Sales MGMt Fall2023 SESSION7_Evaluation IndividualsDS.pdf

Sales management skills

1. Spring 2023
FUNDAMENTALS
OF
SALES MANAGEMENT
Dina El-Shenawi
Sales & Marketing Consultant

2. MODULE TWO – SESSION 7
EVALUATING PERFORMANCE OF SALES PEOPLE

3. FOUR FUNCTIONS OF MANAGEMENT
Planning
Organizing
Implementing
Leading
Monitoring
Controlling

4. FOUR FUNCTIONS OF MANAGEMENT
Monitoring
Controlling

5. FOUR FUNCTIONS OF MANAGEMENT
Monitoring & Controlling (MODULE 2):
Setting Goals
Motivating & Rewarding
Evaluating the Sales Force Performance
Evaluating individual Sales Rep. Performance
Monitoring
Controlling

6. FOUR FUNCTIONS OF MANAGEMENT
Monitoring & Controlling (MODULE 2):
 Setting goals
 Motivating & Rewarding
 Evaluating the Sales Force Performance
✕Explain the importance of evaluating OVERALL performance.
✕List the advantages and disadvantages of SALES, COST, and
PROFIT ANALYSES.
✕Understand the importance of profitability and the application of ROI
and ROAM.
✕Explain the productivity method of evaluation
Evaluating individual Sales Rep. Performance

7. FOUR FUNCTIONS OF MANAGEMENT
Monitoring & Controlling (MODULE 2):
 Setting goals
Motivating & Rewarding
Evaluating the Sales force performance
Evaluating individual Sales rep. performance
Monitoring
Controlling

8. WHY ????

9. 9
EVALUATING THE PERFORMANCE OF SALESPEOPLE
Purposes of Individual Performance
Evaluation :
1- To insure that compensation and other
REWARDS are FAIR consistent with actual
sales’ person performance.
2- To determine the specific TRAINING and
counseling needs of individual
salespeople and the overall sales force.

10. 10
EVALUATING THE PERFORMANCE OF SALESPEOPLE
Purposes of Sales Person Performance
Evaluation :
3- To provide information for effective
HUMAN RESOURCE planning.
4- To enhance COMMUNICATIONS between
sales person and sales manager.

11. 11
EVALUATING THE PERFORMANCE OF SALESPEOPLE
Purposes of Sales Person Performance Evaluation :
5- To improve sales person PERFORMANCE .
6- To RELATE sales person performance to
sales organization GOALS.
7- To MOTIVATE salespeople.

12. 12
EVALUATING THE PERFORMANCE OF SALESPEOPLE
Purposes of Sales Person Performance Evaluation :
8- To help salespeople set CAREER goals.
9- To advise salespeople of work EXPECTATIONS.
10- To identify salespeople who might be
PROMOTED.

13. 13
EVALUATING THE PERFORMANCE OF SALESPEOPLE
Purposes of Sales Person Performance
Evaluation :
11- To identify salespeople whose employment
should be TERMINATED and to supply evidence to
support the need for termination.
12- To identify criteria that can be used to RECRUIT
and select salespeople in the future.

14. GROUP DISCUSSION
How are your being evaluated in your
organization?

15. EVALUATION PRACTICES
Most firms examine both QUANTITATIVE and
QUALITATIVE criteria when it comes to
evaluating their salespeople, with focus on
output (Quantitative) measures, like the sales
revenues they generate.
 

16. EVALUATION PRACTICES
The input of salespeople is sought, to varying
degrees, before their quotas or performance
standards are set.
The sales goals of different salespeople differ
based upon their activities and territories.
Companies utilize multiple information sources
to perform evaluations.
Most salespeople receive a written evaluation
conducted in an office setting.

17. MOST POPULAR METRICS
Rank %Using Input Output
1 40% Revenues generate
2 31% Number of calls made and leads
3 29% Profits generated
4 24% Number of orders receive
5 18% Number of customers in the pipeline

18. QUANTITATIVE METHODS

19. SALESPERSONS APPRAISALS AREAS
PROFITABILITY MEASURES
RATIO MEASURES
OUTCOMES MEASURES
INPUT MEASURES

20. SALESPERSONS APPRAISALS AREAS
INPUT MEASURES

21. INPUT MEASURES
Input measures gauge the effort put forth by the salesperson to contact,
work with, and sell to buyers
 Number of days worked
 Sales calls per day, week, or month
 Sales calls per customer
 Service calls
 Dealer meetings
 Customer training sessions conducted
 Product demonstrations conducted
 Required reports completed
 Letters or phone calls made to customers
 Advertising displays set up

22. INPUT MEASURES – CATEGORIZED
Current versus Potential
Customers called Planned versus Cold sales calls
made
Sales versus service calls made
Telephone versus on-site sales calls made
Closing calls versus Cold calls made

23. SALESPERSONS APPRAISALS AREAS
OUTCOMES MEASURES

24. OUTCOME MEASURES
The actual results of salespeople’s efforts (ability to close a
sale).
Sales revenues generated
Sales revenues generated per account
Sales revenue generated as a percentage of a salesperson’s
territory potential
Number of orders generated
Number of new customers won
Number of sales to new customers
Cancelled orders
Lost accounts

25. OUTCOME MEASURES – EXAMPLE USA

26. WEIGHTED & COMBINING WORKSHEET

27. SALESPERSONS APPRAISALS AREAS
PROFITABILITY MEASURES

28. PROFITABILITY MEASURE

29. PROFITABILITY MEASURE
Close rate= # of orders 

# of quotations
Profit/call= Total profit

Number of calls made
Net profit as a percentage of sales
Profit Contribution (- respective variable costs)
Net profit dollars
Return On Investment
Gross Margin
Sales volume per call

30. PROFITABILITY MEASURE
Specific Products sold
Final Prices Negotiated
Two salespeople can sell the same sales revenue
levels and meet the exact quota requirements.
However, based upon the mix of products sold
and prices they negotiated, one salesperson
could produce higher gross sales margins for the
firm.

31. PROFITABILITY MEASURE
Likewise, expenses salespeople accumulate,
to improve their firm’s profitability,
Profitability criteria are, in fact, increasingly
being incorporated into salespeople’s
assessments and can directly impact a
salesperson’s quota and bonuses.
During times of slow growth and heavy
competition, Profitability is critically important
to firms.

32. SALESPERSONS APPRAISALS AREAS
RATIO MEASURES

33. RATIOS
Expense Ratios:
Sales expense ratio = Expenses/Sales
Cost per call ratio = Total costs/Number of calls

34. RATIOS
Account Penetration and Servicing Ratios:
Account Penetration ratio = Accounts sold/Total
accounts in market
New account conversion ratio = Number of new
accounts/Total number of accounts
Lost account ratio = Prior accounts not sold/Total
number of accounts
Sales per account ratio = Sales dollar volume/Total
number of accounts

35. RATIOS
Account Penetration and Servicing Ratios:
Average order size ratio = Sales dollar volume/Total
number of orders
Order cancellation ratio = Number of cancelled orders/
Total number of orders
Strike/Hit rate = Number of orders/Number of quotations

36. RATIOS
Call Productivity Ratios:
Calls per day ratio = Number of calls/Number of days
worked
Calls per account ratio = Number of calls/Number of
accounts
Planned Call ratio = Number of planned calls/Total
number of calls
Orders per call (BATTING AVERAGE) ratio = Number
of orders/Total number of calls
Profit per call ratio = Total profit/Number of calls made

37. THE FOUR FACTOR MODEL
Managers employ both behavioral and
outcome- based factors to evaluate sales.
A person’s sales performance is a multi-
dimensional outcome

38. THE FOUR FACTOR MODEL
The four-factor model is comprised of four
performance factors:
Two input activities (days worked and calls rate)
Two output measures (batting average and average
order size).
Sales = Days Worked * Call Rate (#of calls/#of worked days)
* Batting Average (orders per call) * Average Order Size
The four-factor model should be used with
caution, since the four factors are correlated.

39. QUALITATIVE METHODS

40. QUALITATIVE METHOD
Salespeople’s job knowledge
Problem-solving skills
Creativity
Attitude and morale
Internal and external relationships
Initiative and judgment
Communications with Management / Peers
Timeliness in completing reports

41. QUALITATIVE METHOD - TOOLS
THE ESSAY TECHNIQUE


A brief statement by the sales manager
describing the overall salesperson’s
performance level.

42. METHODS AND TOOLS
RATING SKILLS
Utilize phrases or terms as anchors that describe
the salespersons personal characteristics or
performance.
A variety of rating scale can be used, such as
graphic rating / checklist methods.
Example:
“Maintains outstanding relationships with
customers” 

Almost Never 1 2 3 4 5 6 7 Almost Always

43. METHODS AND TOOLS
FORCE RANKING
Performance is ordered from “highest” to
“lowest” within a district or region
Sales manager bases his/her final ranking
on relevant performance characteristics.
Gives little feedback about how to improve
Best used for selecting people for
promotion

44. METHODS AND TOOLS
MANAGEMENT BY OBJECTIVES (MBO)
Setting mutually agreed upon, well-defined
and measurable objectives to be achieved
within a specific time frame
Managing the needed activities
Assessing performance against objectives



Major issue: Sales managers must invest a
significant amount of time to make it work.

45. METHODS AND TOOLS
A BEHAVIORALLY ANCHORED RATING SCALE
(BARS)
Set of scaled statements that describe the level of
performance in terms of various job behaviors.
It requires sales manager to identify key behaviors
related to success and rank salespeople on each one.
The design of this instrument is both time consuming
and expensive.
All ranking scales, can undervalue / overvalue
important areas of salesperson’s performance.

46. METHODS AND TOOLS
A BEHAVIORALLY ANCHORED RATING
SCALE (BARS)

47. LEVERAGING TECHNOLOGY
Sales reps mailed, phoned, faxed, and e-mailed
their call reports to their managers

48. EVALUATING SALESPERSON OVERSEAS
Salesperson ability to adjust to living
conditions
Technical ability
Cultural empathy
Adaptability
Flexibility
Diplomacy
Language skills

49. EVALUATION BIAS
✓Lack of objectivity, fairness, or impartiality on the part of the evaluator that
is based upon personal preferences & beliefs
✓A systematic error in the assessment instrument and procedures or in the
interpretation and evaluation process
✓When sales managers utilize their own perspective rather than using
clearly defined “performance standards” the entire process is jeopardized.

✓Central tendency bias ( practice of rating the center of the scale) to
overcome, managers are
✓Interpersonal bias 



To Minimize “Evaluation Bias” , implement systematic assessment
process

50. REDUCING ERRORS IN EVALUATIONS
1.Before completing the evaluation forms, read and be
familiar with each trait listed on the form.
2.Do not allow one factor to influence others.
3.Base your ratings on actual performance, not potential.
4.Don’t overrate salespeople—evaluate them based on
an objective, unbiased standard.
5.Rate the salesperson on his or her performance over
the evaluation period, not a specific incident.
6.List sound reasons for all performance appraisal ratings.

51. INFORMAL EVALUATION

52. HOW TO COMMUNICATE BAD EVALUATION
Role play: 

Each 2 (one is the manger giving the bad
evaluation, the other is the subordinate
receiving and rejecting the evaluation)



https://www.youtube.com/watch?v=-Otfwpf-
Tec

53. 360 DEGREE

54. 360 DEGREES PERFORMANCE EVALUATION

DEFINITION
Formalized process
Is a management tool and performance appraisal
method that gives employees the opportunity to
receive feedback from multiple “raters”$ !
It is called 360-degree feedback because the
feedback comes from subordinates, peers,
supervisors, customers, suppliers and even
significant others, and finally Their own self
assessments complete the circle.

55. 360 DEGREES PERFORMANCE EVALUATION

FOR LEADERS
The objective is to provide feedback on the “Learner”
performance behaviors & outcomes as well as their
potential,
The “Learner” is expected to be able to set goals for self
development which will support the career advancement
The “Learner” helps choose who among their colleagues should
respond to the survey.
The “Learner” personally communicates with those respondents,
asking them to provide their candid observations.
The report is presented to the “Learner” , either in a group setting (if
multiple people are taking the instrument at the same time) or in a
one-on-one coaching conversation.

56. PROCESS OF 360 DEGREE
The learner also receives a customized set of
developmental recommendations, mapped to the
company’s leadership competencies, to help them
create a personal development plan.
The learner is provided with context and guidance
to understand the data
There is follow-up from the talent professionals to
ensure accountability.

57. 360 DEGREES PERFORMANCE EVALUATION

HISTORY
The feedback is only as valuable as the employee
decides to make it; the feedback should HIGHLIGHT
both STRENGTHS & WEAKNESSES of the employee
and give insight to aid in respective professional
development.
The first known use of a multiple-source feedback
method was during WORLD WAR II, by the German
military.
 The U.S. military used a similar performance appraisal
concept during WORLD WAR I, but the feedback lacked
the appraisals of SUBORDINATES

58. THE 360 DEGREE MODEL BENEFITS
Expanded self awareness
Uncover blind spots & Leverage strength
Reiteration of important messages,
Increased likelihood of change
Links between business outcomes and
leadership behavior
Performance improvements beyond a single
leader

59. 360 DEGREE EVALUATION

60. SAMPLE QUESTIONS 1
Please rate (Subject’s Name/Yourself) on
SELF-AWARENESS relative to PEERS:
Keeps control of his/her emotions & behavior,
even when involved in high-pressure
situations
Is highly ethical
Acts professionally
Learns from his/her mistakes

61. SAMPLE QUESTIONS 2
Please rate (Subject’s Name/Yourself) in terms
of DRIVE FOR RESULTS relative to PEERS:
Is focused on the needs of the customer
Is a problem solver
Please rate (Subject’s Name/Yourself)
PROFICIENCY IN LEADERSHIP relative to
PEERS:
Inspires continuous growth and learning in others

62. SAMPLE QUESTIONS 3
Please rate (Subject’s Name/Yourself) in terms
of DRIVE FOR RESULTS relative to PEERS:
Handles conflict in an appropriate manner
Takes initiative to solve problems
Motivates others to reach their goals

Please rate (Subject’s Name/Yourself) ability
with INTERPERSONAL COMMUNICATION:
Communicates openly/effectively with others

63. SAMPLE QUESTIONS 4
Please rate (Subject’s Name/Yourself) in terms of drive for
results relative to peers:
Is open and receptive to feedback/seeks out feedback

Please rate (Subject’s Name/Yourself) ability with
teamwork:
Works well in a team
Gives constructive and helpful feedback
Treats others with respect
Responds constructively to the mistakes of others
Is open to change and innovation

64. SAMPLE QUESTIONS 5
Please rate (Subject’s Name/Yourself) in terms of
drive for results relative to PEERS:
Is open and receptive to feedback/seeks out feedback



Please rate (Subject’s Name/Yourself) ability with
teamwork:
Works well in a team
Gives constructive and helpful feedback
Treats others with respect

65. SAMPLE QUESTIONS 6
Please rate (Subject’s Name/Yourself) in
terms of drive for results relative to peers:
Responds constructively to the mistakes of
others
Is open to change and innovation
Handles conflict in an appropriate manner
Takes initiative to solve problems
Motivates others to reach their goals

66. Please rate (Subject’s Name/Yourself) ability
with interpersonal communication:
Communicates openly/effectively with others
Is open and receptive to feedback/seeks out
feedback

Please rate (Subject’s Name/Yourself) ability
with teamwork:
Works well in a team
SAMPLE QUESTIONS 7

67. Please rate (Subject’s Name/Yourself) ability
with interpersonal communication:
Gives constructive and helpful feedback
Treats others with respect
Responds constructively to the mistakes of
others
Is open to change and innovation
SAMPLE QUESTIONS 8

68. 68
SALES MANAGEMENT
Carefully evaluating sales person
performance and satisfaction,
Identifying problem areas,
and solving these problems is
really what SALES MANAGEMENT
is all about

69. ASSIGNMENT 4 – 20POINTS
•Design an appraisal/IPM document (Individual
Performance Management)