D099 Module 10

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449 term Bra What are the key considerations and challenges in conducting sales performance appraisals?Constant fine-tuning of performance can be much more effective than annual overhauls, and the frequency of evaluation can be effective for sales organizations as they measure and track sales performance against sales quotas.Discuss how the appraisal methodologies vary based on the type of work being done and the specific roles within a sales organization.Performance appraisals have been used by companies for a variety of different purposes, including salary recommendations, promotion and layoff decisions, and training recommendations.Appraisal methodologies: an assembly worker will require a considerably different appraisal system than a business consultant. Similarly, a salesperson will be appraised very differently from a researcher.Explain the concepts of objective and subjective sales performance measures and give examples of each.Objective: direct data is used to evaluate the performance of the salesperson and often relate to simple and quantifiable data points, such as sales figures, number of sales calls, number of customer meetings attended, and performance against sales quotas.

Subjective: a much less quantitative approach would be various formats of

qualitative evaluation - some subjective metrics of salespeople include product and job knowledge, customer relationships, territory management of planned sales calls, and personal selling characteristics.Describe sales performance ratios including expense ratios, account development ratios, and call activity ratios.Expense ratios capture how much it costs to achieve certain sales outcomes.Account development ratios capture how well salespeople are earning the potential business that exists in their territories.Call activity ratios measure the effort and planning salespeople put into their customer call activities and the successes derived from it.

Describe three ways to seek feedback on sales performance from your customers. Describe four ways customer feedback can be collected.

• Account visits— face-to-face meetings are more effective than contact through

telephone and email.

• Business reviews— these formal reviews provide an opportunity for open and

direct feedback; the current state of the business is reviewed while gathering information on sales performance.

• Conventions—at this type of event, sales managers chat with buyers and

accounts in a casual setting; it's an opportunity to ask questions and listen.1) Questionnaires 2) Focus groups 3) Telephone 4) Virtual online communities or private consumer labels Explain the five common uses of performance appraisals.1) Feedback to salespersons 2) Self-development 3) Reward systems 4) Personnel decisions 5) Training development What are the common sources of error in performance appraisal systems, and how do they impact the evaluation process?Central tendency error: regardless of how people actually perform, the rater fails to distinguish significant differences among group members and lumps everyone together in an "average" category.

Strictness or leniency error: some managers do not believe most salespeople

measure up to their own high standards while others believe most salespeople deserve a high rating; fails to distinguish adequately between good and bad performers and instead relegate almost everyone to the same or related categories.

Recency error: a manager may give undue emphasis to performance during the

past few months/weeks, and ignore performance levels prior to that. Can lead to a situation where salespeople may "float" for the initial months of the evaluation period and then overexert themselves in the past few months or weeks prior to evaluation.Discuss the approaches used to reduce errors in the performance appraisal process.

• Ensure that each dimension or factor on a performance appraisal form

represents a single job activity instead of a group of job activities.

• Avoid terms such as "average" because different managers define the term

differently.

• Ensure that sales managers observe salespeople on a regular basis throughout

the evaluation period. It is even helpful if the manager takes notes for future reference.

• Keep the number of salespeople evaluated by one manager reasonable. It can

be difficult for one manager to evaluate a large group of salespeople.

• Ensure that the measures and standards used are clearly stated, meaningful, and

relevant to good job performance.

• Train sales managers so they can recognize various sources of error and

understand the rationale underlying the evaluation process.A new salesperson observes a seasoned salesperson in order to improve client relationship-building skills. The new salesperson travels with the seasoned salesperson for one month.Which type of training is being used to prepare this new salesperson?Job shadowing.

When a new employee is hired, the human resources manager reviews the attributes of successful sales representatives with the new hire, such as extroversion, curiosity, proactiveness, and openness.Which component of the organizational socialization model is the new hire experiencing?New employee characteristics.A sales manager is developing a training session to improve a salesperson's ability to understand the concept of account development. The sales manager needs to know how much experience the salesperson has had with account development.Which type of training needs assessment should the sales manager conduct?Individual.The sales executive team for a television station is developing a sales compensation budget for its new sales staff. Which guidelines should the sales executive team follow to ensure its efforts are successful?Make incentive payouts contingent on actual sales.At a small comedy club, the sales staff's only compensation comes in the form of a $2 stipend for every ticket sold. Which compensation system are the employees receiving?Straight commission.At a luxury cruise company, full-time sales staff are paid the larger of $1,000 per month or $300 per sale made.The monthly guarantee of $1,000 provides employees with a sense of financial security, and rarely does an employee sell fewer than four cruises per month. If employees do not sell four cruises per month, the $1,000 is not paid back to the company.Which compensation system are the employees receiving?Non-recoverable draw.What advantage does a company enjoy by employing a commission-based pay structure?It provides a financial incentive for employees to excel.A company would like to identify how effective their salespeople have been at analyzing and earning business in their territories over the last several years. Which type of ratio category should the company use for this purpose?Account development.A sales manager is being criticized for using management by objectives (MBO) for the evaluation of salespeople.Why is the manager being criticized for this practice?It places too little emphasis on qualitative job knowledge.A sales manager wants to evaluate a salesperson's combination of inputs and outputs related to client sales meetings. Which measure should the sales manager use for this purpose?Call activity ratio.