Page 209 - DMGT205_SALES_MANAGEMENT

Unit 13: Sales Personnel Performance

2. Comparison can never be on "man to man" basis as conditions differ and salesmen handle Notes
different sets of products or customers in different geographical areas, under different
environmental conditions.
3. Standards of performance should be realistic for comparison of actual with standard.
4. Periodicity of evaluation - short-term evaluation may not give correct results and very
long-term evaluation is also not desirable. Periodicity should vary with type of product
practice of the company and management's outlook towards control.
5. Last issue refers to the accounting system or database of the company. Actual data taken
from typical sales records are not adequate to provide precise comparison of salesman or
sales groups, i.e., the product mix sold differs and performance is not comparable.

Therefore, evaluation system with multiple criteria should be used.
Self Assessment

State whether True or False:
10. Ratio of net profit or gross profit to sales are decided upon for the sales territories.
11. Each sales territory is considered as an organisational unit and contributor to corporate
profit.
12. A well designed performance system aids in self improvement of the salesman by taking
stock of his own work.
13. Regional sales figures are adjusted according to population of that region.
14. Evaluation based on qualitative data can have bias and vitiate evaluation results as certain
important determinants of salesmen effectiveness
15. Standards of performance should be realistic for comparison of actual with standard.



Caselet On the basis of the data given in the following two
tables, make appropriate recommendations to

management
On the basis of the data given in the following two tables, make appropriate
recommendations to management.
Table I: Comparative Performance of Salesmen
Table I Comparative Performance of Salesmen
Sales Total Calls Total Sales/Calls Average Sales Average Total Customers
Area Orders Ratio by Salesman Salesman By
Order
A 1,900 1,140 60.0% 4,56,000 400 195
B 1,500 1,000 66.7 3,60,000 360 160
C 1,400 700 50.0 2,80,000 400 140
D 1,030 279 27.1 66,000 239 60
E 820 165 20.1 31,000 187 50
TOTAL 6,650 3,284 49.4 1193,000 363 605
Table II: Comparative Cost of Salesmen
Sales Annual Expense Total Salesman Sales Cost/Sales Ratio Contd...
Area Compensation Payments Cost Produced
A 11,400 5,600 17,000 4,56,000 3.7%
B 10,800 7,200 18,000 3,60,000 5.0
5.7
16,000
C 10,200 5,800 LOVELY PROFESSIONAL UNIVERSITY 203
2,80,000
D 9,600 12,400 22,000 66,000 33.3
E 10,000 16,000 26,000 31,000 83.8
TOTAL 52,000 47,000 99, 000 119,3000 8.3