Vol. 19, No. 22

March 2, 2000

Self-evaluations can be
effective management tools

The results of two recent studies by UD faculty member Cynthia Huffman, business administration, and Lisa Cain of the University of California, Berkeley, may provide valuable information to help employees and managers involved in sales evaluate performance and determine how that performance is affected by factors beyond the salesperson’s control. Motivating salespeople Sales managers looking for ways to motivate autonomous salespeople, who most often work out-of-the-office making sales calls, should try using formalized, written, self-evaluations, according to recent research by Huffman said. “Written self-evaluations can have a huge impact on the happiness and motivation of a sales force,” Huffman said. “Salespeople typically spend much more time alone and are much more self-directed than other types of employees,” she explained. “A salesperson in a remote territory may only interact with a sales manager by e-mail or over the phone. “A self-evaluation that says ‘Here’s how I think I’m doing’ is much more credible to them than one done by a sales manager they may only see in person once a month.” In the article “Self-Evaluation, Fairness and Motivation in Sales Force Performance Evaluation,” under review at The Journal of Marketing, Huffman and Cain report on two surveys that show self-evaluations benefit both salespeople and their employers. According to the surveys, out-of-the-office salespeople and sales managers both view self-evaluations as more fair than evaluations done solely by managers. They also see self- evaluations as a means to improve feedback and stir motivation and say that self-evaluation improves what salespeople learn regarding how they should direct their efforts to improve performance levels and which behaviors and strategies are likely to be more or less effective. “Self-evaluations ask employees to evaluate their own performance, skills or attributes, and they are highly recommended by organizational and industrial psychologists,” the article says. The idea is that they improve communications, trust and commitment to the organization. Self-evaluation is most important when an employee is more informed about his or her job activities in the evaluation period than the manager, as is the case with salespeople working outside of the office, Huffman explained. Huffman and Cain used two national surveys in their research. In the first, they surveyed 92 sales managers who participated in a sales force management education program at the Wharton School of the University of Pennsylvania. The managers represented 84 companies from 52 industries with sales ranging from $5 million to $4.6 billion. Each manager reported on an evaluation system with which he or she was most familiar. In the second sampling, 102 salespeople responded to an Internet survey cosponsored by Selling Power, a national magazine for sales professionals. Again, participants reported on the evaluation system with which they were most familiar. The salespeople worked for companies with sales between $1 million and $100 million. After establishing the benefits of self-evaluation, the researchers asked why the system is not used universally with salespeople. They found three likely reasons. The first result shows that time constraints are a big consideration. Secondly, there also is a tendency among salespeople to give themselves ratings that are higher than those given by the supervisor. Research shows, however, that because the salesperson’s biases are likely to be different from the manager’s, the communication that occurs because of self-evaluation can be helpful to both sides. A third reason that self-evaluations are not used more frequently relates to the supervisor’s indecision about how to use them. Questions of whether or not to tie the evaluations to raises, promotions and territory assignments or to use them as a tool for opening communication are important, but Huffman’s research suggests that employees perceive self-evaluations as valuable whether or not it is used for deriving performance ratings. “The bottom line is that salespeople love to have input into the evaluation process. It is worth the extra time and effort needed to put self-evaluations into effect,” Huffman said. Territorial differences In another area of study, Huffman and Cain look at the fact that a sales territory’s market potential, geographic size and competitive strength can account for as much as 40 percent of the variation in sales across a sales force. If so, then how do employers take these factors, which are beyond a salesperson’s control, into account when evaluating employees? Such topics are explored in the researchers’ article “Accounting for Territory Difficulty and Representative Differences in Performance Evaluation,” forthcoming in Psychology and Marketing, as they continue to explore how performance evaluations can be made more valuable to salespeople and sales managers. “Imagine two salespeople who did the same sales volume last year. First, there is Jack, who is young and new to the company. His territory is fairly sparse with low potential and his sales last year were $1.5 million. Jill, another rep, has been with the company for 10 years. She has a more dense territory with a steady flow of business and also did $1.5 million in sales last year. Who should get the higher evaluation?” the researchers ask. While is seems reasonable that salespeople should not be penalized for factors over which they have no influence, they should be responsible for their “real” performance. Research looks at whether or not these adjustments have positive effects or not. “One solution might be to adjust somehow for the territory potential or difficulty or both,” they say. “In order for the evaluations and ranking to be meaningful, the salespeople have to be made comparable in some sense,” they write. Using the same survey groups, the researchers asked people whether their evaluation systems took into account and adjusted for territory difficulty and representative differences. Some 72 percent of the sales managers said they take territory difficulty into account, and 68 percent take representative differences into account. Overall, sales managers said they believe taking territory difficulty into account is fair and makes the system more useful. The approach also improves the feedback they can give salespeople and improves the discussion of strategies. It also allows them to tailor information on what performance is expected and how it can be rewarded. Salespeople, on the other hand, had a slightly difference response. They, too, responded that adjusting for territory difficulty improves the feedback they get. But, they also believe that adjusting for representative differences improves feedback. Further, they responded that improving feedback on strategies fosters belief that the system was more fair and useful. The researchers say the bottom line is simple: Employers need to take into account territory and account representative differences and establish objective and consistent methods for doing so. They also need to keep in mind that, when salespeople are involved in the process of evaluation, they understand it better, learn more, feel better about the process and come out more motivated than if they don’t participate. –Beth Thomas