7.1 SALESPERSON HIRING AS COMPARED WITH TOTAL QUALITY MANAGEMENT INDICES
The success rate of hiring and retaining new salespeople is rather dismal with average turnover estimates ranging between 20 – 40%.
One way to get students to understand the impact of high salesperson turnover is to use a TQM (Total Quality Management) perspective. Recall that TQM is a benchmarking tool used by organizations to guide their efforts in eliminating waste and improving productivity. In a similar way, TQM can be useful for highlighting the problems associated with not accurately measuring and hiring people that have the basic skills, competencies, and work habits needed to be successful.
TRANSPARENCY: “Total Quality Management Comparisons” shows that compared to other quality measurements, the average recruiting process falls short of even the lowest benchmarked indices. It also clearly shows that companies need to be committed to identifying errors and the sources of errors in the recruiting process. Here you might want to emphasize the potential for substantial productivity gains in the management of a company’s most valued resource – Human Capital.
7.2 SURVEY – SALES FORCE TURNOVER
Selection and recruiting are usually a major part of a sales manager’s job because of growth in the sales force and turnover. Turnover of salespeople has stayed fairly constant over the years at about 15%.
TRANSPARENCY “Turnover Rates in Selected Industries” illustrates average turnover rates in selected industries. These were chosen to show how large the variation among different industries can be. It also suggests that, for some industries (e.g., office equipment and retail), the out-of-pocket costs (i.e., waste and inefficiencies) associated with turnover after one year can be quite substantial. The hidden, and usually larger, cost is that of lost sales due to a poor hiring decision. The combination of these two slides is useful in emphasizing that many companies can improve hiring errors by proper hiring practices which are discussed in this chapter.
If salesperson turnover is high, here are four tips that will help keep the pipeline full of recruits:
1. To have an effective recruiting program, it’s imperative that your sales team be enthusiastically involved in the recruiting process. Let them know that their ability to recruit is considered a vital skill in leadership development and that their assistance is essential to the health of the organization.
2. Keep your sales team informed by focusing on recruiting as an agenda item at the weekly meeting. On the agenda show the status of each recruit, highlighting the salesperson that has recruited them.
3. Design and implement an incentive program for your sales force that places an emphasis on recruiting.
4. Consider inviting potential new hires out for lunch and cultivate relationships with clients that may be successful on your sales team. Make certain to include them in your company’s social events when appropriate.
Source: John Boe, “Recruit Your Way to the Top,” (January 27,2007) accessed from www.salesandmarketing.com on Oct. 2, 2008.
7.3 COMPANY CULTURE AND EMPLOYEE FIT
Aligning an organization’s culture with its recruiting strategies should help attract and retain higher performing salespeople. With no clear focus for their staffing and retention, non-aligned companies suffer greater disconnections throughout their organizations and greater turnover rates. Staffing and retention becomes a burden rather than a competitive advantage. According to Harris and Brannick in “Finding and Keeping Great Employees,” there are three steps needed to align a hiring process with a firm’s core culture (this information is outside of the material presented in the text):
- An organization must clearly understand how each core culture uniquely contributes to salesperson connectedness. Four generic types of core cultures discussed by Harris and Brannick are: customer service, innovation, operational excellence and/or spirit.
- The authors argue that successful organizations tend to embrace one core culture as its operational driver. While all of the above-mentioned cultures could exist simultaneously, knowing which core culture is your company’s competitive advantage is the considered important to hiring successes.
- Sales managers must then align all staffing and retention strategies to the core culture. The hiring process, then, becomes a more strategic, rather than reactive, function.
Examples of generic core cultures include: a culture of customer service (e.g., Home Depot), a culture of innovation (e.g., Apple, Microsoft or 3M), a culture of operational excellence (GE, McDonalds, Lockheed Martin), a culture of spirit (Ben & Jerry’s). One way to engage the students using the “Recruiting and Selection Planning” TRANSPARENCY would be to ask for their opinions of the core cultures of the logos shown on the overhead. To avoid blank stares from the students, you might show the next slide that has the four cultures (i.e., customer service, innovation, operational excellence and/or spirit) and the four companies. This quick in-class exercise could easily be extended to other companies that you may be more familiar with.
7.4 ALIGNING PEOPLE TO CORE JOB RESPONSIBILITIES
TRANSPARENCY “Aligning People to Core Job Responsibilities” provides an opportunity for students to think about how the skill sets may differ for different sales positions. The Chally Group, a sales consulting company, found that matching a person’s skills set with the skills required by the sales job led to higher performing salespeople and greater job satisfaction. Their research investigated three generic sales positions: the missionary, sales support, and new business.
You might want to ask the students for their ideas as to what type of traits they would want to see in a person that applies for a missionary, sales support and new business sales job. The next slide provides the results of the Chally Group’s research showing the success traits of high performers in each job type.
Missionary: Technical skills, relationship building skills
Sales Support: Empathy, relationship building skills
New Business: Assertiveness, persuasiveness, time management, ability to close
7.5 SURVEY – BUYER’S PERSPECTIVE ON PREFERED SALESPERSON TRAITS
TRANSPARENCY “What Purchasing Agents Like About Salespeople.” The survey results are from “The Best Sales Reps Will Take on Their Bosses for You,” Purchasing, (November 7, 1996, pg. 81).
This slide makes the point that purchasing agents need their salesperson to understand their business inside and out; otherwise the salesperson is likely to be unable to add value in the interaction and is easily replaceable by a lower cost supplier (e.g., Internet).
7.6 SURVEY – TELL ME ABOUT YOUR EDUCATIONAL BACKGROUND
According to an opinion survey of 500 business executives, 10% of new employees in the 40-and-under age group had misrepresented their educational background. The results of an earlier survey by the American Council on Education showed that while 90% of the 643 companies surveyed said they placed either moderate or major emphasis on education background when hiring, only 25% ask for verification of diplomas and only 40% request a transcript or grades, which means that 35% of businesses ask for no proof of educational background whatsoever.
Transparency: “MGM Mirage CEO to Resign Amid Questions About MBA” provides an example of a recent WSJ top executive who falsified his education….and got caught.
In fact, a fair number of job applicants misrepresent their credentials, surveys suggest. Kroll Inc., the investigative arm of Marsh & McLennan Cos., estimates that about 20% of job seekers and employees undergoing background checks exaggerate their educational backgrounds. In a 2004 survey of human-resource professionals, 61% said they “often” or “sometimes” find résumé inaccuracies when vetting prospective hires, according to the Society for Human Resource Management.
7.7 CASE STUDY – FINDING A TEAM PLAYER
A critical characteristic for some companies is to hire salespeople who can work in a team. Unfortunately that doesn’t always happen. Some salespeople continue to be adversarial instead of cooperative when it comes to sharing ideas in a team environment. How can you tailor your interviewing process to make sure that you’re hiring people who will fit into a team environment?
At Rubbermaid Home Products, in Wooster, Ohio, the sales force works closely with many other divisions of the company, such as customer service, logistics, and marketing. Salespeople are hired after an exhaustive process that allows sales managers to ensure they will be team players not only with peers in sales, but across the company. “Salespeople provide feedback to our research and development group about trends they are seeing, and they work with the finance group on numbers and prices,” says Martha Bollinger, division staffing manager at Rubbermaid, “They have to be cooperative.”
Rubbermaid uses behavioral interviewing, a process that reveals candidates’ past and present sales skills and predicts how a potential new hire will perform in the future. Instead of asking a candidate to speculate how they’d handle a hypothetical situation, interviewers ask specific questions about how they’ve handled real situations in the past. The answers provide insight as to how new salespeople deal with other people.
Even if candidates don’t have professional experience in a team environment, past work on committees or on sports teams can be an indicator of their abilities. During the interview, Rubbermaid looks for self-motivation, risk-taking, national thinking, and problem-solving abilities. Executives must evaluate how candidates respond to interview questions to determine if they possess the team-player mentality.
Mark McMaster, “Ask SMM,” Sales & Marketing Management (December), 152 (12), p. 58.
7.8 BEHAVIORAL EVENT INTERVIEW
Behavioral Event Interview (BEI) approach is based on the research of David C. McClelland, formerly of Harvard. He argues that we are all driven by deeply embedded and highly distinctive motives. These motives fall into three categories: the need for power, achievement and affiliation. The best salespeople, he argues have a high need for achievement, not power. Their goal is to accomplish great things for themselves. On the other hand, effective executives, particularly in large companies, are driven to acquire and use power.
Despite the stereotype of salespeople forming close attachments with clients, affiliation is not the underlying motive; its achievement. Tangible awards are nice, of course, but are almost incidental to the feeling of accomplishment.
How is this theory about motivation utilized in BEI? After bantering for a few minutes the interviewer asks a question like, “Tell me about something that happened in the last months that made you feel effective in your job?” Then the interviewer presses for details. “Why don’t you take me back to when you first started working on this project? Tell me what was in your mind back then.” Notice two things, the emphasis is on behavior rather than traits and on process rather than outcome. If an applicant focuses on buzzwords such as flexible, mature, or articulate, the interviewer’s response may be “You may be all those things, but tell us about situations where you’ve shown it.” The key questions are “Why did you do that?” and “What were you thinking?”
BEI is not an easy technique because it requires careful listening and all people display some degree of all three characteristics. The trick is to determine which one dominates.
7.9 QUESTIONS ABOUT INTERVIEWERS
TRANSPARENCY “Questions About Interviewers.” This transparency lists 8 questions that research conducted by R.E. Carlson has addressed on interviewers. Following are the answers to the questions:
- No. It was concluded that interviewers benefit very little from day‑to‑day interviewing experience and apparently the conditions necessary for learning are not present in the day‑to‑day interviewer’s job situation. (Selection Interview Decisions: The Effect of Interviewer Experience, Relative Quota Situation, and Applicant Sample on Interviewer Decisions,” Personnel Psychology, 20, (1967), 259‑280.)
- Yes. Experienced interviewers used more information and were less subjective. (Same study as #1 above.)
- Yes. After 4 below average interviewees, an average applicant was rated very favorably by interviewers. (Effects of Applicant Sample on Ratings of Valid Information in an Employment Setting,” Journal of Applied Psychology, 54 (1970), 217‑222.)
- No. Personal history was rated more important by a 4 to 1 margin. It was found that appearance had its greatest effect on the interviewer’s final rating when it complemented the personal history information. (“The Relative Influence of Appearance and Factual Written Information on an Interviewer’s Final Rating,” Journal of Applied Psychology, 51, (1967), 461‑468.)
- Research shows that without notes, interviewers could correctly recall only 50% of the factual information in an interview after a 20 minute interview. (The Effect of Interviewer Information in Altering Valid Impression,” Journal of Applied Psychology, 55, (1971), 235‑241.)
- Interviewers without notes tended to rate everyone more favorably and there was less variance between the ratings of all the applicants, than were the ratings of people with notes who could recall factual information. (Same study as in #5 above.)
- Very reliably. There was found to be 70% agreement among 42 interviewers regarding job qualifications of applicants. (E.C. Mayfield and R.E. Carson, “Selection Interview Decisions: First Results from a Long‑Term Research Project,” Personnel Psychology, 19 (1966), 41‑53).
Not much. There was only 33% agreement among 42 interviewers regarding future performance.
7.10 SURVEY – COMMON INTERVIEWING MISTAKES
Arnold L. Schwartz in his article on “Recruiting and Selection of Salespeople” lists seven common mistakes made by interviewers in the interview process. TRANSPARENCY “Common Interviewer Mistakes” lists these mistakes. These points are for the most part self‑explanatory and following are a few comments about each.
- Failure to establish rapport: the applicant will be more at ease and comfortable in the interview and as a result more honest.
- Lack of a plan: without a plan, the interview often becomes awkward and rambling. You should conduct all the interviews in the same way so that the only variance is the behavior and answers of the candidates.
- Insufficient time: don’t schedule interviews when you are hungry or tired.
- Not listening: most interviewers spend too much time talking. Spend 70% of the time listening.
- Personal bias: these include schools, sex, weight, accents, and ethnic types.
- Questions: Avoid closed or leading questions.
- First impressions: initial impressions are strong, but not always valid. Candidates may be ill at ease in the beginning. Keep an open mind and be open to changing your initial impressions.
7.11 SAMPLE INTERVIEW QUESTIONS
TRANSPARENCY “Typical Interview Questions” lists 9 questions that students can expect to be asked some time in a sales interview situation. You can lead into these questions by asking the following questions: What is the interviewer trying to determine about you by these questions? What would your response be to this question? The following are some insights into each question:
- What are your values and general orientation to life? Also, how creative were you in eliminating the boredom.
- The answer reflects what the person is and what they want to become.
- Anyone who is active and involved has experienced many failures; therefore this question is really designed to determine if you have ever done anything.
- Job probably involves travel. May also indicate your motivation in wanting the position.
- Tells how people react to supervision and organizational cultures.
- Are you realistic and mature in your professional perspectives and can you achieve your objectives in a career with this company.
- Were the leadership positions you listed on your résumé truly demanding positions or largely ceremonial in nature. Your leadership style and philosophy.
- How badly do you want the job? What do you think of yourself? Do you believe in yourself?
- You may have listed previous selling positions, but do you know how to make a sales presentation? The main points looked for in the presentation is whether you mention product benefits as opposed to features (i.e., customer orientation) and whether you ask for the order at the end of the presentation.
7.12 SAMPLE INTERVIEWEE QUESTIONS
TRANSPARENCY “Asking the Right Questions” – This transparency asks students what questions they should ask in an interview to ensure that they do not take the wrong sales job. Students don’t often think about this ahead of time, but good questions are often more impressive than good answers. After pushing students for their questions you may offer some or all of the following questions. These questions are suggested by John R. Graham, President of Graham Communications, Quincy, Mass, from “If You Don’t Get the Right Answer, Don’t Take the Job,” Marketing News, (March 19, 1990), p. 8.:
- May I look at your résumé? Like the interviewer, you are looking for a history of job hopping.
- Where will I get my leads? There should be a clear answer to this question or you know they do not have a good system and lead generation will be entirely up to you.
- May I review your sales literature? See if the literature is customer centered or focused on the wonders of the company and its products. You are looking for customer orientation.
- When are your slow times? Get to know whether down periods are a tradition and whether marketing is actively involved in the company or just given lip service.
- May I go with you on a sales call? There are a lot of things to look for in this situation. An important one to watch for is how much talking the salesperson does versus the customer. In a good sales situation, the customer does the vast majority of the talking.
- May I visit your marketing department? Some companies have a marketing department in name only. If none exists, you know that you are with a “selling” organization rather than one with a marketing orientation.
7.13 HANDWRITING ANALYSIS
Graphology, handwriting analysis, is used by at least 3000 businesses in the U.S. and approximately 85% of all hiring decisions in Europe. Its increasing popularity is partially due to growing legal limitations in polygraph testing and the type of information obtained from reference checks. According to graphologists, the strength of graphology is that hand writing will tell things about the person that they don’t know they are revealing. Accordingly, the true nature of the individual is revealed.
TRANSPARENCY “What’s In a Signature” discusses what the size of a signature reveals about a person. It should be pointed out that the signature is only one aspect of handwriting analysis. When compared with the rest of the writing sample, it does suggest whether he or she is showing his or her true personality.
Although graphologists and some practitioners have reported extremely good results from the use of handwriting analysis, research results are mixed. In a review of the graphology research, Randall and Randall (“Salesperson Selection Techniques and Criteria,” International Journal of Research in Marketing, (December, 1990), 7, p. 88.) report: graphology appears to have no empirical validity. The appeal of handwriting analysis seems to be in part that graphologists’ reports can sound convincing and that the graphologists are willing to make judgments in areas where psychologists are not. The graphologists’ predictions are usually very general and difficult to verify. However, graphologists have achieved results that were only a little lower in predictive power than a whole battery of psychological tests and at a much lower cost.” For more information on graphology, see J. Fischman (1987), “Graphology: The Write Stuff?” Psychology Today, 21, 7, p. 11.
|7.14 NINE MISTAKES AND HOW TO AVOID THEM Mistake 1: Relying solely on interviews to evaluate a candidate. The typical interview only slightly increases a company’s chances of selecting the best candidate. Experts offer three reasons why interviews are such poor predictors of sales success and why they remain the most common selection technique: • Most managers do not take the time to structure an interview beforehand and determine the ideal answers to questions. • Candidates do much more interviewing than most managers and are more adept at presenting themselves than many managers are at seeing through their “front.” • A typical interview helps managers evaluate personal chemistry and determine how well candidates might work together with others. Mistake 2: Using a generalized “success” model for selection. While measuring the success characteristics of top performers may seem like a good idea, understanding differences between top performers and low achievers is more important for developing a selection model. In addition, validating the critical success skills by comparing large enough samples of top performers and weak performers will help you determine the factors that consistently distinguish the winners from the “also rans.” Duplicating success may seem like a good idea, but the reasons people succeed cannot be determined simply by measuring the characteristics of top performers. Otherwise, you may select well-spoken, energetic candidates who fail quickly but with style. Mistake 3: Too many criteria. Avoid getting caught up in looking for a large number of success factors. Be sure to validate those that you do select. Usually, the most critical factor for predicting success in a particular job is as important or more important than all other factors combined. To hire winners, decide on six to eight factors that separate them from losers. Ignore those factors that are not validated, or you may end up hiring nice guys who ﬁnish last. Mistake 4: Evaluating “personality” instead of job skills. Although certain personality traits—high energy, honesty, a solid work ethic—seem to practically guarantee success, they don’t. While some research has shown a slight positive correlation between extraversion and conscientiousness and job performance, there may be other factors that affect a person’s performance in a particular job. Understanding how these factors ﬁt in the overall recruiting picture is more important than knowing if your sales candidates are outgoing and thoughtful. Mistake 5: Using yourself as an example. Your own sales success might lead you to believe you can spot candidates with potential, but don’t count on it. Many managers who reached their position by virtue of their sales success believe they can instinctively recognize a good candidate, when they are unconsciously just using themselves as a template. In these instances, one’s ego often gets in the way, which can “bias” or skew one’s objectivity in judging others. Mistake 6: Failure to use statistically validated testing to predict job skills most critical to success. In some companies, committees use deductive reasoning or brainstorming to identify criteria for candidate selection. Although this technique may encourage cooperation and participation, it has the potential to result in too many nonessential success characteristics. In other words, using statistically validated selling skills and ability should be the goal. Often, committees and common-sense attitudinal and personality criteria are used because these are easier to use than measuring candidates’ skills. Gauging skill levels requires carefully developed tests or on-the-job trials which many managers are unwilling or unable to conduct. Mistake 7: Not researching why people have failed in a job. The reasons why people fail in a job are often different from the criteria used to select them. Most managers can list the most common reasons why people have failed, yet they seldom incorporate the information into developing new criteria for future candidates. There would be a signiﬁcant reduction of hiring mistakes if managers would incorporate the identiﬁed “failure points” into the selection process. In most competitive sales situations, for example, the average prospect buys from a new salesperson only after six contacts. The average unsuccessful salesperson tends to give up after three contacts. Although some of the salesperson’s techniques may be adequate, the tendency to give up after three rejections is not easily uncovered or evaluated. Mistake 8: Relying on general “good guy” criteria. Everyone may want to hire good people, but being a good person does not ensure success on the job. You may be able to get away with using broad “good guy” criteria for entry-level hiring, but more specialized criteria is needed for those sales positions that require experience or specialized sales skills. Mistake 9: Bypassing the reference check. Various recruiting and placement agencies report a fairly high percentage of false information presented in resumes and job applications. In fact, as many as 15 to 20 percent of job applicants are likely to provide false information on their resumes. To ﬁnd out who’s pulling the wool over your eyes, make the extra effort to verify the information your applicants provide. An individual who twists the facts to get a job is likely to bend the rules on the job. Checking references may seem tedious, but it beats the frustration and cost of hiring someone you have to ﬁre in two weeks. This Lecture Enhancement is based on a study by The H.R. Chally Group titled “How to Select a Sales Force that Sells,” 3rd edition (1998).|
7.15 SURVEY – WHAT MAKES A SUPER SALESPERSON?
One of the basic tenets of this chapter and the reason to evaluate the validity of all selection tests is that the characteristics of a super salesperson are company specific. TRANSPARENCY “What Makes a Super Salesperson” shows the competencies found to be associated with outstanding salespeople in a personal computer company compared with those found in a photographic equipment company. Both lists were compiled by Hay Management Consultants. Competencies are divided into Threshold (i.e., found in all members of the sales force) and Differentiator Competencies (i.e., those that distinguish outstanding salespeople).
The Hay consultants also found that two characteristics were detrimental to sales for the personal computer company. These were 1) a lack of self-confidence; and 2) high “affiliation” needs; that is, a tendency to take rejection personally and generally be more concerned about the relationship than the sale itself.
This information is based on an article by Thomas Rollins (1990), “How to Tell Competent Salespeople from the Other Kind,” Sales & Marketing Management, (September), 116‑118.
7.16 RECRUITING AND SELECTION SIMULATION
One recommendation in teaching this recruiting simulation is to have the students focus on the decision process using the criteria provided. The process could be either linear (such as multi-attribution), a weighted linear process, or a non-linear process (such as lexicographic or conjunctive). Another one of the more difficult aspects of this simulation, and hiring in general, is how students operationalize the desired attributes. For example, what résumé items would indicate a high degree of “initiative and goal-directedness?” Emphasizing these aspects of recruiting salespeople highlights the difficulty and ambiguity of the entire process.
Usually this exercise works well as a homework assignment using groups of 3–4 students. Students also enjoy putting their answers on the board for comparison across groups (you’ll need to assign temporary group numbers). Often students will react with spontaneous and spirited comments (“Oh, give me a break, how could you pick that Southwestern guy?”). Usually, there is always sufficient variance across the candidates to generate an interesting discussion.
An alternative approach is to have the students discuss the job applicants in small groups, either in-class or out-of-class, and ask them to reach a group consensus. The processing strategy would generally be the same. A variation of this approach would be to ask one team to take the role of the personnel office. The remaining DSM teams are then asked to defend their recommendations to the personnel office teams. Additional complexity can be introduced by assigning the personnel office certain tasks – such as forcing the DSMs to be very explicit in their explanations of how they made their decision “due to EEOC requirements,” or some other requirement.
It is important to note that the 15 résumés are real undergraduate students who were applying for the sales position in this case. The résumés are the student’s creation, warts and all, and were submitted to the DSM of the participating company. To protect the anonymity of the résumé providers, an attempt has been made to delete all names. Also, these résumés have been retyped, so there may be some formatting differences that the students should try and overlook.
One of the more interesting aspects of this case is the additional follow-up data that provides the “answers” to what happened to these people. That is, which ones were ultimately selected by the DSM? The information as to the candidates that were selected for an interview and those that were offered a job is shown in Exhibit 1. Also, there is data as to what happened to these people after they graduated from school. Based on experience with using this case in class, students seem to find the follow-up as the most enjoyable part of the case.
Finally, you might want to reuse the materials to avoid copying costs, so instruct the students not to write on the résumés or instruction materials.
|Applicant||DSM Decision||Subsequent Career Status|
|A||Did not interview||Black & Decker Account Rep Currently ranked 3rd in nation|
|B||Did not interview||Northwestern Mutual Life Agent Made $60,000 first year President’s Club Member|
|C||Did not interview||Baxter Sales Rep Regional Rookie of the Year Has consistently performed above quota|
|D||Was interviewed No offer made||M & M/Mars Account Rep Ranked first in Region 540% of quota first year|
|E||Was interviewed No offer made||Eli Lilly Pharmaceutical Rated Outstanding New Rep Achieved 350% of Plan Now works for NCR Corp|
|F||Was interviewed Offer made & refused||Has worked numerous part-time jobs as waiter, etc.|
|G||Did not interview||Baxter Account Rep Top 1st year rep Promoted to Regional Customer Service Mgr.|
|H||Was interviewed Was hired||Top rep in region 2 years Was hired Promoted to Territory Mgr. Resigned – now modeling in NY|
|I||Was not interviewed||Merck & Co. Sales Rep Promoted to Senior Rep|
|J||Was not interviewed||U.S. Sprint Sales Rep 3 time award winner Resigned – moved to Pakistan Now American Express Rep|
|K||Was interviewed Was hired||Top sales rep in nation Won 7 national titles Promoted 3 times in 18 months Resigned – now Senior Account Mgr.with Johnson & Johnson|
|L||Was not interviewed||Motorola Service Sales Rep Promoted 2 times|
|M||Was interviewed No offer made||NCR Retail Account Rep Average performer – resigned|
|N||Was not interviewed||Motorola Marketing Rep Promoted to Regional Sales Mgr.|
|O||Was not interviewed||UARCO Sales Rep Ranked 2nd in Region|