Empower Your Education Sales with airSlate SignNow's Sales Evaluation Program for Education

How to create outlook signature

[Music] Namaskar today we will be discussing the next topic in Salesforce management and this is evaluation of Salesforce so this is going to be the last lecture in this module module 6 of our course on sales and distribution management however this topic shall be dealt with in two lectures and which will be lecture 30 and lecture 31 so we shall be discussing a part of Salesforce evaluation in this lecture and then in lecture 31 we shall be covering the rest of it now as we have discussed earlier that you know Salesforce management involves recruitment selection training motivation you know of Salesforce it also you know involves reimbursements and you know managing selling expenses for Salesforce we have also talked about the compensation system and we have spoken about how you know people are paid salaries either is fixed salaries or as variable components our a combination of both and we have discussed how the expenses of the Salesforce are reimbursed and the both compensation and reimbursement of these expenses actors huge motivators to Salesforce which we also discussed earlier as a part of Salesforce management now the next topic in Salesforce management is evaluation of the sales force and this is going to be a topic of discussion today which we shall start with and continue in the next lecture now why is evaluation required any and every evaluation or assessment is required to ensure things are going on as planned in our case it is something which is required to ensure that that goals and targets which have been laid out are being you know met by the performance of the Salesforce in the field we need to see whether things are going on as planned we have discussed earlier that you know planning and control are you know inseparable they are the Siamese twins and in order for organizations to perform effectively it is very essential that both planning and control mechanisms are will go hand in hand so that whatever is planned as targets as sales goals they can be achieved achieved within the time frame and with the prescribed way they were prescribed resources so of course we see that in in several cases things don't go go on as planned and whatever has been planned in terms of sales goals sales objectives sales targets may not always be achieved yet you know companies must strive towards attainment and fulfillment of those objectives and that is why it becomes very essential that the performance of the sales force is evaluated from time to time not only to assess their performance levels at a micro level but also to assess as to whether the overall objectives of the organization are being achieved or not so sales force evaluation at a micro level may mean an assessment of the sales force you know and the sales person's activities but at a macro level it actually implies you know an overall assessment and a very comprehensive you know assessment to ensure whether you know sales target sales goals objectives are being achieved as per plans across territories across branches regions zones etc so that is why sales force evaluation becomes essential the outcome of course is either you know you know the fact that things are perfect and in place and in those case the company may not have to take any action at all or may they it may then you know based on the potential in the market it may decide to increase the targets however if things are not going on as planned then corrective action is required and this would mean that certain measures need to be taken either with respect to the job design or with respect to the targets or maybe you know training of the sales force and Orion of this old Salesforce and motivation etc so let us you know discuss this topic on Salesforce evaluation the various topics which we shall be covering are the meaning of evaluation the purpose of evaluation what are the methods for evaluation the process of evaluation now the process of evaluation is something which is it it is a four-step process and will be lab rating on it in detail so the first step of it which we will discuss in this particular lecture and the subsequent three stages of the process we shall be discussing in the legs next lecture and the next lecture we should also speak about the determinants of an effective evaluation system and what are the common perceptual errors during performance evaluation so let us begin with the topic now what is evaluation of evaluation is a system you know it's it's an organized and periodic assessment of an employee's performance on his present job and his potential for future job so valuation actually aims at assessing a person's performance at periodic intervals to two to two inch to examine as to how he is performing on the job and the kind of potential he has with respect to his knowledge skills and abilities so that he can contribute even better in future on those sales positions or on higher sales positions it's also referred to as performance evaluation or performance appraisal and the aim of any performance evaluation system is to assess the effectiveness and efficiency of the sales force and to prepare them for future so if we define it a little more more it is an effective means for controlling the performance of sales personnel as well because it involves comparing the actual sales performance of employees with the desired performance of the sales personnel and taking corrective actions for improving their performance so it basically involves the actual sales performance of these employees with the desired and and and taking corrective action for improving their performance in future and also to prepare them for future job positions what is the purpose of valuation now as I said the purpose of the aleutian assess as to how well the sales persons have performed and over a period of time and this will of course help decide on matters like one feedback to the employees now here in case performance has been up to the mark it has has it has been as per standards you know it it it also means that there has to be a reward system for the good performers and you know for the sales personnel who have met the desired performance level so these rewards could be monetary and non-monetary we have discussed them when we did motivation and higher Commission's incentives bonuses and recognition all of which which we covered and with the in the under our topic on compensation act as motivators so you know the evaluation helps decide you know matters with respect to rewards and reward systems it also you know give provides insights into the kind of training needs and the kind of training programs that must be designed so a training needs and design of training programs ing to training needs is something which needs to be taken care of and the basis of this is again performance evaluation or performance appraisals of existing employees so both under performers and good performers may need to be provided with training for the under performers it would help them improve their performance and for the over performers or good performers it would actually mean enhancing their knowledge skills and abilities to prepare them for future job positions so this would again mean you know a take away for career development whether it is with respect to promotions or transfers or need for more training on the new jobs you know or the new positions which which a person must you know have because you know he needs to be now trained for a higher job if he has been promoted or he has to be trained for another job which is not something which he was doing earlier so you know the evaluation also helps you know provide inputs into career development where a person is being you know where it is where it is you know examined you know and assessed as to who are the people who can be promoted who are those who can be internally transferred who are those who can be sent to either you know kook who can be actually positioned on different jobs with different job profiles and you know and of course that would also come with you know that would also mean some kind of training for them to be able to perform on their new positions in a better manner so what we are talking of is continual sales training programs so evaluation also helps you know not only in training and initial training but also you know the the the continual sales training programs which will you know be conducted for people who are either under performers or who are good performers but I have to be now sent to new positions or transferred to new positions and they have to be given more responsibility and more you know duties and responsibilities now evaluation also helps in job design and goal-setting several times it is realized that the goals that had been set or the targets that had been set was something which were which were not realistic and if they are not realistic it would mean revisiting the objectives so our job you know so evaluation also provides inputs into job design and goal setting where we mean that objectives have to be revised in case they are unrealistic and and and and again jobs have to be made more interesting more you know Authority has to be provided to the salespersons or more autonomy has to be provided to them or there has to be more in the jobs have to be enriched more made more you know exciting enough for them to be kept motivated on the job so that they can perform well we have discussed earlier that if a salesperson is made to sell in a particular territory for years together or if he has been made to you know you know sell certain products or sell to the same customers for years together it may become an autonomous it may become boring for him and there again performance may decline so in those cases again you know either the job has to be made more enriching so that he is there is some kind of a motivation which has given to him with respect to the job factors or the job content factors which we discussed when we did a house burglary of motivation and else you know on the other hand it may also be so happening that the targets which have been set are too unrealistic and so in that case also it would mean revision of goals or you know changing the targets you know revising the targets so so as to make them more realistic so the purpose of evaluation is a one you know the distal to to to bring about a reward system in place and to ensure that people who have met the desired performance levels are rewarded and these rewards could be monetary and non-monetary both of which will be motivating for them and you know encourage them to perform even better in in the days to come second is with respect to training needs and design of training programs which becomes essential when it is seen that salespersons performance is much below the desired which which which probably is happening because the sales force is not trained enough or you know the fresh hired sales piece of people you know have been put on on the field without any training and they have to be brought back to you know the the classroom or to you know mentor to mentors to be able to you know get better training and again for those people who are already working in the organization if performance is low again it would mean that you know there is some kind of a training some kind of an orientation which was required to enhance their knowledge skills and abilities and to prepare them to form better on their respective job positions again evaluation would also I helped identify the good performers which would mean you know decisions taken with respect to their promotions or their transfers to higher positions or other departments and other job positions so in a way what we are talking of his career development and evaluation also helps you know with respect to taking decisions on job designs to make them more interesting and revision of targets if if it is felt that the targets which have been set are - are something which is unrealistic of course the point one which I have stated here is feedback to employees and you know one of the major you know takeaways for you know formal evaluation processes feedback to be given to employees if the employees have performed well they need to be appreciated if the employees have not performed well there has to be some kind of a mechanism for a constructive criticism they also has to be some kind of an you know a mentoring program or an orientation program or a training program which which can ensure that that people who are have been under performers can be brought to satisfactory levels of performance so these are the various reasons why evaluation systems are necessary in organizations and in the sales function now what are the different methods of evaluation now basically what is used are certain kinds of measures and these measures could be objective measures and subjective measures objective measures are those which are quantitative measures and they measure employee performance in terms of units that can be quantified they can be seen and quantified on the other and subjective measures are measures which are more qualitative in nature and they measure employee performance based on human judgement like rating ranking paired comparison force distribution so this would mean that these subjective measures although they are more tilted towards the qualitative measures they some element of quantitative measures may be brought in if rating scales are used now ranking is when one person is compared to another and you know there are 10 ranks and 10 different people are being ranked you know and rank given ing to subjective judgment by the immediate superior or you know you know the the branch manager and paired comparisons are when two people are compared or a pair of people pair is compared one against another on several qualities and for force distribution is when a certain amount of people have to be graded as the best and another percentage has to be graded as the average and another percentage has to be graded as the you know the the poor performer so ing to P P subjective assessments of the appraisers these people are placed into these different categories the distribution is called a force distribution because the percentage of people who have to be fitted into these categories is well prescribed and defined and of course the rating scales are often used to rate people on scales of five or seven again here because it's a subjective assessment on qualities which are later rated on scales this makes a system little quantitative now let us go into the process of sales force evaluation and if we go we see that any evaluation system comprises the following stages where we begin with establishing performance standards for sales personnel measuring the actual performance of sales personnel and then comparing the actual against the standards which have been postulated in stage one and then we identify deviations and take corrective action so the first step is establishing performance standards second is measuring actual performance of the sales people third is comparing actual against standards and fourth is identifying deviations and taking corrective action so let us first start with the first stage we shall be covering this first stage in this lecture the subsequent stages two three and four shall be discussed in the next lecture so first what is done whenever you know people have to be evaluated they must be evaluated against certain standards certain benchmarks and so the first stage in the sales force evaluation process is establishing performance standards for salespeople now a performance standards are also called as sales objectives or targets or sales quotas and it involves establishing performance standards based on and this base thanh the nature of the job so whenever standards have to be set for sales personnel it is very important that they are based on the nature of the job and there has to be a coherence between the sales performance standards and what is critical for performing a job so that the so that you know the desired results can be obtained so hence a sales job analysis is very very necessary and what we are talking off again here is the job description so you start with a job analysis and a job description and then what becomes important is establishing performance standards you know which again would mean setting up policy framework for performance evaluation of Salesforce so performance standards you know when they have to be set it's very important that they are set differently for different sales jobs and so you know what the first step which is required is a sales job analysis and a sales job description which will help understand the nature of the job and establishing performance standards would require setting up of a policy framework for the performance evaluation of the sales force so there's certainly issues that must be you know decided upon first is who shall evaluate you know the the sales force or the sales personnel what are the measures that shall be used here what we are talking of will it be objective measures or subjective measures or both we just discussed the objective being quantitative and the subjective being qualitative and when will the evaluation take place and what would be the frequency of this evaluation is it going to be something which is once a year or it's going to be something which is twice a year and so is it going to be annually or is going to be half yearly is it going to be quarterly okay so so and what will be the source of information on the basis of which you know evaluations are going to be made so this will mean you know deciding on the various kinds of reports like the sales volume reports or the selling expense reports or the customers lost reports or the new accounts reports etc so again it's very important to mention here that you know the performance standards will vary across the nature of the job and the selling strategy is involved for example the performance standards for service and developmental settling would vary in a very very very alot so it's very important that when sales managers to evaluate their sales force they have to decide on the standards and on the benchmarks which must be done based on a job description or a sales job description and it's also important that a policy is formulated with respect to who will be the appraiser you know and what are the measures that would be used for appraising and when will the evaluation takes place where and how often and what will be the source of information for evaluating the sales force or for measuring the performance you know take obtaining measures for their performance so this is you know which is something very very crucial now to formulate realistic performance standards companies must possess the knowledge of the total sales potential of a company as well as the territorial distribution they must know very well that what are the in dust what is the market potential and what is the company sales potential and if you remember we spoke of the market potential as the industry potential and we spoke of the company sales potential as the you know as the company put you know potential and we we also and and this not only is the total sales potential important it's also the territorial distribution of such potential which is vital so you know to set realistic standards you know it becomes very important that companies have the knowledge of the total sales potential they should also have information about the potential profitability of the company as regards the various product classes and the classes of customers or who are being catered to selling expense of the car in different territories also must be known now this information helps a company in setting required volume of sales require you know a required volume of sales required which which which are essential for a company for reaching the break-even point and the desired profitability because if you recall we have spoken earlier that sales is important but there is also an it's also important that the selling expenses are curbed else the net profit would get diluted so companies must have a possessed knowledge about the selling expenses and they must also possess knowledge about the strengths the weaknesses of the competitors they play policies their practices their market share etc so to formulate realistic performance standards companies must have knowledge about the total sales potential overall as well as territorial distribution - they must have an idea about the potential profitability of the company with respect to different kinds of products that they are you know manufacturing and selling as well as with respect to the classes of customers that they that they are dealing with 3 they must have an idea about the selling expenses of the company across territories and fourth they must also be aware of competitive strengths and weaknesses their market share the products that they sell and they're selling policies and practices now as I just said performance standards will be objective and subjective and you know the performance standards which vary again across the kind of sales jobs and sales positions based on the nature of the job the selling strategies and methods involved as well as conditions prevailing in the industry so whenever companies decide on the performance standards whether it is quantitative standards or qualitative standards they must keep in mind that you know these standards will vary across sales jobs in sales positions based on the nature of the job they're selling you know strategies and methods involved the conditions in the market and in the industry etc and whatever standards are set must be very realistic and they must be well communicated to the sales force the salesperson must be communicated very well in advance what they are suppose - you know on for the company and in what period so they must be very clearly informed very specifically it should be you know informed and communicated that what in how much period so what do they have to sell and how much do they have to sell in terms of sales volume and in terms of unit and in what period so these are things which need to be taken care of now quantitative standards as I said are those which care which are objective and they define the nature and desired level of performance and quantitative standards are such which have been used by companies for you know encouraging employee performance for years and years or together diff different kinds of quantitative performance standards like for example this the quotas the selling expense ratio the territorial net profit or the gross margin ratio and the territorial market share the sales coverage effectiveness index the call frequency they show the call or sorry the order call ratio average cost per call average order size as well as non selling activities we shall be discussing all of these standards you know in the next few minutes and of course companies use a combination of these standards as instruments of control and so that they think so that they can ensure that the sales force are kept motivated towards desired levels of performance now we also have qualitative standards and these standards are used for such aspects which cannot be measured or quantified and they are mainly used for appraising the performance characteristics of employees which will have an impact on the sales in the long term so quality is like you know sincerity commitment customer relationships good interpersonal relation you know punctuality modesty you know politeness are a few of these traits which which need to be subjectively se assessed now because qualitative performance standards are subjective in nature executive judgment plays a very critical role in measuring qualitative performance now we shall be discussing the subsequent step stages in the next lecture but we but what we need to discuss now is something on the performance standards so what so what I am now going to discuss some of these performance standards and the description of these standards so the most popularly used and widely used and standard is what we refer to as the quotas which clearly specified to a salesperson what he must sell how much and in what period so these standards are expressed in absolute terms whether it is monetary terms in rupees or it could be in units or it could also be in points now what is the point quota here is something which we shall be discussing you know a you know subsequently in our chapter on sales quotas we should be we will put that on hold for later discussion now kotas our standards or you know which I expressed in absolute terms and they apportioned to specific marketing unit now the specific marketing unit here could be a salesperson it could be a branch it could be a you know a dealer or it could be a territory and these the desired level of sales volume you know gross profit net profit selling expenses or a combination of all of them are actually specified so this is one of the most popularly used quarters and popularly used performance standards and we shall have a separate discussion on quotas in in in our lectures next week so but you know in a nutshell quotas are standards which are expressed in absolute terms in rupees or a number of units or as points and they clearly indicate what say a sales person must sell how much of it and in what period it is as I said the most widely used standard the second is a selling expense ratio now we have discussed earlier that sales persons contribute to organizations net profit in two ways one by earning huge sales for the company and two by curbing the selling expenses so says the selling expense ratio basically tries to curb the selling expenses of the sales person it acts as a control element on the selling expenses I incurred by the salespeople because if the selling expenses are very high it would dilute the profits of the company are the net profits of the company so what is assessed is selling expenses in relation to the sales and the ratio is determined on the basis of estimates regarding both the sales volume potential and the selling expenses in a particular territory and hence the selling expense may vary across territories and across sales person serving in different territories because the expense condition across deltrese may vary it may be very you know at a tier 1 and tier 2 cities may be more expensive than tier 3 cities in terms of travel in terms of boarding and lodging in terms of entertaining clients etc so the sales this sorry the selling expense ratio varies across territories and a cross salesperson serving across different territories the third performance standard which we speak off is a territorial net profit or a gross margin ratio now these standards are determined on the basis of the required territorial ratio of net profit to sales or gross margin to sales for each of the territories the objective is to encourage sales persons to sell a balanced line of products and also to keep in mind the relative profitability across different products across different customer segments and territories now often it happens that as we've you know that a small ticket item is easy to sell and and and so the salesperson concentrates on the small ticket item something it's also easy to obtain small orders as compared to large orders again the sales persons may may concentrate on obtaining small orders but this is something which can you know which the competitor can gain advantage off whether it is big in terms of big orders or in big you know big ticket items or it could be also bigger clients so this is something which a company would not desire at any cost and so to ensure that there is a balanced line of orders for you know of products and to keep in mind the relative profitability across different products different customer segments and territories the territorial net profit or the gross margin ratios are are specified the objective here is that each territory must contribute to the overall profits of the company and all kinds of big and small ticket items as well as big and small orders as well as high and low profit potentials customers are paid attention to the next time that is the territorial market share now in order to control this company's market share owner territory by territory basis the target excuse me the target market share percentages for each territory as specified so what the company tries to do is that it actually stipulates the target market share percentage for each territory so that it can control the you know the company so that the market share of the company can be controlled on a territory by territory basis after this the you know the company sales to industry sales in each of the territories is compared to check the effectiveness and efficiency of the sales persons so the standard serves as a basis for maintaining a certain level of customers across each territory companies would always an always want that you know they have large market shares in every territory that they are serving and to ensure that they prescribe this standard and once the appraisal period is over or one every quarterly or every half yearly the company sales in the territory is come you know or to the industry sales in the territory is assessed to check the efficiency and effectiveness of the sales force the next performance standard is the sales coverage effectiveness index which is calculated as a ratio of the number of customers to total prospects in a particular sales territory and individual standards for sales coverage are specified for customers across segments and these customers will vary across size across class then we have the call frequency ratio which is calculated by dividing the number of sales call made to a particular class of customers by the total number of customers in that class so the method method ensures that the sales efforts are being made towards such customers who are the more profitable ones and the more probable ones to give huge orders another standard which is used by companies is calls per day and these relate to the number of call with salesperson must required to make every day now this ensures that the generation of leads which would help sales persons in future you know is you know is done properly and the standard is determined on the customer density and the spread on the road and traffic conditions in the particular territory and so it would vary across territory so this the this particular ratio it assures generation of leads which would help sales personals plan their activities in the future days and of course the standard would be determined based on the customer spread the customer density the condition of the road condition of traffic and would vary across territories then we have the order called ratio which is calculated by dividing the orders materialized with the number of calls made so in a way what we are talking of is a number of number of orders received - the number of calls made so it is used again as a measure to judge the effectiveness of sales persons as regarding you know obtaining final orders and it is also we it called popularly as the batting average ratio and these are gain set for different categories of customers or different classes of customers whether they are you know high or medium or low profit potentials other standards which we have is the average cost per call which highlights the relevance of profitable calls and it is mainly used as a measure of reducing calls or you know reducing frequent using the call frequency on orders that require more calls but are less profitable and then we have the average size order the average size order or the average order size controls you know the frequency of of calls that are made on different accounts and different targets are set for different kinds of customers be it you know customers based on size or on different classes of customers and by determining the average order size sales personnel I encourage to put more effort towards selling to accounts from which they can obtain large orders and then finally we also have performance standards for non selling activities now non selling activities are generally not linked to any kind of a monetary incentive or compensation that is why sales persons want to avoid or ignore such activities which which which is not something which is very wise so to ensure that such non-selling activities are also conducted performance measures or standards are also laid out or prescribed for them and these you know such such activities include a collection of payments from dealers and distributors securing displays of product at various locations entering you know long local advertising agreements with dealers goodwill building with customers follow-up calls with customers etc so with this we come to an end of this session and we have references still can Dave givanni Puri sales and distribution management panda and say Dave sales and distribution management and again panda and say they have sales in distribution management 2011 and then we have havildar and Cavalli sales and distribution management 2017 micro Hill so this brings us to an end of the fifth lecture on the sixth module of the course I hope you found this beneficial we shall be now deliberating on the next three stages in the next lecture thank you