A methodology for evaluating salespeople performance considering efficiency and effect: A case study of a liquor company in China

Abstract

The performance evaluation is one of the most important organizational management strategies used to guide the sales behavior of sales staff. However, it should be work process-oriented or sales result-oriented has become a dilemma for the management when evaluating employees' performance. Therefore, comprehensively evaluating the work process and sales results has become a challenge when it comes to salespeople performance appraisal. To solve this dilemma, this research builds a salesperson performance evaluation model which considering both of work efficiency and effectiveness, based on the decision tree model. Specifically, we use the Data Envelopment Analysis (DEA) model to quantify the work efficiency of salespeople and measure the work effectiveness by amount of sales. Moreover, this research proposes an advanced integrated DEA model by integrating the self-evaluation DEA models, peer-evaluation DEA models, and Gini impurity, which is identified to be more stable compared with the current DEA model. Finally, a case study of a Chinese liquor company is introduced to illustrate the applicability and feasibility of the salesperson performance evaluation model. The proposed model is applied to evaluate the performance of the salespeople, and a set of comprehensive and objective sales performance evaluation results are obtained. The estimated results can provide feasible sales management suggestions for the company in diagnosing work problems of salespeople.