GB533 Unit 8 Performance Evaluation Memo Example

First by Revenue, Last by Share of Potential: A Unit 8 Performance Evaluation Memo for Dental Representatives

[Student Name]

Purdue University Global

GB533: Salesforce Management

Unit 8 Performance Evaluation Memo

[Instructor Name]

[Date]

The distributor, its representatives and every figure are composite and illustrative; the sources cited are real.

To: Vice President of Sales, Palmetto Dental Supply

From: Sales Operations Manager

Subject: How we evaluate territory representatives

Recommendation

Evaluate territory representatives on a weighted scorecard: 60 percent results, measured against quotas derived from territory potential, and 40 percent activity, measured against the call and discovery standards the training program set. Stop ranking representatives by revenue alone.

Table 1: Two Representatives, Last Year

Raleigh representative. Sales: $3.4 million. Territory potential: $15.8 million. Share of potential: about 21.5 percent. Gross margin: about 29.5 percent. Planned calls completed: about 72 percent.

Florence representative. Sales: $1.7 million. Territory potential: $5.3 million. Share of potential: about 32.1 percent. Gross margin: about 31.2 percent. Planned calls completed: about 98 percent.

The Raleigh representative sells twice as much, but from a territory with three times the potential, and could not cover it: more than a quarter of planned calls went unmade, mostly to B practices and prospects. The Florence representative captured a much larger share of a small territory while completing almost every planned call.

Revenue rankings measured which representative had the larger territory; they said little about which one was doing the job better.

Table 2: The Scorecard

Results, 60 percent:

Sales against potential-based quota, 40 percent. Quota is set at about 26 percent of territory potential, the regional average share, adjusted each year.

Gross margin percentage against a 30 percent standard, 20 percent.

Activity, 40 percent:

Planned call frequency completed, 15 percent.

Discovery notes logged within one business day, 10 percent.

Planned prospect calls completed, 10 percent.

Qualified specialist referrals made within five days, 5 percent.

Each measure is scored from 0 to 100, with results capped at 130 percent of quota so that one strong year in a single measure cannot dominate.

The Two Representatives Scored

Under the scorecard, the Raleigh representative reaches about 83 percent of a potential-based quota of about $4.1 million and scores about 68 out of 100 overall. The Florence representative reaches about 123 percent of a quota of about $1.4 million and scores about 93. The scorecard puts them in the order their share of potential suggests.

Why Both Results and Activity

Results alone can reward luck, such as a large practice choosing an imaging upgrade in a given year. Activity alone can reward busyness without results. In their meta-analysis, Churchill et al. (1985) linked salesperson performance to skill, motivation, role clarity and organizational factors, so any one figure gives only part of the picture. A mix of results and activity gives managers a fuller picture and tells representatives which behaviors the company values.

Why Weight Results at 60 Percent

The balance between results and activity is a judgment. Zoltners et al. (2004) suggest that the weight on results should rise as a salesperson's control over outcomes rises. Territory representatives strongly influence consumables sales but share equipment outcomes with specialists and practices' own timing, so results deserve the larger weight without dominating. If results were weighted at 80 percent, the Raleigh representative's unmade calls would barely count; at 40 percent, the Florence representative's strong share of potential would be undervalued. Sixty percent keeps both visible.

How the Scorecard Affects Pay and Promotion

The scorecard does not replace the compensation plan, which pays on gross margin against quota. It informs annual merit increases, promotion to senior or key account roles and decisions about coaching. Using it for those decisions, rather than revenue rank, removes the advantage that large territories gave some representatives in past promotions.

Using the Scorecard Fairly

Johnston and Marshall (2016) caution that performance evaluation should separate what a salesperson controls from what they do not. The scorecard does so by measuring results against potential, not history. It should also be paired with a conversation: the scores start a discussion between manager and representative rather than ending it, as the coaching seminar showed.

What the Change Means for Raleigh

The Raleigh territory will be split into three in the redesign, so its representative's next quota will fall in dollars. The scorecard will show whether the smaller territory is covered fully and grown. The low call completion score last year reflects an impossible workload rather than poor effort, and the evaluation conversation should say so.

Next Steps

If you approve, sales operations will build the scorecard into the customer system, publish the weights to the team, and run the first quarterly scorecards alongside the old revenue ranking for one quarter so that representatives can see the difference before it affects pay or reviews.

References

Churchill, G. A., Jr., Ford, N. M., Hartley, S. W., & Walker, O. C., Jr. (1985). The determinants of salesperson performance: A meta-analysis. Journal of Marketing Research, 22(2), 103-118. https://doi.org/10.1177/002224378502200201

Johnston, M. W., & Marshall, G. W. (2016). Sales force management: Leadership, innovation, technology (12th ed.). Routledge.

Zoltners, A. A., Sinha, P., & Lorimer, S. E. (2004). Sales force design for strategic advantage. Palgrave Macmillan.