A very important part of managerial tasks is to measure the performance of their employees. The evaluation is necessary to attain the objectives of the company as possible deficits can be identified and steps can be taken against them (Jobber and Lancaster, 2003: 489). The performance measurement means to discover the strengths and weaknesses of the employees with the aim to improve their performance. The evaluation should also recognize and reward the success of the person evaluated and give him/her a clear feedback about the performance in order to support his/her development (Spiro, Stanton and Rich, 2003: 445). This study will focus on the performance measurement of the sales force, as the success of the sales department is decisive of the company’s overall performance. In order to get motivated and qualified salespeople sales managers must not just analyze statistics but also need to give directions and the possibility of self-development (Spiro, Stanton and Rich, 2003: 441-442). Following, a process of measuring sales force performance will be pointed out which leads the sales manager through the evaluation. Afterwards, the importance of performance measurement within sales management will be shown and a conclusion will be drawn.
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Table of Contents
1 Introduction
2 Process of measuring sales force performance
2.1 Establish some basic policies
2.2 Select bases for evaluation
2.2.1 Output measures
2.2.2 Input measures
2.3 Set performance standards
2.4 Compare performance with standards
2.4.1 Evaluating performance by means of quantitative factors
2.4.2 Evaluating performance by means of qualitative factors
2.5 Discuss the evaluation with the salesperson
3 Importance of performance measurement within sales management
4 Conclusion
Objectives and Topics
This study aims to examine the systematic process of evaluating sales force performance, emphasizing how managers can identify and utilize appropriate metrics to drive employee development and overall company success.
- The five-step framework for effective sales force evaluation.
- Distinction between quantitative output measures and input-based performance indicators.
- The critical role of setting clear, attainable performance standards.
- Subjective versus objective evaluation techniques and their associated challenges.
- The link between performance measurement, compensation, and employee motivation.
Excerpt from the Book
2.2.1 Output measures
The output measures are quantitative bases. They are easy to measure as they only consider the salesperson’s results (Spiro, Stanton and Rich, 2003: 446). According to Jobber and Lancaster (2003: 492), there are among others following output measures:
- Sales revenue achieved
- Profits generated
- Sales per potential account
- Sales per active account
- Sales revenue as a percentage of sales potential
- Number of orders
- Sales to new customers
- Number of new customers
The output measures also allow meaningful comparisons, for instance the comparison of several salespeople, the comparison of the performance of consecutive years, or the comparison of the performance to an objective. In order to gain more specific results it is possible to further break down these measures, e.g. by type of customer or product (Spiro, Stanton and Rich, 2003: 446). The main sources of information are company records such as sales invoices, customers’ orders and accounting records (Spiro, Stanton and Rich, 2003: 449). Since there are uncontrollable factors like sales potential in a territory, the output measures do not represent an equitable base for the comparison of the salespeople’s performance. Therefore sales managers should also take input measures into account when evaluating their sales force (Spiro, Stanton and Rich, 2003: 446-447).
Chapter Summaries
1 Introduction: This chapter highlights the necessity of performance measurement for identifying deficits and supporting professional development within a sales team.
2 Process of measuring sales force performance: This section details a five-step program ranging from establishing policies and selecting evaluation bases to discussing results with staff.
3 Importance of performance measurement within sales management: This chapter connects evaluation outcomes to broader managerial decisions, including compensation strategies and training adjustments.
4 Conclusion: The concluding chapter summarizes that while evaluation is essential, managers must carefully balance quantitative and qualitative inputs to achieve a fair assessment.
Keywords
Sales Force, Performance Measurement, Evaluation Process, Output Measures, Input Measures, Sales Management, Salespeople, Quantitative Factors, Qualitative Factors, Performance Standards, Management of Objectives, 360-degree feedback, Sales Revenue, Motivation, Compensation Plans.
Frequently Asked Questions
What is the core purpose of this study?
The study examines how sales managers can effectively measure the performance of their staff to identify strengths and weaknesses, ultimately improving individual development and organizational success.
Which central topics are addressed in the document?
The core topics include the five-step evaluation process, the distinction between output and input measures, standard setting, and the strategic importance of performance reviews in sales management.
What is the primary objective of the performance measurement program?
The objective is to provide a structured approach for sales managers to analyze performance statistics, offer constructive direction, and create opportunities for self-development for their salespeople.
Which scientific methodology is primarily applied?
The paper utilizes a literature-based review and analysis of established management theories and industry-standard practices for performance evaluation in a business context.
What content is covered in the main body of the work?
The main body breaks down the measurement process into specific steps: establishing policies, selecting criteria, setting benchmarks, performing comparisons, and conducting final feedback discussions.
Which keywords best characterize the research?
Key terms include Sales Force, Performance Measurement, Output Measures, Input Measures, Sales Management, and Qualitative/Quantitative evaluation factors.
How do "360-degree feedback" systems work in this context?
It is an alternative evaluation policy where performance is assessed not only by the superior but also by peers, subordinates, and clients to provide a more holistic view.
What challenge does the "halo effect" pose to managers?
The halo effect represents a bias where the manager's subjective prejudice (e.g., disliking a salesperson's appearance) negatively influences the overall assessment, regardless of actual sales results.
- Quote paper
- Diplom-Betriebswirtin (FH) Meike Lehmann (Author), 2007, Sales Force Performance Measurement, Munich, GRIN Verlag, https://www.grin.com/document/122193
