SALES MANAGEMENT

Q-Explain the process of recruitment and selection of sales personnel, including the
source of recruits and prerecruiting criteria as if you work the sales manager of
an Organisation selling personal computers.

Recruitment means finding potential job applicants telling them about the company and
getting them t o apply. It is the process of finding good people and ultimately selecting them
for the organisation. The entire sales organisation ultimately depends on a successful
recruiting approach. It is the discovering of potential applicants for actual on anticipated
organizational vacancies. It is the linking activity of those with job and those seeking job.
The recruitment process consists of various steps which are as follows:-

Conduct Job

Analysis

Prepare Job
Description

Identify Sales

Job
Qualification

Attract Pool
Of Sales
Recruits

Select Best
Recruits

1. Job Analysis : It is conducted to identify the duties, requirements, responsibilities

and conditions involved in the job. It is most essential to give a complete idea of
the job profile to the applicants so that they don’t have any problem in accepting
that profile in future. It involves these steps :

 Analysis of the environment in which the sales person is going to work

 Determining the duties and responsibilities expected from the sales person.
 Observing and recording the various tasks of job actually performed.

2. Job Description : Job description is the result of a formal job analysis. It is the
most important tool in managing the sales force. It helps in following ways:
  Preparing description of sales person duties.
 Developing training programs to help them perform better.
 Developing compensation plans.
 In supervision and motivation.
 Help the management to decide whether each salesman has a reasonable
work load.

3. Identify sales job qualification : Job description should be converted to the job
qualification a recruit should have in order to perform the sales job satisfactorily.
Qualification a sales person needs to perform satisfactorily are following :

 Personality traits such as self-confidence, aggressiveness, job commitment,

persistence, etc.
 Level of qualification such as ability to make decisions under stress,
specific product knowledge, little work experience, etc.

4. Attract pool of sales recruits : Companies with a large sales force need to
identify, locate and attract potentially effective candidates. The recruitment process
always furnishes the organisation with a pool of organisation from where to
choose. The most frequent used sources are:

 Persons within the company: Some of the organisations often recruit sales
people from the non-selling section of the sales department or from other
departments.
 Competitions: Sales people recruited from the competitors firm are already
trained in selling the similar product and don’t need much of training.
 Non-competing companies: Non competing firms can provide a well-trained
sales force. The only thing required is to train them in the product range.

 Educational institutions: High schools, evening classes, business colleges

and universities are all excellent sources of sales recruits.
 Advertising and Employment agencies, etc.

5. Select the best recruits : The importance to assess a candidate’s selling skills
and technical background, hiring decision is also based on temperament, suitably
to our culture, creativity, ability to visualize, ambition, etc. The selection process
involves choosing the candidates who best meets the qualification and have
greatest aptitude for the job. There are no. of tools that can be used for the
selection process like application forms, In-depth interviews, reference checks,
etc.

Procedures followed in selection of a sales person are as follows :

1. Initial Screening Interviews : It should be brief just to eliminate undesirable

recruits.
 2. Application Forms : It is the most widely used selection tool. It is an easy means of
collecting information necessary for determining an applicant’s qualification. It
gives an initial impression of the applicant.

3. In-depth interviews: It is used to help determine if a person is right for the job or
not. It can bring out the personal characteristics and also serves as a two way
channel of communication, which means both the company and applicant can ask
questions and learn about each other.

4. Reference Checks: A company cannot be sure it has all the information on an

applicant until references have been thoroughly checked. It allows a company to
secure information not available from other sources.

5. Physical examination: It require a degree of physical activity and stamina. Poor

physical condition can hinder a sales person’s job performance, therefore, a
company should insist on thorough medical examination.

6. Tests: these are the most controversial tool used in the selection process. Test
profile data can be useful to management in process of selecting and classifying
sales applicants who are likely to be high performers. Different types of tests can
be used in selection process like intelligence test, knowledge test, etc.

Short Notes:

REQUIREMENT OF A GOOD SALES COMPENSATION PLAN:

Sales Compensation Plan is an essential part of the total sales program to motivate
roles personnel. A properly designed sales compensation plan fulfills a company’s
special needs and problems and from it flows attractive returns for both the company
as well as the sales personnel. A good sales compensation plan meets the following
requirement:

 It provides a living wage in form of a secure income so that the individual

concentrate more on the job rather than on the financial gains.

 It does not conflict with the other motivational factors.

 It does not penalize personnel on factors, which are beyond their control. The plan
must be same for all the personnel for the similar performance.

 It must be easily understood by the sales personnel so that they are always aware
of their earnings.

 The plan must adjust change in pay on the basis of the performance of sales
personnel.

 The plan is economical to administer. It should not incur much cost.

 It helps in attaining the objectives of sales organisation.

SALES QUOTAS

A Sales Quota is a quantitative goal assigned to the sales personnel to figure out his
achievements at any moment. They are basically used to plan, control and evaluate
various sales activities. They provide specific goals to the sales person and also a
way to manipulate their financial gains or incentives. It also helps in having a better
control on the market. The most commonly used quota is the sales volume quota
measured either in terms of Rs or in terms of physical units. There are different
procedures for setting sales volume quotas.

 First one is the basic method in which the sales quotas are decided on the basis of
previous year’s sales figures and then adjusting those figures according to the
different market conditions and the present market scenario.

 Another method is based on the territorial sales potentials. As we are well aware
that sales potential is the attainable amount under ideal conditions but they are
difficult to achieve. Hence, some adjustments are made in those figures first by the
territory or the branch manager, on the basis of sales person’s skills and physical
conditions, and then by the country manager, on the basis of future price
fluctuations and new product offerings.

 One more important method to set the sales quotas is on the basis of estimates of
total market. In this case the individual quotas are set on the basis of employees
sales potential.

In some of the companies sales person are allowed to set their own sales quotas as
they are best aware of their territory’s potential. The quota must be fairly and
objectively determined. And also it must be easily understood and administered.

METHODS OF MOTIVATING THE SALES PERSONNEL:

Motivation plays an important role in the performance of the sales person. A motivated
sales person always gives better results as he put his deep-hearted efforts to achieve
the targets. Motivation doesn’t always means incentives or money but sometimes
appreciation letters and other such kind of non-financial rewards also act as major
motivators. There are two major ways to motivate the sales personnel:

1. Non-Financial incentives
2. Financial incentives

 Non-financial incentives: These are the techniques for specific and special
effort situation like recognition by honours and awards. This can be done by

1. Sales Contests: In this case certain prizes are awarded for achieving
specific sales targets.

2. Sales meetings: in this case a monthly or quarterly gathering is

organised for the sales force of a particular office or a particular region.
 It gives the confidence to the sales person that they are working as a
team.

3. Sales Conventions: Annual or semi-annual gathering of the total sales

force of all the branches also acts a great motivator among the sales
personnel.

 Financial Incentives: These are the techniques in which the financial gains
motivate the person. Financial gains are always desirable at each and every
level. They can be:

1. Direct monitory payments like salaries and wages

2. Indirect rewards with financial benefits like paid vacations, insurance

plans, etc.
Q-What are the different basis on which Sales Department can be organised?
Illustrate with examples.

Ans:
Organisation of the sales department plays an important role in bringing about its
success. The purpose of organizing the sales department is to is to serve the
customer satisfactorily and profitably. It is to facilitate the achievement of sales
objectives and goals by responding to market needs or establishing the channels of
communication or by any other method.

Sales department can be organised under following basis:

 Mechanistic organizational structure

 Organic organizational structure

Mechanistic organizational structure: This is the rigid organizational structure. In

this type of organisation no modifications can take place in any case. The systems
has to run according to the predefined principles even during ups-downs in the
market. Under this category falls two types of organisation:

a) Bureaucratic: This model of organisation was designed to increase the

rationality of decision making by removing individual discretion. It is
characterized by

 specialization of labour
 well defined hierarchy of authority
 clearly defined responsibilities
 system of rules and procedures
 promotions based on qualification and ability
 centralization of authority
 written records
 b) Administrative Management: In this type of organisation, the manager has to
essentially direct the use of scarce resources to achieve organizational
objectives. This type of organisation is characterized by

 Coordination of all the functional areas of organisation

 Unity of command
 Unity of direction
 Span of control
 Specialization of labour
 Scalar chain of demand

Organic organizational structure: This is the flexible organizational structure. In this

type of organisation, certain modifications and changes can be made according to the
prevailing market conditions. The two types of organic organisation are as follows:

a) Decentralization: It does not necessarily mean geographic separation of

organisation unit. Organizations can retain centralized decision making authority
and still have scattered geographic units. Different organisations may exhibit
different degrees of decentralization. Decentralization can be depending on the
following factors:

 Sales force size

 Relative role of personal selling
 Geographic dispersion of market
 Type of distribution channel
 Customer service requirement.

b) Matrix Organisation: This is one of the most recent structures. It focuses on

specific products or projects. The functional areas are still present but they are
secondary to the project structure. The project managers head a team of
individuals from different functional areas and have responsibility for coordinating
these functions towards project completion. It encourages the team work concept.

Conclusion: These are the different basis on which the sales department can be
organised. On these basis the sales department can be organised in many ways. But
mostly they are organised into three types i.e. line organisation, line and staff
organisation and the functional organisation.

Q-Explain various steps in selection of a sales person. Point out the importance of
each step.

Ans.
Sales Personnel is the link between the company and the customer. And thus it is the
area of special concern for any industry. Selection of sales persons plays an important
role in any organisation as they are the people who will represent the company in
front of the customer. It gives an image of the company and its stand in the market.

Various steps involved in selection of any sales person are as follows:

 Preliminary
Interview

Formal
Application

Interview (S)

References and Credit

Checks

Psychological Testing

Physical Examination

 Preliminary Interviews and Screening: It is for the purpose of eliminating the

unqualified applicants. It may be on the basis of applicants basic qualification,
education, etc. In these interviews company may just ask to fill a small interview
application form. It is basically the rejection round and not the selection round. It
means the candidates not fulfilling the basic criteria for selection are out in the
start. This is important because selection process also incurs some cost and this
round can be easily handled by a low paid clerk and hence lowest cost selection
step. Also it is difficult to process the papers of all the applicants for the whole
selection procedure unnecessarily.

 Formal Application: It serves as a central record for all information collected

during the selection process. It may be filled by the applicant personally or by the
interviewer during the interview from his responses. Ideally the application form
must be different for different industries as no two companies can have the same
information requirement. But in case of a small sales force the company can go for
the standard form of some other company also. These companies obtain the
additional information if required during the interview. This is important as it gives
the complete data about the applicant to the interviewer even before he interviews
the candidate. It helps the interviewer to prepare his questionnaire for the
interview.

 Interview(s): This is the most widely used selection step and in some companies,
it comprises the entire selection system. It is an effective way to obtain the
information about the applicant. But through out the interview, a pleasant rapport
must be maintained between the interviewer and the candidate so as to make the
 interview successful. There are many other questions, which arises from this, like
who should take the interview or techniques to be followed during the interview
and many more. This step is an important tool in selection of the sales person as
in this case the interviewer and the candidate are face to face and hence the
details, which remained hidden in the application form, can be explored and a
better decision can be taken.

 References: These provide information on the applicant not available from other
sources. Personal contact is the better way to obtain information than facial
expressions or voice intonations. There is a tendency for references to be biased
in favor of the applicant. These are partially offset by contacting persons not listed
as references, but who know the applicant. This is an important tool as it helps to
reveal the background of the applicant. The information kept hidden by the
applicant during interviews also comes into picture.

 Testing: Psychological tests are one of the last steps in the selection process
because of its high cost. The task of validating tests is complicated because
different sets of attributes can lead to successful job performance. Because of this,
separate validity tests should be performed for different ethics groups. Apart from
this test consistency is also important. Other criteria for educating tests are cost,
time and ease of administration. This test is also important in case to check the
stability of the candidate. It also helps to check the habitual characteristics and
ability of the applicant.

 Physical examination: Good health is important in success of any sales person

but this step is costly, hence it is avoided by the most of the companies. Because
of its high cost, this is the last step if followed. It is also an important step as the
person who is physically fit is able to perform better. And sales person needs to
travel a lot so he must be physically fit to avoid any kind of problem in traveling.