SDM3

SALES AND DISTRIBUTION MANAGEMENT
BY: MUKESH MISHRA
Recruitment and Selection of sales Force

Sales
manager perform the sales force management function. They execute the entire human resource management function in an organization They recruit , select, train, motivate, lead, control, and compensate the sales staff for achieving the desired goals of the organization.

An effective sales force needs the attention and guidance of a sales manager so that it is motivated to remain attached to the organization for considerably longer period. This is necessary because a sales job is very stressful by nature and attrition rate in the sales professional is the highest. A mismatch between the ability and aptitude of a salesperson and the nature of the sales job usually makes a salesperson quit and look for better opportunity.

The vertical growth of salespeople is slow in many organizations, which results in their migrating to other organization, including those of competitors. A sales job has the highest probability of social rejection. E.g while prospecting takes the salesperson to many people only a few of these prospects ultimately qualify as customers. Social rejection from the industry sometimes demotivates the sales force and results in a change in career to another functional area functional area of operation.

Only
people with the right aptitude and mindset for building a career in sales should be selected, so that there is balance between the job description and the manpower selected. The selection and recruitment of efficient salespeople is always a competitive advantage for an organization.
Challenges in sales force selection

The most important challenges are 1.Determination of characteristics that differentiate candidate who perform better.
2. Measuring these characteristics, 3. Evaluation of the motivation level of the candidates for the job and organization, followed by a decision on who will make the ultimate selection decision

Many organizations look at the personality types suitable for the job, though there is no standard evaluation of which kind of personality has the highest impact of job performance. Organization culture is also an important factor. Different people in organization seek different characteristics in that employees . E.g. Top management may expect a salesperson to posses more managerial capabilities, the field sales force may expect to have more of selling skills so that the desired level of sales output can be achived.

In
the hiring process, the attempt of an employer organization is to measure the ability of a candidate rather than his level of motivation. Motivation measures are also important because performance is defined as a sum total of the ability to perform a job and the motivation to do so. Performance= Ability X Motivation
Turnover Establish hiring objectives Planning
Strategic position analysis Decide on the number of people to hire
Job qualification Job description
Identify best sources of recruitment: internal and external sources Recruitment Generate database of candidates Evaluate candidates
Selection Socialization
Select and induce candidates to accept positions Socialize
Organizational characteristics, company image and climate, styles of supervision, compensation, and motivation of the company
The hiring process
Strategic Position Analysis

1. 2. 3. 4. 5. 6.
It is a systematic procedure that describes the way a sales job is to be performed. It consists of six steps Determination of performance measures The identification of the critical success factor. The performance dimension of the position The determination of performance measure dimension The operationalization and the establishment of performance. The standards and the design of the assessment tools

The
performance measure for a sales position can be consistently maintained at a profitability level of 105 by achieving sales quota over a period. The next step is to perform a key activity analysis of the job within a stipulated time required to conduct each activity E.g. a salesperson may have to divide the time appropriately between prospecting and making sales calls for closure in 60:40 ratio.

After determining the performanc measures, a sales manager determines the performance dimensions required to perform job activities. This include the knowledge and the various skills like leadership and motivation skills, and the occupational knowledge required to perform job in a better ways. After identifying the skills required for performing the job, sales manager evaluates the sales staff history and divides the sales staff into three categories-ineffective, effective, and overperforming.

The sales manager then identifies the critical incidents in the organization and sees how individuals in each category have performed in the past and have demonstrated one or more of the activities of the performed dimensions. The activities of the individuals, their performance level, and the results of the performance are analyzed for the purpose of comparison and classification. The performance standards so created become the basis for the designing the assessment tools in the process of hiring new salespeople.

The
sales manager next job is to find out no. of sales people required. The formula to calculate the expected number of sales person needed for the future requirement N= S/P (1+T) where N= numbers, S= sales forecast, P= present average sales, T= attrition rate of salespeople
Job Analysis
Job analysis identify job duties and responsibilities as well as critical activities to be performed for the job success. A job analysis consists of following steps 1.Analyse the environment in which the sales person is to work. This includes nature of customers, competitors, and knowledge and skills required for the job. 2. Determine the duties and responsibilities that are expected from the salesperson. This information can be obtained from the sales manager, salespeople, customers, ad and promotion manager.
Job Analysis
3. The person conducting job analysis may be a person from the sales team, or human resource department, or an outside consultant. This person should also spend time making customers calls with some salespeople, observing and recording the various tasks or activities performed
Job Description
Companies use job analysis to develop job description. Job descriptions are formals, written statements describing detailed account of the job. Most well- prepared job descriptions generally cover the following points 1.Title of job- A complete description so that there is no vagueness. this is particularly important in an organization having many type of sales job. Some of the title are sales executive, marketing executive, sales engineer, BDO.
Job Description
2. Reporting Relationship- To whom salesperson will report. 3 type of product 4.Type of customers called on 5.Duty and Responsibilities- e.g. visit planning, selling, customer service, information cllection and communication, report preparation and payment collection from customer. 6. Job Demand- Mental nad physical demand of the job, such as travelling, achievement of sales and other targets. 7.Technical requirements: the degree to which the salesperson needs to understand the technical aspects of the products and service that are sold. 8. Location and geographical area to be covered
Developing job Qualifications/Specifications

Duties and responsibilities in job descriptions should be converted into job qualifications, or job specifications. A sales recruit should have these traits in order to perform well on the job. Determining the job qualifications or specifications is probably the most difficult part of the entire staffing process as there is no accepted traits and abilities of salespeople for success across various selling position.
Developing job Qualifications/Specifications

Many studies have attempted to determine which qualifications are most important for a sales position as below Super achiever show following traits: risk taking, powerful sense of mission, problem solving bent, care for customer, and careful call Planning. Effective salesperson has two basic qualities empathy(ability to feel as the customer does) and ego drive( a strong personal need to make the sale)
Recruiting the Sales Force

This stage includes a) Finding or identifying the sources of recruits. b) Evaluating and selecting the recruiting sources. c) Contacting candidate through the selected source

a)Identifying the source of sales recruits For identifying or locating prospecting candidates, companies use internal and external sources Internal Recruitment sources 1. Lateral and upward move Sales people can move to higher positions in an organization after completion of desired years of service or through lateral movements from one territory to others

Most
sales manager are hired from the internal sources through the elevation and transfer of existing sales force. The advantage of such movement is that incumbents posses the knowledge of market, the product, and the level of competition based on previous experiences

2.Interns Students Interns who work on a part-time basis in an organization while pursuing their studies. It includes all those employees who are either paid part-time or are non paid and who take up jobs in order to get work experience while studying

3. Employee referral programmes Many organizations value the referral given by the employees. Employee referral programmes are incentive programmes designed to reward an employee currently working in the organization for identifying and recommending candidates who are subsequently hired by the organization Currently employed salespeople understand the needs of organization and job and are often in a position to make referrals of people who can contribute to the organization`s goals. As salespeople are in the market, they possess information of employees who work for other organizations and can recommend hiring them in their own organization.

4.Advertising Classified advertising and recruitment advertising draws a large no. of potential applicants. This method helps to get the bright applicants who would not have applied otherwise. The problem with this method is that it brings in large no. of applications that donot qualify to be the applicants otherwise, and the processing of these unqualified applicants involves wastage of money and financial resources of the sales organization

5.Employment agencies It constitute the traditional method of recruitment in the India Market. The govt. has established employment exchange all across the country and many unemployed youth register their names in these exchanges. Sales organization collect their names as per the job description and invite prospective candidate for recruitment. There are many private employment agencies in India. Some of popular agencies include ABC Consultants, Mafoi Consulting. The benefit of using employment agencies is that they have a captive database of the employees and sales organizations can substantially reduce the time in inviting applications and scrutinizing them for identifying qualified applicants

5.Walk-ins Many organizations find it convenient to use the method of walk-ins for recruitment. An observation of the recruitment practices in Indian Markets indicates that there are emerging trends where organizations prefer the walk-in methods of recruitment rather than the formal recruitment ad. Walk-in include unsolicited applications given by applicants. Going to the organization for selection with a readymade profile and getting selected through walkins is one of the most convenient methods for job seekers in metros

6. Networking Many aspiring candidates build up network among family members, friends, and acquaintances so that they can get call for recruitment. Sending a resume to the personnel department may not get the desired response but if the resume goes through the network, then the chances of getting a call for selection improve. In this context organization also take advantage of these networks for collecting information about potential candidates, particularly when the organization is looking for recruit at entry level.
Selection of Sales Force

Selection is the process of hire or no hire decision regarding each applicant for a job. A sales manager obtains the database of candidates to selected from recruitment stage. Selection is the mechanism that determines overall quality of the human resources in an organization. It is the process that determines whether or not an applicant meets the qualifications for the specific job and selects the applicants who is most likely to perform well in a job.
Selection Process of Salespeople

1. 2. 3. 4. 5. 6. 7. 8. 9.
Screening Resumes Application Blank Psychological tests Aptitude and skill test Personal interview References checks Determination of terms of service Appointment Initial orientation
1.Screening Resumes To reduce the no. of applicants, initial screening of resumes is done by the sales managers, based on comparison with job specifications that was developed earlier in planning stage. 2.Application Forms The objective of the application is to collect and evaluate information about the applicants physical characteristics, educational qualification, and employment history. This also helps managers to prepare for interviews with the job candidates. It is easy to find out job hoppers from the application forms by looking at history of their jobs in the recent years and one can use them during interviews to find out the reasons behind such behavior.
3.Psychological tests, aptitude and skill test These set of tests are used by many sales organization aimed at measuring the mental ability and personality characteristics of a salesperson. A variety of tests measure different abilities including verbal, qualitative and cognitive skills. A cognitive ability test measures the applicants potential in certain area such as quantitative mathematics and is a good predictor of job performance.
A higher level of cognitive abilities indicates that the person can learn faster and quickly adapt to organizational settings. People with a higher value are found to be top performers in organization. Aptitude tests are conducted to detect if there is any problem in persons sensory processes and intellectual capabilities. The sales manager focus on a particular talent like learning skills and the level of reasoning. This method measures the person`s current level of skills at certain tasks with an assumption that some set of skills and abilities can be taught and developed through training and development programmes.
Personality tests aim at measuring non-intellectual characteristics of the salespeople that include modification interests, ability to adapt and adjust, desire for level of interpersonal relationships. Modern days sales recruitment and selection method use newer method such as achievement tests or proficiency tests. These tests are useful in situations when an experienced person is to be appointed as a salesperson. Temperament tests help to evaluate various factor of temperament, such as likes and dislikes, habit and preferences. Attitude tests are conducted to see the attitude of applicant towards business conditions, organization, nature and condition of employment.

4.Personal Interview Sales manager conduct personal interviews to an insight into an applicant`s mental abilities and personality It also helps a sales manager to assess the applicants personality, the level of appearance and intelligence, communication skills, the degree of sociability among peers, aggression level, ambition and other personality elements necessary to smoothly conduct the sales job
Interview techniques a) Unstructured Interview In this method interviewer begins by asking a few open ended questions like tell me about yourself. the interviewer gets the applicant talking on subjects such as school and college activities, achievements in life, work ex and so on. The basic concept is that applicant`s traits or characteristics are discovered, if the applicant is encouraged o speak freely. It takes a highly skilled interviewer to use non directed type of interview effectively. Research has clearly shown that unstructured interview type is not accurate in predicting the job performance of salespeople

b) Structured interview It is based on the through job analysis where the sales manager applies a series of job related question with predetermined answer consistently across all interviews for a particular sales job. There are three type of questions asked during a structured interviewed
Situational You have planned a holiday and suddenly you remember that you were supposed to meet a client at the same time. This has somehow slipped from your mind last night when you made a day plan. What should you do in this case? Job Knowledge what is correct procedure of closing a sales for a service and how different do you think it closing a sale of FMCG? Salesperson Requirement some period of year are really hell due to the seasonality of demand and a salesperson has to work overtime on the job, what do you think about working overtime?
A situational question tries to elicit from applicant how they would respond to a particular work situation. These question can be developed fro critical incident technique of job analysis. The sales manager rewrite situational question from critical incident behavior and then generate and evaluate possible answers. The applicants response are evaluated on the basis of comparison to the already developed questions and response. Job knowledge question assess whether on not applicants have the basic knowledge to perform the job
From the modality of conducting interview, some interviews are categorized as stress interviews. In stress interview, sales manager and the interviewer take a hostile role towards applicant. he deliberately put him on the defensive by trying to annoy, embarrass, or frustrate him. Many organizations also conduct group interviews and discussion as a method of weeding out the worst and identifying best among the invited applicant Here group of applicants are interview simultaneously. those who take a lead in the discussion, influence others, and speak effectively are selected.
The in basket exercise is most common method of selection. This include problems , messages, and reports that might be a part of the basket of performance for the salespeople on the job. The applicant are asked to deal with these issue as they see fit and then are assessed on how well they have prioritized the issues, how creative and responsive they are in dealing with each one, the quality of their decisions, and other factor related to the job. An interviewer should stay focused and should not move into asking peripheral questions and should concentrate on the objective of hiring to perform job at hand.
7. Determination of terms of service. After the candidate has successfully cleared all the above tests, the term of service are fixed for the selected candidates. The term of service are related to compensation patterns and types, including salary, commission structure, allowances including travel and medical, which are determined before the appointment letter is issued to the selected candidates.
8. Appointment The appointment letter is issued to the selected people at the end of selection exercise. It contains the terms and conditions of service with regards to compensation and allowances, probationary period, the last date to join duty. 9. Initial Orientation It is a process aimed at providing the job related and organization related information to the new salesperson. This includes the origin and growth of the firm, the policies, procedures and regulations governing the job in the organization, information about sales department and its structure, current structure and market standing of the sales force etc.

Socialization It is defined as the process of orienting a new salespeople to the sales organization or the territory or division in which he will be working. It is a process by which new employees are introduced to their work environment, territory, and to the job.

Process of Socialization Anticipatory stage b) Encounter stage c) Settling in
a)
a)
Anticipatory Stage it is the first stage where new employees have different kinds of expectations about organization and job based on the information available with them The best method to create appropriate expectation is through a method called Realistic Job Preview(RJP).In this method, a sales manager provide a realistic picture of job demand, the organization expectation of salesperson and the work environment in the organization.
b)Encounter stage In this stage , the new salesperson has started working on the job and faces the reality. Even if RJP is provided, a new salesperson may need additional information about company policies procedures, reporting relationship. This kind of information is required for both the experienced one who came from different organization as well as for new recruit. Such an attempt to provide new information helps in forming a better image of the company in the eyes of salespeople and also makes the employees feel valuable in the organization.

c) Settling In In this stage new sales people start feeling that they are the part of organization. If this stage is successful, the worker will feel comfortable with the job and his role in the sales territory. A programme called `employee mentoring` performed under the supervision of an experienced employee of the organization helps a new employees to settle down with the job and in the organization with success.
Training the sales force

New sales recruit need proper training and guidance to perform their jobs efficiently. A sales manager plays an important role in evaluating the training needs of the sales force and deciding on the kind of training a sales person require to achieve organizational goals. A sales manager should exploit the talent of the new recruits and utilize their service with effective training for increasing their productivity and efficiency level.
Managing The Sales Training Process

Assess Sales Training Needs 2. Design and Execute Sales Training Programme 3. Evaluation and Reinforcement of Sales Training programme
1.

Assess Sales Training Needs A)Training need assessment phase a) Organizational level analysis A sales manager evaluates the macro issues like organizational structure, mission , business climate, and long and short term goals
1.

b) Task Level Analysis This analysis examines the sales job to be performed at different levels . It focuses on all the functions and jobs in sales and determine which one of them needs the attention of training program. The KSA`s are identified and information from these are used to determined the type of training required by sales department c) Personal level Analysis It helps to determine all those sales people who need to undergo the training programme. This is done by assessing performance of the sales staff.
Managing The Sales Training Process Methods used for assessing training needs
a)Sales Manager Observation Asm spend a lot of time in the field working with the sales people. So he observes the need of particular sales training based on the specific short comings of the sales person. b)Sales force Survey To identify the training needs of the sales people it is important to conduct sales force survey as an independent activity or combined with other sales activities like sales report. How ever if field sales manger and their sales people disagree on the training needs, it is better to discover this disagreement and find a solution before designing the sales training programm
c) Customer Survey The customer survey helps to understand customer expectations, the company`s sales people `s competencies, as compared to that of other salespeople in the same industry. d) Performance Testing Some companies test knowledge and skills of sales people by coducting performance testing of sales people on regular basis. Sales trainer evaluate the performance of sales person on presentation skills, product knowledge, CRM etc.
e) Job Description It mentions clearly the duties , responsibilities, and the key tasks or KRAs of the sales people. It is , therefore, a logical tool to be used in assessing the training need. f)Sales force Audit As a Part of marketing audit or sales audit, some companies use sales force audit for assessing training needs of sales people. Generally conducted in one year, the sales force audit asks question on the training programmes about its adequacy, contribution, and revision.
Popular Sales Training need a) Product Knowledge it includesadvantages,benefits,applications, and limitations. If the product or service is technically complex, more time is spent in giving detailed knowledge. b) Customer Knowledge The sales training may include relevant information about the company`s customers, such as type of customer, knowledge of customer business, customet need, buying motives.
c) Competitive Knowledge Knowledge of competitors products or services, in the term of strengths, weaknesses, strategies and tactics as well as prices, discounts, payment terms is very important for sales people to plan sales strategy. Competitor`s knowledge would help a sales people during a sales presentation, overcoming customer objections, negotiations, and finally closing the sale
d) Sales Technique or Selling Skills Many sales people are not competent enough in sales technique and hence they need training on `how to sell`. There are many common shortcomings like ineffective questioning and listning skills, giving benefits befor understanding customer need which can be removed by a good training program.
e) Company Knowledge new sales trainee should be told about the company`s vision, mission values, objectives, organizational structure.. Leave policy etc. Training is required about company selling practice, sales call per days, how to handle returns from customers, expense account , sales report and so on. Channel of communication, and key people in organization structure are important for new sales people. It is also required for the trainee to understand the history and any other relevant background information that helps to develop a sense of pride about the company.
2.Designing and Executing Sales Training Programme a) Aim (Why?) b)Content(What?) c) Methods(How?) d) Execution(Who , When, Where What) e) Evaluation
a)Aims/Objectives of sales training Increase sales productivity Lower sales force attrition rate Improve customer relation Introduce new products, markets and promotional programmes. Create positive attitudes and improve sales force morale. Prepare new sales people for assignment to a sales territory
b) Content of training programme The content of initial training for new sales trainees will be broader and different from the content of refresher or continuing training for experienced salespersons. Usually the content of the training program of new sales people for initial training will include company knowledge, product knowledge, customer knowledge, competitor knowledge and selling skills or sales technique. The content of continuing training programm for existing and experienced sales persons will be more specific , depending on the training needs and objective.
c) Sales training Methods

Class room Lectures Demo Group discussion Behavioral Learning Role playing Case study Simulation games

Online Training EPSS(electronic program Support system) Interactive Multimedia Training Distance Learning
Sales training method Absorption Training/ Self study Audio Cassettes Manuals, Books CD ROM On the Job Rotation Mentoring Job rotation

d) Organizational Decision for sales training 1. Who will be the trainees? 2. Who will conduct the training? 3. When should the training take place? 4. Where should the training be done? 5. What will be the budgeted expenditure for the training?

e) Evaluation of Sales Training Programme It is difficult to evaluate ( or fid value of)a sales training programme. This dificulty arises because it is hard to decide which sales performance variations are due to sales training.. In spite of these difficulty most companies measure the effectiveness of sales training to evaluate whether present expenditure on the sales training is worthwhile, and to imrove the design and implementation of future sales training programmes.

a)
In evaluation, the company must decide what outcomes will be measured?, how the item will be measured, and when to measure these outcomes These outcomes fall into following four category Reaction These outcomes point the participants perceptions or reaction. Whether the sales training achieved the objectives and whether the training was worthwhile. Reactions of sales trainees, can be measured by interviewing or asking them to complete a few questionnaire.

b) Learning The outcome measures how much knowledge, skills, or attitude were learnt or absorbed by the sales trainee. The information collection methods used are test and interview method. There may be `before` and `after` tests or interview taken after test.

c) Behavior The outcome here measure whether there was a change in the trainee`s behavior. The assessment of the trainee`s change of behavior is conducted by immediate supervisor, who can observe the trainee after the sales training, over the period of one year. The measurement may also include selfassessment by the trainee or observation from customers.

d)Results It point out whether the outcome of training has improved performance results , and whether the benefits of training were more than the costs. The measures used to assess the final results are: sales, profits, customer satisfaction, no. of new customers, and market penetration. The methods used to collect the relevant data or information on results are: company data( on sales, profits, no. of new customer) market survey(for customer satisfaction) and immediate boss judgment. These result can be measured every quarter for one year, after the training
Evaluation of Sales Training Programme
It is done to improve training design and implementation, and to find if expenditure was worthwhile Framework for sales training evaluation:
What to measure Training objective Was training worthwhile? How to measure Questionnaires interviews Tests Interviews When to measure After the training
Outcomes to measure Reactions / Perceptions of participants
Learning knowledge, Knowledge, skills, skills, attitudes learnt attitudes Behavioural change Trainees change of behaviour
After training Before & after training
Self-assessment by After training, over a trainees period of one year Observation by supervisors / customers After training, Quarterly, Yearly
Results Sales, Profits Company data Performance; Benefits Customer satisfaction Management more than cost? judgement Market survey
Sales Force Motivation

In
many organization s, people don't perform their job well. This is not because they dont have the skill, but because they don`t have commitment to the job due to the lack of motivation. Individual on organizational matters restrict them from applying themselves to performing a sales job up to the potential.

This affects the overall productivity of the sales organization. Problems of motivation in organization arise due to the lack of effort on the part of the sales people in performing the job. This results in frequent tardiness and absentism and leads to a high level of unwillingness to finish the job in time and achieve the sales goal set for the period in the territory. One of the biggest challenges for the sales manager is to keep his sales team constantly motivated and meet their commitments.

Motivation is that element of the sales person that stimulate him to increase the efficiency of his work and thus achieve higher goal. It implies any emotion or desire that energizes, activates, moves, direct,or channel behavior towards goal
Performance(P) = Ability(A) X Motivation(M)

Importance of Motivation 1 . Sales people get demotivated due to frequent rejection Sales people have to put in a large effort to realize sales in the market. They get demotivated due to frequent rejections by customers, lower esteem to the sales job, and customer complains about the non-compliance of the product and service. The sales person perform the job as a sole individual has no formal and fixed office hours and faces stiff competition from the market.

2 The nature of sales job Sales people have to the job of prospecting, presentation, and demonstration repeatedly, which make the job monotonous. Sales people often find a sales job to be boring not stimulating in long run. A sales manager has to find the source of motivation and designs systems and procedures to motivate the employees to remain committed by identifying the sources of demotivation and developing a reward system

3. Frequent Travelling and socialization Due to frequent travelling, the sales people has to face domestic problems an may not be able to have a normal family life. This can hamper their efficiency and, to overcome this, the sales manager should develop special leave and financial reward programmes for motivating sales people.

Sales people work in field, are not under direct supervision of their superiors, and have less contact with their peers and co-workers. They remain busy with their job at different places, which hamper the normal process of socialization. Sales manager should organize conferences, seminars, and workshops to provide an opportunity to the sales people to develop a sense of belongingness and to provide an opportunity to the sales people to develop a sense of belongingness and participate in the process of socialization.

4. To be remain in their job Efficient sales people posses good knowledge about their job can sell goods and services . It is observed that the majority of the sales people would like to maintain an average level of sales so that they can remain in the job. A sales manager has to put substantial efforts into the motivational programme, so that they can discover and utilize their hidden talents and do their job better.

5.Conflicting company objectives Sales people are required to achieve the company objectives and goals , such as sales volume, profits and customer satisfaction. Sometimes these objective conflicts. For instance , a customer is satisfied if the sales person confirms matching the competitors price with the company price. However the company management is unable to do so, because by bringing down the company`s price to level of competitors price, the company can not achieve the profit objective. The sales person is frustrated that after putting a great amount of efforts, the order from the customer is lost to a competitors.

Motivational Drives 1 . Security Every motivational programm should aim at providing a sense of security to the sales person so that the apprehensions about future will come down and he will be able to contribute without looking at issue related to his basic survival and satisfaction of physiological needs. E.g. performing beyond the quota level achievement takes them to receive bonds and equity share of the company as a part of incentive programe.

2. Achievement The sales person must know in advance the achievement that he will have from the motivational programme. If there is no sense of achievement in a motivational programm, it can not stimulate the sales person to achieve the higher goal. E.g. crorepati agent scheme from LIC.

3.Approval Sales people also look for social approval and they expect that the good work by them should be praised, approved, and rewarded by the sales manager. An appreciation among peers does wonder compared to a financial reward system. E.g. cruise to Caribbean with the CEO.

4. Loyalty If the interpersonal relationship is good between manager and salespeople and there is a high sense of social respect for each other, the sales person tends to develop loyalty towards the organization and respect towards the seniors and managers. On completion of the no. of years in the company, sales person are felicitated and functions are held to appreciate and recognize the loyalty of employees.

5. Advancement 6. Leadership
Motivational Tools in a Motivational Mix

Financial Financial compensation plan Salary Commission/Incentive Bonus Fringe benefits Combination Sales contests Non Financial Promotion Sense of accomplishment Personal growth opportunities Recognition Job security Sales meetings Sales training programmes Job enrichment Supervision
Financial compensation is the most widely used tool of motivation, as salespeople give highest value to it
Evaluation of the sales force

By evaluating the performance of the sales force, a sales manager can test the effectiveness of the sales programme and the quality of implementation of the sales programme by the sales people. Performance appraisal is the process of evaluating the performance and qualifications of the sales force in terms of the requirements of the job to ensure effective administration, including the selectiion for promotion, rewards, and other recognitions in the organization.
A sales manager needs to identify and determine the specific areas of work to be examined while appraising performance. The appraisal system should be planned based on job analysis. It should focus on the performance of the salespeople and have an effect on the organizations future. It should be based on the past achievements of the sales force and have a futuristic proposition so that the sales manger can find strategies to tap the potential of the sales people for the benefits of the organization

Performance Appraisal Process a) Deciding on the criteria for measuring performance. b) Deciding on the conduct of the performance appraisal c) Deciding on evaluation of individuals and teams d) Comparison of actual performance with standards e) Deciding on the frequency of the performance appraisal f) The external Variables and their influences

a)Deciding on the criteria for measuring performance 1. Relative and Absolute Judgment In the relative Judgment method, the sales manager is asked to compare the sales person performance with that of other salespeople on the job. A rank order for sales people from the best to the worst performer is developed in such mthod

This method does not provide any absolute information and leads to an indecisive attitude among sales managers. This may lead conflict within the sales force over the ranking given to sales person. In absolute judgment method sales manager is asked to make judgment about salesperson performance based on sales volume, market share or revenue realization. Here, the comparison among sales people in different territories facing different selling situation becomes irreleant

2. Trait-based The sales force can be evaluated based on some criteria related to traits, outcome, and the behaviour of the sales force. Traits based instruments are used by sales manager to make judgement about the sales person traits and selling characteristics that tend to be consistent and enduring. Most commonly used traits for this purpose are decisiveness, reliability, energy, and loyalty. Demerit of this method is it is based on personal traits rather than the sales performance

3.Outcome-based It is performance criteria based on outcomes instruments that allow mangers to assess the results achieved by the sales force are the amount of sales, no. of products sold in units or volume, profitability as a net margins, and sales expenses as a ratio of costs to sales. The most common approaches used in this method are MBO and Natural Outcome. MBO is a goal- directed approach to performance appraisal in which sales people and manager together set goals for the upcoming evaluation period. In natural method , the performance measure is not much discussed and is assumed to be acceptable by the sales people

4. Behavior Based This method focuses on the behavior of the sales people and does not focus on traits or performance outcomes. The behavior measure is related to selling activities and for this the sales manager records how frequently behaviors listed in a checklist of rating have occurred. This rating assesses the value of the behavioral measures rather than their frequency of occurrence and it includes product knowledge, presentation quality, closing ability, service performed, the number of active accounts, and relationships with customers

Method of Sales Force Evaluation 1.Essays In this method sales manger describes the performance of the sales person in few paragraph. He maintains details like individual potential, strengths, weakness and other relevant matters. The basic of using this method is assumption that a written or word of mouth statement is as reliable as any other formal evaluation method. Demerits of this method is different managers use different approaches to writing their evaluation and a different way of interpreting and rating characteristics required for a particular job.

2. Rating Scales In this method of performance evaluation, the sales manager identifies certain specific criteria for a particular type of job. The criteria may be based on personality traits and behavioral factors, or they may be performance related. The sales personnel are evaluated based on the extent to which they meet the desired performance criteria The advantage of this method is that it helps identify areas where the sales person has to improve or maintain the desired levels of performance. Disadvantage is that most recent behavior of the sales force is considered without looking at the sales person behavior for a period of time.

3.Behavior Observation Scale(BOS) This method consider those behaviors and activities of sales personnel that significantly influence individual performance. All the behaviors that are similar in the job context are grouped together under single dimension. E.g certain behavior can be grouped under dimension `customer relationship`.

Around ten such dimension are generally rated to measure the performance of sales person. After the dimension of particular job type are established, they are given in a random order to a group of specialists to rate the dimensions again. if the rating is similar to the rating given previously, the dimension rating of that particular job type is fixed. A five point likert scale is used for each of the ten dimensions. This evaluation form is given to a respective sales managers to rate each crucial behavior for all the dimensions based on their observation.

4. Forced Choice Method It is method of rating that helps in comparing sales personnel by creating standard for measuring sales force performance. In this method , the sales manager is asked to go through groups of statements and select those that best explain the individuals. Usually within a group, both or all statements are either positive or negative. The rater is forced to choose what describes the sales person best from a group of all positive or all negative statements. Each statement is given a weight that the evaluator is not aware of. The form is evaluated by personnel dpt. and the sales person with the maximum score is rated the highest The advantage of this method is that it helps remove rater bias

5. Ranking This method of performance evaluation is useful when the sales personnel in the entire sales force working in different areas have to be compared. Ranking is pereferd when sales personnel from different operating areas have to be evaluated for promotion or for increase in compensation. Alternation ranking and paired comparision ranking are most commonly used ranking methods

In
alternation ranking, sales person are listed randomly on the left-hand side of the evaluation sheet. The name are selected based on the criteria chosen for ranking. E.g. the sales manager chooses the best sales person from the list(if the ranking is done to increase the compensation) and write the name on the top right hand corner.the name of the least valued sales person is placed on the bottom right hand corner.

Now, the sales manager keep alternatively keep writing the name until the list is complete. The new list is the ranking profile of the sales personnel for increase in compensation. In paired ranking list of sales person is writen on the left hand side of the appraisal sheet. Now based on the criteria selected each of the sales person is compared with the rest of sales person in the list.for each comaprision a tally is given. The sales person with highest tally is ranked no. 1 and the sales person with the lowest is ranked last.

6. Family of measures(FOM) This method is useful to measure individuals as well as group performance. FOM does not compare the results obtained with those for others sales force; it compares the result with the previous result over a time period. The method is continuous evaluation process and the results are not linked to the sales force pay. It is flexible in approach because it allows sales personnel to assign weights to each area based on the difficulty of work and the experience of the salesperson.

FOM
is used to develop the performance of the sales personnel on a continuous basis by identifying weak areas and improving on them with the help of special training and coaching given by sales manager. The company give special recognition to those employees who have shown significant improvement in their performance.

7.Call Reports Call reports are periodic accounts and customer statements prepared by sales persons of how they are dividing their working time between various aspects of job like prospecting, demonstration, and follow up. 8. Silent call Monitoring Scores It consists of sales managers rating of the sales persons performance during actual calls to the customer. The rating can cover a wide range of issue like greeting, ascertaining customer needs and demands, courtesy, and the level of communication and listening skills.

9. Activity Reports It explain the unusual events and incidents that occur in the field as reported by a sales manager and sales people, including peers. This includes event like the launch of major price war by the competitor, increase in the dealer push money of the competitors and entry of competitors.

Conduct of performance Appraisal Biases Problem with sales person evaluation are known as biases in evaluation. Abias occurs when sales anager inflate or deflate the subordinates performance rating. A bias is either conscious or unconscious. A conscious bias can be either positive or negative. The positive conscious bias includes sales manager wish to help experienced sales person cope with the problem outside job

The
negative bias ia an attitude of getting rid of problematic sales people to avoid confrontation with an underperforming sales person. Such inflated or deflated ratings can also happen as a result of unconscious or judgmental biases. Some of unconscious bias are

a)
Base Rate Information It is the actual distribution of the outcome being assessed. E.g. customer satisfaction index comprising the satisfaction levels of all the customers. Under weighting of base rate information occurs when a sales manager either overlooks the average base rate of customer satisfaction and concentrate on a particular set of customers or incidences that are not representing base
When a sales manager makes field visits with a sales person and finds that calls are productive, he remembers this at the time of appraisal and despite customer customer cpmplaints tend to underplay the base score. The sales manager ignores the base rate information and allows his limited personal experience to the basic for making an evaluation. For overcoming such bias, sales manager should evaluate the sales people more frequently.

b) Availability Heuristics It is a bias that occurs when a sales manager assesses the subordinate based on the information that is available at hand. A heuristic is defined as a rule of thumb used while making a decision. A sales manager recalls the information, which is recent, and takes decisions depending on readily available information. A sales manger can make frequent observations to avoid the problem of the availability heuristics.

c) Anchoring Anchoring occurs when sales manager rate sales people using a scale. If there is a five-point Likert scale where the value of 3 stands as average, the sales manager tends to evaluate every sales person from a score of 3 and the rates the sales person to reflect his activity observed during the time period of study. The bias happens when the sales managers adjust rating in an unjustified way.

A sales person who received a high rating I one period is likely to be rated higher in subsequent periods due to the halo effects, even when his performance is not of that order. Same situation happens in fixing sales quota. d) Hindsight Bias A hindsight bias occurs when a sales manager discounts information received from a sales person because they believe that it would have happened anyway. In hind sight bias the salesperson brings information about market condition, competitors moves, and relevant customer behavior data for sales manager.

e) Regression effects It show the tendency of unusual observation to be followed by observations that are more typical of the company norm. When a sales person joins a new organization he uses all his connections in the joining year to realize sales but in the second year his sales come down because by then he has exploited all his resources.

f) Fundamental Attribute Error It occurs when a sales manager views sales people as having more control over the sales outcome than they actually possess. There are various factors responsible for the performance of sales people include the economic condition of the country, nature of competition in the industry etc.

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SALES AND DISTRIBUTION MANAGEMENT

BY: MUKESH MISHRA

Recruitment and Selection of sales Force

Recruitment and Selection of sales Force

Recruitment and Selection of sales Force

Recruitment and Selection of sales Force

Challenges in sales force selection

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Turnover Establish hiring objectives Planning

Strategic position analysis Decide on the number of people to hire

Job qualification Job description

Select and induce candidates to accept positions Socialize

The hiring process

Strategic Position Analysis

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Developing job Qualifications/Specifications

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Recruiting the Sales Force

Recruiting the Sales Force

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Selection of Sales Force

Selection Process of Salespeople

Selection Process of Salespeople

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Selection Process of Salespeople

Selection Process of Salespeople

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Training the sales force

Managing The Sales Training Process

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