Reynolds’ Approaches to Manage Sales Team

Mark 3510 Assignment 1

Name: Mak Ching Han, Jean Student ID: 20095130

  In this essay, I am going to discuss about Reynolds’ approaches to manage his team in terms of goal setting and the overall budget allocation.

  In terms of goal setting, he does not set individual quota for salesmen. He uses historical approach to forecast the sales and adjust it with industry analysis for projected increase based on the Sales Management Magazine’s Buying Power Index(BPI). He then used the data to detect problems and make the sales among territories as equal in workload and earning opportunities as possible. He sets some personal objectives to salesmen to stimulate them to improve their performance. However, the personal objectives would just be served as guidelines but not be used for salary evaluation. Reynolds could not understand the meaning of using individual quota. He believes that the current incentive system, the training system and the support from their managers are comprehensive enough to motivate them. And using either the ratchet or potential method may contribute to unfairness between salesmen. The ratchet method would put too much burden on the strong people while too little burden on the weak people. While it is another way round for the potential method. Besides, an effective quota system requires the district managers to communicate the objectives, performance criteria and how sales quota are set for salesperson. If there is no clear guidelines provided, it may in turn result in misguided sales behavior and poor sales force morale. However, I believe Reynolds should try using the quota system and change the “status quo”. An effective quota system could definitely provide clear ideas of what amounts salesmen should generate and provide them a timeframe when they meet their quota. It also allows Reynolds to have more control over the sale activities, establishes performance standards and evaluates salesmen’s performance more accurately. A sophisticated quota system is needed here to track changes in market condition and territory realignments. Reynolds also has to ensure that the district managers communicate the objectives effectively to salesmen since the optimal execution depends largely on their efforts and coordination.