A report on the suggested performance appraisal system for sales managers from Noaris
The present report and performance appraisal system is created for Sales Managers who have been absorbed in our company as a consequence of our merger with Noaris, a German Pharmaceutical. Pharmaceutical Sales is a highly challenging field, and the Sales Leaders are an integral part of pharmaceutical sales (Schraeder, Becton & Portis 2007). Apart from the high level of competition the client needs to be provided transparent information and documentation of the pharmaceutical formulations as such information is critical for the life of a patient. Hence, the Sales Managers of any organization are the key drivers for the field force in ensuring product knowledge, customer identification, exploring new markets, and for the overall strategic planning and strategic management that helps the respective sales to meet their budgeted or targeted sales (MacKenzie, Podsakoff, & Fetter 1992)
Being absorbed from Noaris, in our company, the Sales Managers should not only comply with our company norms and policies but would be extremely focused to ensure the values of our company. The values that must be complied by the Sales Managers are performance, customer focus, integrity, and respect for people. There is a zero-tolerance limit if any of the core values is jeopardized. As per the guiding principles of our company, we should also ensure that these managers should not be discriminated against our in-house managers and top performers should be appraised and applauded with our performance recognition instruments (Chiang 2010). This report will suggest a performance appraisal system for the managers from Noaris, which will ensure the acquisition as a successful one, in terms of employee retention and minimizing attrition.
Background of Sales Manager’s Job Functions in Noaris
Sales managers in Noaris were responsible for customer acquisition, customer care, market research, and market analysis, identification of new trends, competitor’s knowledge, and activities in the workplace in terms of marketing strategies. Further, they are versant with sales presentations to a target group of physicians, health experts and advise healthcare professionals for marketing, promoting and creating awareness on various pharmaceutical formulations of the company. These managers also made sales presentations to review and plan sales targets with their peers and subordinates. They also had a liaising function for ensuring proper distribution of the formulations in the market place.
All the present job functions of Noaris indicate that their job profile is very similar to our company, and hence they can be successfully placed in the same rank and position of our in-house sales managers. However, I also feel that since the data on their relationship skills with subordinates are inadequate we need to have an effective criterion in the appraisal system (Mayer & Gavin 874-888). This is because one of our foremost core values is respect for both external and internal customers which has helped us to grow as a multinational amongst a diversity of nations, ethnicity, culture and religion.
Guiding Principles for the Performance Appraisal System
The performance appraisal system is a robust instrument that will subjectively and objectively judge a Sales Manager’s actions that translate in product sales for a specific time period (Soltani 2005). Further, the instrument will also specify sales projection based on the scientific rationale for successive three accounting years. This will help to measure the consistency of Sales Managers for driving quality sales (Den Hartog, Boselie, & Paaiwe 2004). Such projections are also needed to estimate and evaluate the growth projections of the Sales Managers are conservative or challenging.
As a policy of our company we are always in-line with market growth in a specific country or 2% ahead of the market growth, based on launch of new products or new promotions on newer indications in existing product portfolio. Hence, the Sales Mangers must have an optimistic but realistic plan in projecting such sales target for a specific accounting period and also for successive accounting periods. The instrument would, therefore, measure the potential of a Sales Manager to execute strategic planning and strategic management in practice (Wells & Meche 1999).
Since all across the globe our company believes in quality sales, the performance instrument will measure the role of Sales Managers in disseminating product knowledge and training on selling skills and soft skills to the field force. It is the duty of the sales managers to ensure that promotion of a product occurs in line with compliance and policy of the organization (Pettijohn 2001). Promotion in unapproved segments and false claims regarding sales will be treated as zero compliance.
The Sales Managers should effectively address physician’s meetings on Continuing Medical Education and must have the potential to attract a wide range of clients, through the rapport and relationship of their field force including the Sales manager. The Sales Manager should also be measured in terms of accountability exhibited by his or her external and internal clients (Fletcher 2001).
The accountability index for the external customers would be on the resolution of queries and needs. Such needs may be personal or clinical. The clinical needs are defined under the clause of efficacy of a formulation in a particular indication, safety aspects of the same formulation, the cost effective advantage of a particular formulation over competitive formulation and drug interactions of such promoted formulations. The personal need will pivot around grants for attending CMEs or enhancing medical knowledge. It is the responsibility of the Sales Manager to ensure that personal needs are not directed towards leisure travel for the family or cash dealings as bribery. All such situations will be treated as zero tolerance.
The accountability on internal customers would be to motivate them in their sales calls by providing the necessary skills and knowledge. Moreover, wherever possible, they should provide self-exemplification to the field force. The sales managers should work as a team and ensure team building potential in the day to day activities. They should understand and able to respond to the concerns of workforce and should be an ideal buffer in communicating the concerns of higher authorities, if such concerns does not fall in the domain of job functions of a Sales Manager (Schultz, 2010).
The Sales Managers will also be evaluated in terms of an exhibition of leadership skills. By virtue of the job posting it demands the trait of positive leadership in a Sales Manager (LePine, Erez, & Johnson 2002). Whether the leadership style is democratic, transactional or authoritative, the bottom line would be to create an inclusive environment for open discussion and debate (Denisse & Pritchard 2006). He should create goals that are realistic and achievable by the field force following the principles of company ethics and compliance statement. He or she should not dictate an objective that is not at all achievable by the field force and acts as a demotivating factor for them. Further, the Sales Managers should appraise an individual by his or her performance based on factual evidence and should not be driven by bias (Amsterdam et al. 2005).
Objective & Methodology of the Proposed PAS
The objective of the PAS is to inculcate a stringent management system for achieving sales budget and achieving quality sales while managing the field force on discipline and compliance regarding product promotion and ethical sales. Further, the PAS provides enough scope for innovation and strategic planning for inculcating a goal based approach based on the dynamics of competition and actual scenario in the marketplace (Molleman & Timmermann 2000).
The methodology adopted for evaluating the performance of sales managers is both result based and competency based. On a broader aspect achievement of results includes at least 95% performance on net sales against the budget. The priority of results is provided to the performance of newly launched products, where the performance should be at least 100%. The results are weighted in terms of both in-line and new product launches because it provides the foundation stone for achieving budget with new products in the future. The life cycle of any product is constant and hence until, and unless the new products are established quickly in the marketplace, achievement of the total budget in the future and overall performance will be impossible. Matched to the success of new product promotion is the knowledge and skills needed to establish it. Hence, competency development is of utmost priority. Competency-based evaluation are based on dissemination of product knowledge, an exhibition of exemplification and leadership qualities and strategic planning (Mayer & Gavin 2005).The detailed criterion of PAS is tabulated below.
Performance Appraisal System
Part A: Sales Data Retrieved from Electronic Recording System (Keeping &Levy 2000).
Percentage performance to total budget:…………………………………
( > 108% = 10 points, 102% -108%= 8 points, 100% -101%= 7 points, 91%- 99%= 4 points and < 90%=0)
Percentage performance to budget on new launches:………………………………….
( > 150% = 30 points, 120% -149%= 20 points, 110% -120%= 10 points, 100%- 109%= 8 points and 91%- 99%= 4 points and < 90%=0)
The above two figures describes the sales performance of the team of the respective sales managers and 70% weight will be given to Part A in the total appraisal system.
Final Score Out of 40=
Part B: Qualitative Data
The present part will deal will the proficiency of sales managers to execute quality sales and people development. The issues will be jointly arrived after justification by the appraiser and appraise.
All ratings in this section will be evaluated on a 5 point scale as referred below:
A= Exceeds Expectations= 5 points
B=Meets Expectations=4 points
C= Meets Minimal Requirements=3 points
D= Unable to meet requirements =2
E= Exhibited plan and will for improvements =1 point
Personality factors Initial rating
(A/B/C/D/E) Justification of Appraise Justification of Appraiser Final Rating
Versatility & Flexibility Interaction with superiors and higher ups. Interaction with subordinates Exhibition of motivation, people development capacity and self-exemplification Interaction with Dealers, Distributors, and External agencies Interaction with Physicians and Paramedical Staff Proficiency in Institute Working Role in Building of Company image and big picture to clients Integrity
( measured by transparency of communication) Accountability
(Measured by commitment to quality sales and achievement of the same at minimum 100%).
If total budgeted sales are not achieved at 95%, the rating will be 1 On Job Competency Territory Planning Formulation of innovative strategies Planning, budgeting sales promotional activities Identification of power requirements & proficiency in deploying existing manpower Setting up of realistic and achievable targets for self and team Coordinates activities through teamwork and team building proficiency (Twomey &Harris 2000) Exhibition of situational leadership Knowledge & Training Market Knowledge Market research Product knowledge & Dissemination Awareness of Competition and their sales activities Exploration of New Markets & Analysis Business Orientation Strategic Planning of sales promotional activities Presentations in CMEs & sales meetings Capability of sales forecasting Monitoring of stock transfers and availability of products in marketplace Quality awareness and ensuring compliance in despatches Promptness of expense submissions and seeking appropriate resources Optimization and usage of company resources both financial and non-financial (Mathis &Jackson 2010) All the final ratings will be weighted to a scale of 20, and the final score will be based on 20 points.
Final Score out of 20:
Final Score= Part A + Part B ( Rating > 55=Outstanding, 50 to 54=good, <50=poor)
Since I know both the companies well (the MNC & Noaris) and both are my existing clients, I have prepared this appraisal statement based on the vision, mission and operational policies of both companies. I have suggested the Performance Appraisal System by acting as an HR simulator for the parent company. Although I am an external consultant appointed for drawing this instrument, I have made my identification as a Human Resource Manager for the parent company. Such identification has helped me to frame the instrument and the guiding philosophies for creating such instrument without any issues of personal and professional bias. However, both the company reserves the right to alter the PAS, and it will not be made public through electronic media or documentation. I will be entitled to copyright infringement act if such instruments are reproduced without prior notice and permission from both my client companies.
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