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Common Mistakes with Performance Evaluations:

Common Mistakes with Performance Evaluations:. Evaluations are too general (too global) —they do not address specific strengths and weaknesses.

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Common Mistakes with Performance Evaluations:

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  1. Common Mistakes with Performance Evaluations: • Evaluations are too general (too global)—they do not address specific strengths and weaknesses. • Evaluations are too subjective—they stem from the manager’s feelings or personal observations, not from careful analysis using standardized, objective criteria.

  2. A Good Evaluation System: • Evaluations should be specific and objective. • Evaluations should be based on objective, measurable criteria. • When sales reps are aware of the criteria on which they will be evaluated, they will try to do things to improve their performance on these criteria.

  3. Why Evaluations are Important: • They can serve as the basis for promotion and pay increases. • They can be used to identify weaknesses and build corrective training programs. • They can be used to identify needed changes to the compensation plan. • They act as a supervisory aid (by helping managers to direct behavior). • They can be used to improve morale (by recognizing and rewarding behavior).

  4. The Job Description • A good job description details the nature of the job and lists critical duties and responsibilities. • A detailed job description can serve as a reference point or standard against which to judge the employee.

  5. Difficulties Inherent in Evaluating Sales reps • It is difficult to compare productivity across reps. • Even territories equal in sales potential are not comparable in other ways (strength of competition, working conditions, terrain, etc.). • Sometimes the results of a sales rep’s efforts do not become apparent for a long period of time.

  6. Step 1: Establish Some Basic Guidelines (Policies): • Policies should govern— • WHO will conduct the evaluation • HOW OFTEN the evaluation will be done • IF the employee will take an ACTIVE ROLE in the evaluation

  7. Management by Objectives: • “an evaluation system in which the manager and employee work together to set performance goals—the goals become the standards against which the employee’s performance is judged” • What is 360-degree feedback? • “getting feedback from everyone who works with a rep—customers, peers, superiors, and subordinates”

  8. Step 2: Select the Bases for Evaluation • Outputs—measure “results” • Examples—Sales Volume (in $, units, by product, by customer); Percentage of Quota Achieved; Number of Orders; Average Order Size; Gross Margin, Number of New Accounts • Outputs are quantitative and easy to measure.

  9. Bases for Evaluation (continued): • Inputs—measure “effort” • Two types of Inputs: Quantitative and Qualitative • Quantitative--# of Days Worked; # of Calls per Day; Selling Expenses Incurred; # of Service Calls Made • Qualitative—Cooperativeness; Ability to Handle Objections; Quality of Sales Presentations; Product Knowledge

  10. Steps 3 & 4: Set Performance Standards; Compare Actual Performance Against Standard • Differences in Competition by Territory • Measure Mkt. Share in each territory; Make a list of the # of competitors and # of reps working in each territory; Estimate the level of marketing activity and marketing spending by each competitor • Differences in the Ability to Gain Shelf Space • Calculate sales per linear foot in each store; Compare sales of all brands across stores; Record changes in space over time; Visit each store and inspect the shelf locations

  11. Other Performance Measures: • Average Sale=Total # of Orders/Total Sales (Has the rep been allowing too many small orders?) • Call Rate = # of call per day (Is this higher or lower than the company average?) • Batting Average=# of Orders Rcvd/# of Calls (Is the rep able to locate good prospects and close the sale?) • Cost per Call=Total Selling Exps/# of Calls (Is this higher or lower than the company avg?)

  12. What is the “halo effect?” • “occurs when performance on one criterion biases the overall evaluation” • Can work negatively or positively

  13. What are “BARS?” • Behaviorally-Anchored Rating Scales • Each point on the scale contains a detailed description of the behavior associated with that rating • See Page 454.

  14. Tips from Lawyers on Conducting Performance Evaluations: • Conduct reviews at least once per year or more. • Fill out a uniform instrument on all employees. • Have both parties sign and date the completed instrument. • Develop a specific plan for addressing weaknesses. • Never make reference to a legally protected class of employees.

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