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KKN India Ltd.

Sales force performance Evaluation

Presented by:-Ketan ThakurNikhil mehendru

Jaykishan lauhana

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Introduction to the case:

Regional sales manager(western region) asked for maximum annualIncrements to the general manager(sales) for the highest contributed by hissales team.

The sales manager appreciate their performance and should be suitably

rewarded, but that does not mean salespeople from other regions are notperforming well.

Method used for evaluation is the comparison of actual sales with previousyears sales and the market potential was not considered when the quotaswere established.

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

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Performance evaluation method in KKN India Ltd.

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

No individual performance measure technique is used.

Performance evaluation method compares the actual sales with the previousyears sales ,and the market potential was not considered when the sales quotasWere established.

Inconsistency in measuring performance.

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Purposes of SalespersonPerformance Evaluations I

1. To ensure that compensation and otherreward disbursements are consistent

with actual salesperson performance

2. To identify salespeople that might bepromoted

3. To identify salespeople whoseemployment should be terminated and

to supply evidence to support the need

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Purposes of SalespersonPerformance Evaluations II

4. To determine the specific training andcounseling needs of individual

salespeople and the overall sales force

5. To provide information for effectivehuman resource planning

6. To identify criteria that can be used torecruit and select salespeople in the

future

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The stepsinvolved in the procedure are:

Set policieson performance evaluation and control

Decide bases of salespersons performance

evaluation

Establishperformance standards

Compareactual performancewith the standards

Review performanceevaluation with salespeople Decidesales management actions and control

We shall describe above steps briefly

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Most companies establish basic policies. Examples

are:Frequencyof evaluation. Mostly once a year.Who conducts evaluation? Mainly immediate

supervisorAssessment techniques to be used. E.G.

Management by objectives (MBO), 360-degreefeedback

Sources of information. Sales analysis, newbusiness reports, lost business reports, call

plans, etcBasesof sales force evaluation. (next slide)Conducting performance review sessions with

salespeople

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Salesperson

360-Degree FeedbackSystem

Salesperson isevaluated bymultiple raters

Helps salespeoplebetter understandtheir ability to add

value to theirorganization andtheir customers

Sales ManagerEvaluation

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A firm should decidewhich of the following bases / criteria it woulduse: (1) result / outcome based, (2) efforts / behavioural based, or (3)

both results & efforts based A company selectsperformance 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

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

Performance standards for quantitative results arerelated to the companys sales volume or marketshare goals

Performance standards for efforts / behavioural

criteriaare difficult to setFor 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

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Salespersonsactual 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

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Performance review / appraisal session is conducted,after evaluation of the salespersonsperformance

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

Both should decide objectives / goalsand action planforfuture period

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

Guidelinesfor 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

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Many companies combine this step with theprevious step i.e. performance review

During performance review meeting withsalesperson, sales manager does the following:

Identifies the problem areas. E.G.Sales quotas notachieved

Finds causes. E.G. less sales calls, poor marketcoverage, or superior performance of competitors

Decides sales management actions E.G. trainsalesperson, redesign territories, or review

companyssales / marketing strategies If a salespersons performance is good, he / she

should be rewarded and recognised

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Salesperson responsibilities are diverse Necessitates four areas being assessed:

Activities Outcomes

Profitability Personal development

Each area provides managers with differentinsights about performance

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Do you agree to Suresh's point of view?

Ans:-yes we are agree with Sureshs point of view because there is need toredefine the performance evaluation method . Ineffective performance

appraisal tends to become a time-consuming and unpleasant activity for thesales manager as well as the sales personnel. The purpose of conductingperformance 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 onIndividual performance evaluation .And Suresh wants to consider hissalespeople's individual performance evaluation papers and a maximumpossible increment to them.According to him It is difficult for the sales manager to predict the influence ofthe external factors on the performance of the sales force. To measureperformance, it is necessary for the sales manager to put in place a

performance evaluation procedure.

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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 thatthe 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 jobprofiles. Performance standards come under quantitative standards, qualitativestandards, time-based standards, or cost-based standards. All the sales forceactivities can be segregated into one of these four categories and comparedwith the base standard. Many methods of performance evaluation have beendeveloped over the years. Yet, there is no single method that can be consideredideal 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 suitvariations and other requirements.

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