sales performance, one may not have as many sales expenses which increases net profits.

1. *Job relatedness*- designed to meet the needs of each specific sales organization. 2. *Reliability*- measures should provide accurate assessments of the criteria they are intended to measure. 3. *Validity*- measures should provide accurate assessments of the criteria they are intended to measure. 4. *Standardization*- The measurement instruments and evaluation process should be similar throughout the sales organization. 5. *Practicality* -process must be understood by sales managers and salespeople and be able to implement it i a reasonable amount of time. 6. *Comparability*- result of the performance evaluation process should make it passible to compare the performance of salespeople directly. 7. *Discriminability*- evaluative methods must be capable of detecting differences in the performance of individual salespeople. 8. *Usefulness* - info provided by the performance evaluation must be valuable to sales manager in making various decisions.

1.*Graphic/Checklist Method* 2. *Ranking Methods* 3. *Objective-setting methods* 4. *Behaviorally Anchored Rating Sales (BARS)*

1. *Evaluate* salespeople against relevant performance criteria in order to determine whether there are common areas of low performance. 2. *Compare*- salesperson evaluations to identify problem areas 3. *Investigate*- problem areas to identify causes of performance problems. 4. *Determine* sales management actions to eliminate causes of future problems and to solve existing problems.

*Causes* include: Sales or other sales quotas are incorrect; Poor account coverage; Too few sales calls. *Actions* include: Revise sales or other sales quotas; Redesign territories; Develop motivational programs; Provide closer supervision.

*Causes* include: Behaviorial quotas are incorrect; Too little effort; Poor quality of effort. *Actions* include: Revise behavioral quotas; Develop motivational programs; Conduct training programs; Provide closer supervision.

*Causes* include: Profitability quotas are incorrect; Low gross margins; Highly selling expenses. *Actions* include: Revise profitability quotas; Change compensation; Develop incentive programs; Conduct training programs; Provide closer supervision.

*Causes* include: Professional development quotas are incorrect; Inadequate training. *Actions* include: Revise professionla development quotas; Develop motivational programs; Conduct training programs; Provide closer supervision; Change hiring practices.

A scale that can be used to measure salesperson satisfaction in total and for specific job dimensions. An analysis of the satisfaction can be used to determine appropriate action to increase salesperson performance.

1. Determine appropriate compensation and reward disbursements. 2. Identify salespeople who should be promoted or fired. 3. Determine training and counseling needs. 4. Provide info for HR planning to identify criteria for future recruitment and selection of salespeople. 5. Advise salespeople of work expectations. 6. Motivate salespeople. 7. Help sales people set sales goals. 8. Enhance communications. 9 Tie individual performance to sales organization goals. 10. Improve salesperson performance.

*Outcome-based* perspective focuses on objectives by measure of results, with little monitoring or direction of salesperson efforts by sales managers. (Objective) *Behavior-based* perspective focuses on close supervision of salesperson efforts and subjective measures of salesperson characteristics, activities, and strategies. (Subjective)

1. Evaluate on a monthly, quarterly, or annual basis. More frequent evaluations prevent problems from getting out of hand. Annual evaluations may be too late. 2. Combine input and output criteria which are evaluated using quantitative and qualitative measures. 3. When used, performance standards or quotas are set in collaboration with salespeople. 4. Assign weights to different objectives and incorporate territory data. 5. Use multiple sources of information. 6. Most are conducted by the field sales manager who supervises the salesperson. 7. Provide a written copy of the review and personal discussion.

Salesperson is evaluated by multiple raters. It helps salespeople better understand their ability to add value to their organization and their customers. Involves th Sales Manager, Oneself, External Customers, Team Members, and Internal Customers (other employees the salesperson interacts with).

1. *Behavior*- Consists of criteria related to activities performed by individual salespeople, including: Sales calls, Customer complaints, Required reports submitted, Training meetings, Letters, and Calls. Should not only address activities related to short-term sales generation but should also include non-selling activities needed to ensure long-term customer satisfaction. 2. *Professional Development*- Assess improvements in certain characteristics of salespeople that are related to successful performance in the sales job. Characteristics include - Attitude, Product knowledge, Initiative and Aggressiveness, Communication skills, Ethical behavior. 3. *Results*- Salespeople measured objectively based on results such as - Sales, Market share, and Accounts A sales quota represents a reasonable sales objective for a territory, district, region, or zone. Some research shows that rewards for achieving results have a negative effect on performance and satisfaction. 4. *Profitability*- Salespeople have an impact on gross profits through the specific products they sell and/or through the prices they negotiate for final sale. Salespeople affect net profits by the expenses they incur in generating sales. Criteria examples include: Net profit dollars, Gross margin per sale, Return on investment, Number of orders secured, Selling expenses versus budget.

1. Concentration of businesses within the territory 2. Commitment by the sales manager to assist the sales representative 3. Growth of businesses within theterritory 4. Geographic size of the territory 5. Complexity of products sold 6. Sales representative's past sales performance 7. Extent of product line 8. Financial support (e.g., compensation) a firm provides 9. Relationship of product line 10. Amount of clerical support

1. Personal relationships 2. Perceived difficulty of territory 3. Outcomes (i.e., ends justifies the means)

1. *Consider the criteria* on which members will be evaluated and the methods used to evaluate performance. 2. *Establish a link* between team performance and positive outcomes to promote individual and team effort. 3. *Foster the process* by allowing teams to participate in developing goals and evaluation criteria.

1. Turnover 2. Absenteeism 3. Motivation 4. Organizational commitment

1. Determine problem areas. 2. Identify the causes of the problem. 3. Take appropriate action to eliminate the causes and to solve problems that are already present. 4. Improve performance.

Sales organization *effectiveness* is a summary of the overall success of a sales organization in meeting its goals and objectives in total and at different organizational levels. By contrast, salesperson *performance* is a function of individual salesperson performance in individual situations.