Salespeople Performance Evaluation Criteria in India.
| Author | Dhurkari, Ram Kumar |
Introduction
In any sales organization, the promotion of salespeople through performance appraisal is a process of selecting a set of individuals whose qualifications and skills match or exceed that of the desired qualities normally required to perform the defined job in the best way. The organizations either make the performance appraisal process very strategic, thus utilizing rigorous and costly procedures, or use any inexpensive and quick decision procedures which involve the usage of available information heuristically. Performance evaluation of salespeople is crucial and essential for organizations to ensure alignment of salespeople's efforts towards overall corporate efficiency and profitability. Marketing scholars are continuously investigating different ways to improve the performance evaluation of salespeople (Avila, Fern & Mann, 1988; Dubinsky, Skinner & Whittler, 1989; Jaworski & Kohli, 1991; Marshall, Mowen & Fabes, 1992; Mckay, Hair, Johnston & Sherrell, 1991; Morris et al., 1991). Conducting effective performance evaluation and appraisal of salespeople is a challenging task as it involves tangible as well as intangible attributes of salespeople. A poorly designed performance evaluation and appraisal system directly affects the motivation and productivity of salespeople. In addition, it increases role conflict and ambiguity, and sometimes salespeople's turnover (Anderson & Chambers, 1985; Churchill, Ford, Hartley & Walker, 1985). Further, it is reported that a poor evaluation system alone has a stronger causal impact on the job-related behavior of salespeople (Anderson & Chambers, 1985). It is found that an effective evaluation system is one of the major sources of feedback for managers and salespeople as it directs them on how selling tasks can best be accomplished (Jackson, Keith, & Schacter, 1983; Rosenbloom & Anderson, 1984).
This study is an attempt to understand important criteria used for performance evaluation of salespeople in India. The literature on salespeople performance evaluation from the last four decades is examined to compile a list of important criteria. The inputs from the literature on the usage of these criteria are aggregated. An empirical study conducted among 90 sales and marketing managers in India to understand the degree of importance given to the top four criteria.
Compilation of Literature
When multiple criteria are used for the performance evaluation of salespeople, managers need to have some mechanism of weighting the performance on different criteria. Except a few (e.g., Miller & Feinzing, 1993; Liang & Wang, 1994; Capaldo & Zollo, 2001; Karsak, 2001; Golec & Kahya, 2007; Gungora, Serhadlioglub & Kesen, 2009; Dagdeviren, 2010; Dursun & Karsak, 2010; Torfi, Farahani & Rezapour, 2010; Kersuliene & Turskis, 2011; Mano-harana, Muralidharan & Deshmukh, 2011; Kabak, Burmaogelu & Kazancogelu, 2012), previous research on salespeople performance evaluation mostly focused upon identifying appropriate criteria and measurement procedures for e valuation (Darmon & Martin, 2011; Madhani, 2015). The criteria used for salespeople performance evaluation are a combination of quantitative and qualitative indicators of performance. The most widely used quantitative measure for performance evaluation of salespeople revolves around sales volume. However, in this study, the quantitative indicators of performance are intentionally ignored because the weight importance of quantitative indicators can be computed directly without much intervention of the decision-maker (DM). The extant research on the usage of different qualitative indicators of performance is reviewed and analyzed to select the a few top criteria. Various researchers empirically investigated the percentage of usage (the percentage of respondents who use a particular criterion) of different criteria for salespeople performance evaluation (Table 1). But the usage pattern does not reflect the importance given to various criteria. Therefore, other studies are also reviewed and analyzed which examined the ratings given by managers to various criteria for the salespeople performance evaluation (Table 2). Average percentage usage and an average rating of all the criteria were calculated and rank-ordered separately. The average of these two ranks is computed. Results are provided in Table 3. The top four criteria and eight sub-criteria are selected in the later part of the study.
Further, the most widely used quantitative measure for performance evaluation of salespeople revolves around sales volume. But this measure was intentionally not included in the hypothetical problem designed here. This is to avoid outcome bias of the decision-maker (DM). Outcome bias (Baron & Hershey, 1988; Hawkins & Hastie, 1990) occurs when a manager develops the tendency to overweight outcomes and underweight qualitative indicators of performance if a salesperson is performing very well on the selling side and rated very high on output measures.
Research Methodology
A hypothetical problem on salespeople promotion decision is designed in which the respondents (sales and marketing managers in this study) are required to screen 10 potential candidates. A set of hypothetical profiles of salespeople was provided who may be suitable for a first-level managerial position in sales in an upcoming area/territory. The respondents were requested to assume as if they are doing this task for their current organization. The full profile orthogonal design method is used to generate unbiased profiles of salespeople. Using the SPSS orthogonal design functionality, a total of 49 profiles of salespeople generated using eight factors (criteria) with five levels each. When profiles are generated orthogonally, it ensures that the criterion does not depend upon each other. The five levels of performance were indicated using a five-point fuzzy rating scale adopted from Dursun & Karsak (2010). In the questionnaire, each of the criteria levels (of salespeople profiles) was color-coded so that respondents can quickly screen potential candidates. The color-coding scheme is: VP: Very Poor (Red), P: Poor (Pink), F: Fair (White), G: Good (Light Green), VG: Very Good (Green)]. These 49 profiles of salespeople are provided in Table 4. These 49 profiles are varying on 4 criteria (and 8...
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