Effects of considering uncontrollable factors in sales force performance evaluation

Abstract

Sales managers often make adjustments for factors such as territory difficulty or representative experience when doing performance evaluations. These adjustments may be subjective, they may be simple ratio calculations (e.g., sales divided by territory size), or they may involve complicated regression analyses. This research attempts an explanation of how and why these adjustments influence perceptions of the performance evaluation process, particularly its fairness and usefulness. Data from two surveys are presented. The first is an exploratory survey of sales managers; the second is a fuller survey of salespeople. Results show that making adjustments for territory difficulty increases perceptions of fairness and usefulness of the evaluation system among both sales managers and salespeople. Feedback quality is a key mediator of these effects for both groups. A different pattern exists with regard to accounting for representative experience. For sales managers, there are no effects on feedback quality or fairness or usefulness. Salespeople, however, rate systems that account for representative differences as providing better feedback quality, as more fair, and as more useful. © 2000 John Wiley & Sons, Inc.