Evaluating – Comparing Actual Sales Performances with Standards Taking Action – the Dynamic Phase of Control in Sales Management

1. EVALUATING—COMPARING ACTUAL PERFORMANCES WITH STANDARDS

The most difficult step in sales force control is the evaluation step—the com­paring of actual performances with standards. This is more than a mechanical comparison; this step is difficult because evaluation requires judgment. The same standards cannot be applied to all sales personnel—there are differences in individual territories, their sales potentials, the impact of competition, and the personalities of sales personnel and their customers. It is possible to take territorial differences into account by setting individual performance standards for each territory, but it is not possible to adjust fully for differences in the per­sonalities of the salesperson and the clientele. Furthermore, complications often develop in relating individual performances to standards, for example, when two or more salespersons work on the same account or when an account deals with both the salesperson and the home office.

Evaluating sales personnel requires a comparison of performance with quantitative standards as well as an appraisal against qualitative performance criteria. Sales personnel with poor performances, as gauged by quantitative standards, may be making offsetting qualitative contributions. Individuals who do not reach sales quotas or keep to prescribed call schedules, for instance, may be building for the future by cementing relations with distrib­utors and dealers. Evaluating performance of sales personnel requires judg­ment and deep understanding of market factors and conditions.

Judgment enters into the evaluation of sales personnel in still other ways. Performance trends, as well as the current record, are relevant—an individual showing improvement but with still substandard performance needs encouragement. There is always the chance, too, that something is wrong with a standard. When an individual continually fails to reach a standard, management should investigate whether the standard has been set too high.

In comparing actual results with projected results, the general pro­cedure in scientific work is to set up tests that measure the variable under observation while taking account of the effects of other variables. In the evaluation of sales personnel, it is not possible to set up such tests. Each salesperson’s performance results from complex interactions of many variables, some of which are beyond the control of either the salesperson or of management. The time element changes and so do the sales person­nel, the customers, general business conditions, competitors’ activities, and other variables. However, some companies measure the impact of particular variables on personnel performance through careful design of experimental and control groups.

2. TAKING ACTION—THE DYNAMIC PHASE OF CONTROL

The evaluations, or comparisons of actual performances with stan- dards—tempered and adjusted by executive judgment—point the way to needed action. If performance and standards are in alignment, the decision may be: no action needed. Otherwise, the three alternatives are (1) adjust performance to the standards, thus increasing the degree of attainment of objectives; (2) revise the policy and/or plan, or the strategies used for their implementation, to fit better the achievement of objectives; or (3) lower or raise the objectives or the standards and/ criteria used in measuring their degree of attainment to make them more realistic. The actions resulting from these decisions, in turn, are conditioned by the executive’s judgment, experience, knowledge of the situation, and administrative skill.

Source: Richard R. Still, Edward W. Cundliff, Normal A. P Govoni, Sandeep Puri (2017), Sales and Distribution Management: Decisions, Strategies, and Cases, Pearson; Sixth edition.

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