Volume 15, Number 2
How Sales Managers Evaluate Talent to Optimize Sales Results:
A Classroom Case Study For Sales Students
By Charles H. Howlett and Sonia M. Newman
Evaluating sales talent is a priority in sales organizations and becomes increasing complex when sales results are
combined with a subjective assessment of leadership behaviors. An annual management process utilized in the
pharmaceutical industry can be taught to sales students in the classroom to reveal the challenging salary-increase
decisions managers make to build stronger teams. This paper provides a year-end performance management case
study where students debate rationale and logic of merit pay differentiation for top, middle and bottom performers. For
real-world application in the classroom, a pharmaceutical sales manager benchmarks her assessment with each team’s
rationale and concludes with four unique coaching role-plays for students to experience a manager and representative
feedback session.
Sales managers in every sales force continually
seek the best sales representatives for their team.
These individuals would have a resume that includes
consistently achieving sales results, proactively
identifying customer problems and solving them with
minimal manager intervention. They cost-effectively
invest company resources in their territory under their
annual expense budget, are sought out by customers
for their industry and product knowledge, and deliver
accurate, on-time administrative tasks. This salesperson
may seem to be rare, but through effective coaching,
candid and timely feedback, most representatives
will improve their skills and help deliver improved
performance (Spreitzer 2012; Richardson 1996).
In collegiate sales programs, professors are challenged
to teach sales management ideas and techniques to
undergraduates who likely may not be responsible for
sales representatives for nearly a decade. So how can
these conceptual lectures be relevant to the sales student
just entering their sales career? Why should the new sales
representative care about team dynamics, leadership
with peers, or team results when the company incentive
package clearly rewards their individual performance?
The key to unlocking their sales potential is likely
Charles H. Howlett (MBA, Northern Illinois University),
Assistant Director for Professional Sales, College of Business,
Northern Illinois University, Dekalb, IL, chowlett@niu.edu
Sonia M. Newman (MS, Indiana State University),
Pharmaceutical and Medical Device Sales Manager, Novartis
Pharmaceuticals, Chicago, IL, sonia.newman@novartis.com
through better comprehension of the “big picture” of
what managers evaluate and reward.
For insight into how sales managers strive for top
performance, an annual, systematic process called
performance management is being utilized in many
industries and is paramount with major pharmaceutical
companies. If students could learn and live this feedback
process and view performance through a manager’s
lens, they will gain valued insights through experiential
learning that could bolster their impact on their new
sales teams after graduation. See Table 1.
Take The Business World To The Classroom
Students were provided a case study with individual
sales performance for seven representatives. The
portfolio included three products of varying incentive
weightings (importance) based on each product’s
unique financial contribution to the company (e.g.,
product A was weighted at 50% while products B and
C each had a 25% weight indicating the importance of
selling product A). See Table 2.
The case study also included seven leadership behaviors
where representatives were ranked versus peers on each
behavior. For example, Melissa is ranked the best for
“product and industry knowledge” while Steve is the
best representative for “administration”. See Table 3.
With this information as the foundation, students were
then split into teams of four and asked to rank the seven
representatives for sales performance and behaviors.
17
major pharmaceutical companies. If students could learn and live this feedback process and
view performance through a manager’s lens, they will gain valued insights through experiential
Journal of Selling
learning that could bolster their impact on their new sales teams after graduation. See Table 1.
Table 1 – Performance Management
Why Companies use Performance Management?
Performance management is a key process that helps companies achieve sustained success of
their business in a rapidly changing environment in an increasingly competitive market. This
process is designed to help drive a culture of performance by setting high standards for all
employees with the goal of recognizing and rewarding their accomplishments (HR Council,
2014).
Managing performance is not an annual process of filling out a form, but an ongoing process
of setting objectives, assessing progress and providing coaching and feedback. It is a tool that
helps Take
employees
gain clarity
on the
The Business
World
Tofollowing:
The Classroom
•
Accountability
Students were provided a case study with individual sales performance for seven representatives.
• Expected deliverables
• Values
andincluded
behaviors
The
portfolio
three products of varying incentive weightings (importance) based on
• Specific measurements of individual performance
• Needs
for future
each
product’s
uniquedevelopment
financial contribution to the company (e.g., product A was weighted at
• Rewards aligned with accomplishments and performance
50% while products B and C each had a 25% weight indicating the importance of selling product
The overall goal of the Performance Management process is to improve and promote
A). See
Table 2. (Richardson 1996)
employee
effectiveness.
3
Table 2 – Sales Representative Annual Performance Rank
SALES RESULTS
Sales
Representative
Incentive product weights
50%
25%
25%
Product A
Product B
Product C
Melissa
Steve
KJ
Dwayne
Frankie
Charisse
Ami
DISTRICT (N=15)
19
1
79
26
10
84
99
10
3
34
33
55
33
25
50
4
Portfolio Rank
(N=100)
7
53
1
4
27
11
45
4
12
22
48
28
20
51
73
7
The case study also included seven leadership behaviors where representatives were ranked
Table 3 – Sales Representative Annual Behaviors Rank
versus peers on each behavior. For example, Melissa is ranked the best for “product and industry
BEHAVIORS (Rank)
Melissa
Steve
KJ
Dwayne
Frankie
Charisse
Ami
knowledge” while Steve is the best representative for “administration”. See Table 3. With this
Product/Industry
1
7
6
5
4
3
2
Knowledge
information as the foundation, students were then split into teams of four and asked to rank the
Administration
2
1
7
6
5
4
3
18
seven representatives
for sales
and
Customer
Knowledge
3 performance
2
1 behaviors.
7
6
5
4
Leadership on team
4
3
2
1
7
6
5
Strategic planning and
budgeting
5
4
3
2
1
7
6
Communication with
manager
6
5
4
3
2
1
7
Involvement with
internal brand team
7
6
5
4
3
2
1
For the year-end rank, students ranked each representative for overall effectiveness using a
4
Northern Illinois University
metric of 50% on sales performance and 50% on behaviors to arrive at the final ranking. Their
last assignment was to distribute the district’s monthly merit budget (salary) of $1000 among
Volume 15, Number 2
For the year-end rank, students ranked each
representative for overall effectiveness using a metric
of 50% on sales performance and 50% on behaviors to
arrive at the final ranking. Their last assignment was
to distribute the district’s monthly merit budget (salary)
of $1000 among these representatives and present their
recommendations to the other teams in class.
This assignment allowed students to individually rank
representatives and determine merit increases before
their student team agreed on the value of performance
and behaviors. When consensus was reached, each
team presented their recommendation to the class and
defended their decisions.
By forcing individual decisions and consensus at the
student team level, students lived the experience of
sales managers in the year-end merit process. Teams
had to agree to the value of each leadership behavior
and prioritize the impact on their sales teams. This
information combined with annual performance
allowed for fruitful debating on what individual
managers valued on their sales teams.
Performance Management: Student Results
The student teams evaluated the sales representative
performance and leadership behaviors and were fairly
consistent on year-end rankings although differed on
the amount of merit pay that should be awarded to each
of the representatives. Table 4 is an example of one
team’s rankings and rationale.
In this example, the student team agreed to value
product/industry knowledge, customer knowledge, and
leadership on team as the top three leadership behaviors.
By prioritizing the value of each behavior, the team
rewarded representatives with these behaviors with
more salary increase versus the other four behaviors.
Table 4 –Example of Student Team Ranking and Rationale
Behaviors Provide your team's managerial logic (why) on overall ranks and how your team
(Rank) divided the annual merit across the seven representatives.
Logic
Each sales representative was scored based on the multi-attribute model. They
were awarded points based off their rankings in both results and behavior.
1. Melissa
We feel Melissa is our strongest sales rep. She is nationally ranked in the top 20
and 1st in the company in sales results. On top of that, her behavior is capatible
to what we as sales managers feel is most important to the company. We decided
to award her the most money of $200 merit increase.
2. KJ
KJ is a strong sales rep. He did an outstanding job selling product C. His behavior
skills were in line with what we are looking for in ideal candidates and for this
reason we awarded him $180.
3. Dwayne
Dwayne is a solid sales rep. He nationally ranks top 30 when it comes to his
portfolio and did excellent job selling Product C. His behavior is an indication that
he is adding value to the company and for this reason we awarded him $160.00.
4. Steve
Steve is a solid sales rep. He did an outstanding job selling Product A, and overall
has a strong portfolio. His behavioral skills are on the lower end of what the
company would like and for these reasons he was awarded $140.00.
5. Frankie
6. Charisse
7. Ami
Frankie is another solid sales rep. Her portfolio ranks top 20 in the nation and she
ranks 2nd within the company according to sales results. Her behavioral
attributes can be a lot better; therefore we awarded her $130.
Charisse is one of our weaker sales reps. She did a fair job of selling Product C,
however, she did not perform well with Products A & B. Because of this, her
portfolio was nationally ranked in the lower 50 percentile and ranks second to
last in sales results within the team. Her behavioral attributes were in line with
what we are looking for, but her sales results hurt her. For these reasons we
awarded her $95.
Ami was another one of our weaker sales reps. She did not perform well at all
with the sales of product A, and Products B & C were not too great either. Her
behavioral attributes are not terrible, but could be better and for these reasons
we awarded her $95.
Table 5 shows all teams recommendation for each of the representative’s merit increases while
graph 1 visualizes the range of salary increases among the student teams.
19
Journal of Selling
Table 5 shows all teams recommendation for each of the representative’s merit increases while graph 1 visualizes the
range of salary increases among the student teams.
Table 5 – Student Teams Salary Increases
TEAMS
Melissa
Steve
KJ
Dwayne
Frankie
Charisse
Ami
1
$255
$174
$104
$125
$168
$113
$61
2
$250
$200
$100
$150
$125
$100
$75
3
$300
$125
$100
$125
$125
$100
$125
4
$200
$180
$160
$140
$130
$95
$95
5
$220
$190
$190
$125
$125
$75
$75
6
$225
$175
$125
$150
$200
$75
$50
7
$190
$175
$165
$125
$115
$105
$125
AVG
$234
$174
$135
$134
$141
$95
$87
Graph 1 – Student Teams Salary Increases
$350
$300
Melissa
$250
Steve
$200
KJ
Dwayne
$150
Frankie
Charisse
$100
Ami
$50
$0
1
2
3
4
5
6
7
AVG
The student teams’ rationale provided abundant data for class discussion that resulted in three
something” versus making a tougher decision of
The student teams’ rationale provided abundant data for
class discussion
that
resulted
in
three
primary
teaching
primary teaching applications to sales management. no salary increase.
applications to sales management.
representatives
(Steve,
1) Melissa’s salary increase ranged from $1903)Finally,
(team 7) to the
$300other
(teamfour
3) provided
a
1)Melissa’s salary increase ranged from $190
range $125-$200; KJ, range $100-$190;
meaningful
dialogue aamong
student teams to defend
theirrange
rationale
and discuss
the
(team 7) to $300
(team 3) provided
meaningful
Dwayne,
125-$150;
and Frankie,
range
dialogue among student teams to defend
$125-$200) all performed in the top 50% for
importance of rewarding top representatives on sales teams.
their rationale and discuss the importance of
sales performance in the company and were
rewarding 2)
top By
representatives
on
sales
teams.
grouped
with merit
similarincreases
increases(Charisse’s
for the year. The
contrast, both Ami and Charisse consistently
were given
application for real sales managers striving for
2) By contrast, both
Ami
and Charisse
consistently
range
$75-$113,
Ami’s
range $50-$125) for their
performance
though both
topsales
performance
is toeven
differentiate
the “middle
were given merit increases (Charisse’s range
performers” in terms of the long-term fit on
$75-$113, Ami’s range $50-$125) for their sales
their sales team. The performance management
performance even though both representatives’
process and subsequent merit increases (if
annual performance negatively impacts the team.
8 to
any) allows managers to lay the groundwork
In these discussions, students debated merit
enhance their teams.
increases and generally decided to “give them
20
Northern Illinois University
Volume 15, Number 2
Student Feedback On Experience
After the case study was completed, written feedback
was collected to capture key student insights and identify
changes that should be made to improve teaching
effectiveness. Here are three student comments on the
pharmaceutical manager’s perspectives and case study:
Four primary scenarios that can occur when
“Being able to see what a performance review
thatwhat
is derived
looks likedelivering
was very annual
helpful.feedback
Plus seeing
takes
place and what is expected of you during a bad
from the combination of sales results and
performance review is going to be very helpful
to me. Atleadership
some pointbehaviors.
in time I will
be 6given
a bad
Table
(Davis
1996).
review, it’s just going to happen, and knowing what
These
coaching
scenarios
offer students
is expected
of me
and what
will happen
will helpthe
me to be more prepared.”
experience to be both a sales representative
of performance (Richardson 1996). While the classroom
setting cannot provide real-life salary conversations,
role-plays were designed to offer scenarios that provide
insight into the difficulty and manager preparation
required for each conversation.
Table 6 – Coaching Scenarios
I. Good
Behavior/Good
Sales Results
II. Good
Behavior/Bad
Sales Results
III. Bad
Behavior/Good
Sales Results
IV. Bad
Behavior/Bad
Sales Results
“After each group ranked their top and lowest
and manager while reinforcing the performanceFour
management
process and
preparation
primary scenarios
thatthe
can
occur when delivering
sales rep, the industry expert gave her input on the
annual feedback that is derived from the combination
situationinvolved
with Melissa
as the top
representative
executing
a meaningful
and and
impactful dialogue. It should be noted that each scenario
of sales results and leadership behaviors. Table 6 (Davis
Ami and Cherise as the lowest reps. The difference
1996).as These
coaching
scenarios
representative’s
reactions (emotions)
manager
feedback
becomesoffer
more students the
however would
in her increase
allocating
of funds and reasoning
experience
to
be
both
a
sales
representative
and manager
for the salary raises (rationale) was interesting.
negative to reflect the actual situation.
while reinforcing the performance management process
She felt that Ami and maybe even Cherise did not
and the preparation involved executing a meaningful
deserve any
merit increases
for their performance.
Scenario
1. Good Behaviors/Good
Sales Results
and impactful dialogue. It should be noted that each
She recommended giving Melissa $500 dollars and
scenario
would
increase
thought
the most
and easiest
feedback
to deliver.
Therepresentative’s
employee has reactions
breakingGenerally
the rest between
theasothers
reps.pleasant
From her
(emotions) as manager feedback becomes more
explanation I quickly learned performance is the
demonstrated
good
behaviors
throughout
the
year
and their
effortsthe
have
yielded
good sales
negative
to reflect
actual
situation.
key for a sales rep to get a salary increase.”
manager needs
makesales
sure this employee
appreciated
and recognized
with
Scenariofeels
1. Good
Behaviors/Good
Sales Results
“I felt Iresults.
got anThe
understanding
oftowhat
managers really expect from you and they are
the monetary reward matching the effort the employee
displayed
themost
sales pleasant
year.
Generally
thoughtduring
as the
and easiest
helping reps exceed their goals. Managers are
feedback to deliver. The employee has demonstrated
responsible
for the success
of their
teamBehavior/Good
through
Appropriately
rewarding
Good
Sales
is critical
to any
in efforts
good Results
behaviors
throughout
theorganization
year and their
both salary decisions and delivery of appropriate
have yielded good sales results. The manager needs
order to retain top talent.
feedback.”
to make sure this employee feels appreciated and
ScenarioThe
2. Good
Behaviors/Bad
Sales Resultsrecognized with the monetary reward matching the
Classroom Becomes
Business
World
effort the employee displayed during the sales year.
in this scenario
can be challenging
for therewarding
manager especially
if the
The final stepDelivering
managersfeedback
must complete
in the annual
Appropriately
Good Behavior/Good
Sales
performance management process is to deliver their
Results is critical to any organization in order to retain
had good
results ininto
the past. This employee has displayed good behaviors by
evaluation ofrepresentative
the employee’shas
results
and translate
top talent.
the impact oninvesting
salary. Did
the time
employee
earn in
a salary
quality
and effort
their territory but has not been able to deliver results. The
Scenario 2. Good Behaviors/Bad Sales Results
raise or not?
manager must balance encouragement and praise for their efforts with reality of the poor sales
Delivering feedback in this scenario can be challenging
Delivering this year-end feedback is a delicate process
for of
thethe
manager
especially control
if the representative
has had
and managers
needfortothis
beyear.
prepared
to situations
respond to
results
Special
that are out
representative’s
should also be
good results in the past. This employee has displayed
each employee and, at the same time, insure that the
good behaviors by investing quality time and effort in
employee gets the “right” message based on their year
11
21
Journal of Selling
their territory but has not been able to deliver results.
The manager must balance encouragement and praise
for their efforts with reality of the poor sales results
for this year. Special situations that are out of the
representative’s control should also be considered
that may have negatively impacted performance (i.e.
pharmaceutical industry with a loss of formulary access
in a major managed care payer). In the end, however,
sales is about generating results and, as a general rule,
results follow behaviors that the employee displayed
during the year. Rewarding Good Behavior/Bad Sales
Results also requires critical thinking on what message
the manager seeks for the representative’s career path.
Is this a person that will enhance the sales team?
Scenario 3. Bad Behaviors/Good Sales Results
This situation requires clear and objective management
documentation based on specific examples that
demonstrate the employee’s lack of business knowledge,
product knowledge, and customer knowledge (or
other priority behaviors). In the ideal manager
and representative relationship, the performance
management process should be an ongoing dialogue
between the two employees to set objectives, assess
progress and engage in dialogue. This process allows
the manager to manage expectations so that, at the yearend review, the right message will be delivered and
there will be no “surprises” for either party.
If the performance management process has not been
followed in this scenario, the employee may feel that he/
she is in a strong position and expects a good evaluation
and merit increase, the actual coaching message may
differ significantly from their expectations. Like
scenario 2, the manager must determine the coaching
message for this representative during their preparation.
If sales are about results (and they were delivered),
specific examples of the “bad behaviors” must have had
significant consequences for the individual or team for
a major impact on the merit increase (Gilley 1996).
Scenario 4. Bad Behaviors/Bad Sales Results
Employees who fall into this scenario are likely
individuals who should not be on the team and are
cancerous to team dynamics. They likely “have earned”
an individual development plan or Performance
22
Improvement Plan sometime during the year and will
receive a bad sales review without a merit increase
(Robinson 1996). Additionally, these representatives
will likely deny accountability or responsibility for the
situation and frequently play victim and blame their
poor results on factors beyond their control (i.e. “my
quotas are too high”). In preparation for the review,
the manager should expect that this coaching session
would become a crucial conversation of whether the job
is the right fit for the employee. This scenario addresses
challenging, frustrating and even frightening issues for
both the manager and the employee. It is extremely
important that the manager sets clear actions and
outcomes over a specific period of time. The goal of this
conversation is to help the employee see what success
looks like to improve future performance.
Conclusion
Sales students struggle to grasp concepts of sales
management and have difficulty understanding how
being the best sales representative may not always
lead to becoming the best sales manager. A systematic
process called Performance Management allows
students a snapshot into a manager’s role of continual
representative evaluation, developing coaching plan to
improve specific selling skills or leadership behaviors,
and then preparing and delivering objective feedback
through a dialogue to the representative.
This case-study application of performance management
provides experiential learning by allowing students to
evaluate a team of representatives’ sales and leadership
behaviors, develop rationale for the annual salary
(merit) increase to share with other student teams and
prepare for a live feedback session with a representative.
Four primary student (sales manager) dilemmas are
uncovered in the classroom discussion around the
merit process. First, what is the differentiation in salary
increases for the top and bottom performers? Next,
should you provide any merit increases to the bottom
performers? Third, for the middle representatives on a
sales team, what level of compensation increase will
enhance team performance next year? Finally, roleplaying various coaching scenarios brings reality to
the impact sales managers have on the development of
sales representatives.
Northern Illinois University
Volume 15, Number 2
The primary challenge facing sales programs to replicate
this student experience is having industry partners
assessable to complement the academic instruction of
the performance management principles. Further, to
maximize role-play learning, knowledgeable industry
experts are needed in multiple sessions to maintain
consistency among student experiences.
REFERENCES
Davis, Brian L., Carol J. Skube, Lowell W. Hellervik,
Susan H. Gebelein, James L. Sheard (1996), Successful
Manager’s Handbook 381-383, 398-401.
Gilley, Jerry W, Nathaniel W. Boughton, (1996), Stop
Managing, Start Coaching, 31-40, 143-168.
HR Council http://hrcouncil.ca/hr-toolkit/keepingpeople-performance-management.cfm
Richardson, Linda (1996), Sales Coaching 11-13, 111124.
Robinson, Dana G., James C. Robinson (1996),
Performance Consulting 150-158, 281-285.
Spreitzer, Gretchen, Christine Porath, (2012), “Creating
Sustainable Performance,” Harvard Business Review.
90 (1/2), 92-99.
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