Mini Case: Massachusetts Restaurant Appliances
Question :
In order to know which salesperson did the best or worst in 2004, the percentage has been calculated for sales and quota.
Answer :
MiniCase: Massachusetts Restaurant Appliances
1. The requested performance ratios by Epstein are calculated and shown in the tables below. The first table shows the raw data from the case, and the second table shows the calculated ratios. Each ratio showed different individuals performing well, so initial rank has been shown individually.
Raw Data
Ratios Calculation
Here, it can be seen that each salesperson is good at something in comparison to others. Therefore, at this point identifying the one is better than others overall is difficult. One method can be to calculate the average of the ranks received by a salesperson on all ratios. And the salesperson who receives the highest average rank will be deemed best among others. The calculated average for each salesperson is shown in the table below after ranking each person on all variables separately. For all ratios, except sales expense, those who achieved highest received Rank 1, and those who received lowest received Rank 8.
Rank Calculation
Here, it seems that there is no single winner on averaging. However, there is one who is doing worse - Smantha Kerrey - on overall ranking. Most of the ranks have clashed. However, one thing that should not be ignored is that all these variables have their own level of importance, and using the average ranking method dilutes the importance. Thus, this ranking may not be considered as definite for the sales representatives.
2. The advices for each of the salesperson are given below:
Daphne Gellar: Focus on improving upon previous year’s sales, and try to increase sales per account.
Derek Francona: Focus on improving upon previous year’s sales, increase sales per account, reduce sales expense, and increase orders per call.
Erin McCloud: Focus on achieving given sales quota, reduce sales expense, and increase orders per call.
Jennifer McCarver: Focus on reducing sales expenses.
Johnny Schilling: Focus on increasing order count per account, rest performance seems good.
Manuel Lopez: Focus on improving on calls per day.
Robert Smythe: Focus on achieving given sales quota, and increase order per call.
Smantha Kerrey: Need major improvements on several variables. Focus on sales growth from past sales, achieve sales quota, increase sales per account, and increase order count per account.
3. This evaluation system has several limitations. First limitation is that it does not take into account the importance of each variable separately. For instance, the number of calls a day is less important than the number of sales. Moreover, the system does not take into account other internal and external variables that might be impacting the performance of the individual such as change in the market scenario (Churchill et al). Sudden changes in the market conditions are also not taken into account here, that is important as well. One major addition that Epstein can make in this evaluation is that along with quantitative data, Epstein should start collecting qualitative data as well. This will help get a clearer and in depth picture. It will also help Epstein gain insight into the ways a particular sales person can be improved.
References
Churchill, Gilbert A., et al. "The determinants of salesperson performance: A meta-analysis." Journal of marketing research 22.2 (1985): 103-118.
