Notes On Need for Evaluating Salesman's Performance:

       It is the basic responsibility and basic task of management to evaluate the performance of the salesman. The following are some of the reasons for evaluations:

1. Determination of Compensation:

       The salesmen are paid as per their productivity of their sales performance. Hence to determine their fair remuneration, it becomes necessary to develop a specific and uniform standard for judging their performance.

2. Proper Sales Planning:

       Evaluation is also required for proper sales planning. A periodic evaluation of performance discloses their relative performance which is needed by the management to make suitable changes in their different assignment as to different territory, products or buyers.

3. Promotional Decisions:

       Performance evaluation helps to follow a sound and merit based promotion policy. It also helps in proper selection and training of salesman

4. Motivation and Morale:

       Periodic performance evaluation of salesman motivates them in their effort and brings up their morale. This is particularly true if the salesman know on what basis their work is being judged.

5. Other Advantages:

       It also helps to disclose the weaknesses or short comings of marketing policies. Such appraisal also helps the management to make changes in its policy regarding selection and development of the sales force.

Methods of Evaluating Performance of salesman:

       Two methods are followed for evaluating the performance of salesman.

I Qualitative Method:

1. Personal Observation by Sales Executives:

       It is a subjective method of sales evaluation. Under this, the salesmen are rated by the supervisor of district or branch sales manager. Such rating can be made on the basis of efficiency of salesmen in handling affairs of the territory, accuracy in reporting, customer relationship and personal qualities like appearance speech and interest in the work etc.

2. Merit Rating:

       Rating of each salesman is made by the superior. The numerical scale ranging from high to low is used by the rater in rating the characteristics of a salesman. The most common characteristics that are used in rating are loyalty, cooperativeness, initiative, judgment, knowledge of company's products etc

3. Customers Opinion on Salesman:

       Sales manager and supervisor get regular feedback on their salesmen from the customers and dealers. The relationship of a salesman with the dealers, customers, contractors, purchasing agents etc has a deeper effect on his sales performance.

       A good customer and dealer opinion is a mark of success and a bad opinion is used as a sure sign of poor performance.

II Quantitative Methods:

1. Sales Records and Reports:

       A sales manager or the supervisor can make a weekly or monthly analysis of a salesman's performance on the basis of his sales records and reports. The record given on account of his sales, commission, traveling expenses, loss of working days, products sold and other facts about his activity.

2. Sales Quota:

       One of the most common methods of evaluating salesman's performance is determination of salesman's quota. A quota is a quantitative goals assigned to a salesman in respect to a sales territory. Quotas may be fixed in terms of units or rupees. While fixing quota, variables like market conditions, capabilities of the sales man, nature of territory etc are taken into account.

3. Ratio Analysis:

       Certain ratios are much helpful in measuring sales performance, in analyzing sales report and records. One such ratio is sales expense ratio. This ratio establishes the relationship between sales expense and sales volume. The lower the sales expense ratio, the better is the sales performance.

Problems or Difficulties in Evaluating Performance of Salesman:

1. Complexities of Salesman Activities:

       The duty of the salesman are numerous and varied. In addition to actual selling, they are also does various other activities like advising customers, taking sales stock etc. So, performance of each must be appraised carefully.

2. Results Appear Over Time:

       Another difficulty of appraisal is that the results appear over considerable period of time and not immediately. Management may recognize that good work is being done, but how much and to what quality level is the most difficult to determine.

3. Results are often not Measurable:

       For performance on many tasks, measurement is difficult if not impossible. For instance, it is very difficult to ascertain whether dealer relationship is improving or deteriorating in a particular territory.

4. Joint Efforts are involved in Sales:

       Salesmen in many situations do not work alone. They are guided by supervisors, branch manager, product specialists etc. the question now arise as to who is responsible for the sale and to what extent? So, how much the salesman has contributed to the sale is a difficult question to answer.

5. Variation in Territories and Competitiveness:

       Another complicated factor is the wide variation in territories under which the sales man work. The sales territory differs in nature, local condition and extent of competitiveness etc. Hence, common standard cannot be applied to evaluate their performance on uniform level.