Sales Performance Management in KRC

Forster73
Case Analysis
Vision
17(1) 73–81
© 2013 MDI
SAGE Publications
Los Angeles, London,
New Delhi, Singapore,
Washington DC
DOI: 10.1177/0972262912469568
http://vision.sagepub.com
Sales Performance
Management in KRC
Anirban Basu
Bhavesh Pande
Vinod Kalia
Tanuja Sharma
Case Analysis I
Today the world is caught up in the throes of change. The
wheels of time are in rapid motion, causing turmoil in all
walks of life. To cope with this upheaval, proactive organizations focus on relentless ingenuity, creativity, commitment and determination to stay in the game, edging out the
ordinary. Ability to manage constant change while moving
ahead keeps an organization sustainably surviving. This is
a case where one-time successful company, not being able
to keep the pace with the winds of changes in dynamic
business scenario, is gradually fading out. We will scan
through the changing business environment especially in
North Region, KRC’s response to these changes and the
performance trail of one of its successful sales executives
amidst this shifting landscape.
Tyre industry is an ancillary to automobile trade. The
industry saw good growths during 1990s because of substantial increase in vehicle sales; during that period KRC
and its dealers had registered healthy augmentation with
relatively less effort. What were the key success factors of
yesteryears? Demand of tyres was so high that the tyres
were sold at a desired price; dealers’ investment was less as
whatever stocks used to come, sold out in cash. The price
and investment factors resulted in high profitability to
those few tyre dealers. It was a sellers’ market and both the
manufacturer and the dealers enjoyed the merry time.
Being ‘effective’ was the only condition to remain successful in seller’s market environment. But with the passage of
time, as it happens with the maturity phase of any industry,
the competition gradually increased with the entry of many
new players, price wars started and sustaining the growths
and profitability became more and more challenging.
This ‘new reality’ resulted in a gradual shift of the business setting from seller’s to buyer’s market. Let us identify
what are the success factors to operate in a buyer’s market.
The more the trade environment becomes cut-throat in
nature, the more one needs to shift one’s business from
‘effective’ to ‘efficiency’ platform. Before we go deep, we
need to be aware of what type of business KRC deals in.
Tyre category is neither a low involvement product (LIP,
e.g., chocolate) that can be purchased in impulse, nor it is a
high involvement product (HIP, e.g., white goods) that
demands a series of referrals and long-term planning;
rather tyre is sold more on its loyalty, new range, price and
availability parameters. KRC, being an old player, definitely have certain degree of loyalty amongst its dealers
and end users, but the other three success factors are pulling down KRC to compete in today’s ‘new reality’.
To ensure new range, price and availability, the organization needs to manoeuvre its sales and marketing strategy
broadly two pronged—first, to increase sales and second,
to reduce cost. Now let us decompose these two top-line
broad strategies further downwards. What are the key steps
to achieve the first strategy ‘increased sales’? There can
again be broadly two routes, widening the availability and
deepening the pipeline. Widening the availability means
enlisting more and more dealers across geographies. Why
should one need to widen the availability of products and
services? The logic is simple; in a competitive scenario,
companies who are able to manage the end user’s expectations best will win. End user today is increasingly demanding; not ready to walk an extra mile to procure what he
needs; rather the winning company delivers the product
and services at end user’s doorsteps. Hence, making products and services at the ‘arm’s reach of desire’ of the consumer is one of the critical winning tactics. Widening the
availability, in simple terms, is ‘selling same (products/
services) to the new (customers)’.
Now, let us discuss the second sub-tactic of ‘increased
sales’ strategy, namely, ‘deepening the pipeline’. What
does it mean? It means ‘selling new (products/services) to
the same (customer)’. This will help to deepen the stocks
pipeline by increasing the new range of products (or services) for the existing set of customers. To build the stock
depths at the customer level, the role of the organization is
critical in developing new products (or services) identifying the varying needs of the end users.
After the above analysis, it will be easier to address
the issues posed in the case study. Ramandeep (RD),
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Sales Performance Management in KRC
typically sales personnel of seller’s market environment,
was finding it increasingly difficult to cope with this ‘new
reality’. Let us evaluate RD’s actions first. RD had an
extremely good trade relationship with the dealers due to his
long tenure in Punjab. But he put no effort to increase his
dealers’ base; rather he stuck to and remained dependent on
the same set of old business partners. On the contrary, the
competitive companies went ahead on ‘widening the availability’ strategy. This benefited the competitors in many
ways; first, their products were more conveniently accessible to the end users; second, the companies could mitigate
the risk of doing the business with few partners. Finally bigger base of new dealers created an internal competitiveness
amongst themselves which helped KRC’s rivals to become
more forceful as well as ‘efficient’ in operations. On the
contrary, RD’s decision of staying with the loyal old partners invited bigger problems for KRC. This primitive set of
dealers, being accustomed in a seller’s market, lacked the
interest to fight aggressively for growing the business and
gradually became inept in today’s environment. As a result,
KRC’s market share receded from 21 to 14 per cent; the
company got trapped into a vicious cycle. The sales came
down and the stocks at the dealers’ warehouse started piling
up. Decreasing sales caused slowdown in cash recovery. In
order to manage the cash flow, the company offered
extended credit days and cash discounts. This fueled towards
increased ‘cost to serve’ and became the key barrier to retain
profitability. Hence, the second broad strategy of making
profits through reducing costs got severely hampered.
What alternatives should the RSM resort to? Broadly
there are two options, first one is a quick-fix; replace RD
with someone else and Ronit has conveniently opted for
this easy choice. But this decision does not ensure a solution to the crisis. Substituting RD with a new Sales
Executive has manifold implications. The newly appointed
Sales Executive may (or may not) be having the required
aggression, insight and expertise to handle the present business situation. If the new employee turns out to be no better
than RD, the change will do more harm than good. How? In
the present situation, when the company is not doing well
in business, probably customer relationship, what RD built
through years, could have been used as the foundation to
reconstruct its new business strategy. But with the exit of
RD, the organization loses its hard earned trade relationship, the only strength KRC was still left with.
What could have been the best alternative? Here we can
refer to Annexure 5, the training records of RD. Inputs he
received during 2000–2002, eight years back, is more
skewed towards selling skills and dealer network management. In both these training programmes as well as in actual
field implementation RD came out in flying colours. Then,
with the passage of time, the game has changed. The business success factors shifted from ‘effectivity’ to ‘efficiency’
Vision, 17, 1 (2013): 73–81
format. Rapport and relation based transactions gradually
moved towards commercially driven deals. To adapt to this
new business situation, one needs to learn the new tricks—
business financials, balance sheets, profit and loss accounts,
return on investments (ROIs), working capital management, cash flow management, current ratios, liquidity
ratios, etc., and, more importantly, be trained to apply these
factors in managing his business. Whose responsibility was
to bridge these gaps of knowledge and competence of an
employee? KRC, as an organization, could have been
proactive to complement RD’s excellent relationship skills
with basic financial acumen, which unfortunately was not
being done. There was no dearth of doubt in his loyalty
towards the organization; his performance was also consistently above average. An employee with these two significant traits should have been treated as an asset, which
the organization disastrously failed to identify and exploit;
and thus the one-time asset slowly turned into a liability.
The manner in which the exit of a senior and loyal
employee like RD took place will have far-flung downbeat
implications amongst other employees, which, most of
the time, is apparently invisible to the management.
Performing employees across geographies will be dejected,
de-motivated and more importantly, uncertain about their
future in the organization. And once this insecurity settles
in, it spreads fast with a snowballing effect.
KRC as an organization has not only miserably failed to
keep pace with the winds of changes, but also made few
blunders, and the last one is fatal (to show pink slip to a loyal
and effective employee like RD). Now Ronit as RSM needs
to pull his sleeves and make a concrete action plan for managing the immediate priority of filling up the gap of RD. He
needs to push Chadha, the Branch Manager, to train, coach
and prepare RD’s replacement as early as possible. Along
with this crisis, the RSM also needs to focus on the overall
skill building of his sales team members to equip them to
address the new reality of business that shifted from relationship to commercial platform. He also needs to proactively
strategize with cross-functional departments, for example,
finance, marketing, supply chain and HR, to compete with
rivals. All these short-term actions he needs to execute on a
war footing. Simultaneously, he needs to plan the long-term
objectives also, for example, future business and growth
strategy for his region, dealer development programmes,
market expansion strategies, performance appraisals and
career progression plans of his subordinates and many more.
The true test of Ronit Ray’s capabilities as a senior manager begins now.
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Anirban Basu
Corporate Sales Training Manager
Nestlé Equatorial African Region
Riche Terre, Port Louis, Mauritius
75
Anirban Basu, Bhavesh Pande, Vinod Kalia and Tanuja Sharma
Case Analysis II
The case gives data (Annexure 4) on three of the five areas
identified by the company as areas of priority, namely:
1. Meeting the budgeted volumes
2. Expansion of the distribution network
3. Reduction in outstanding in the market
RD has been the main contributor (40–50 per cent) in
the branch meeting the budgeted targets till 2005. The
point of inflexion in performance achievement terms has
been 2006—after which RD’s sales achievement is lagging
behind the branch. This is brought out clearly in the graph
in Figure 1.
In absolute terms of performance criteria of KRC
(Annexure 6) seen vis-à-vis achievement of the sales targets, RD’s performance can be rated as ‘Fair’ between
2006 to 2008, ‘To improve’ in 2009 and simply ‘Not
acceptable’ from 2010 onwards. Analysis of outstanding in
the market also clearly shows that the RD’s credit sale is
pulling down the branch’s performance in this parameter as
seen in Figure 2. Further the divergence in the performance
of the branch and RD’s plots show a lenient treatment by
RD in collections of the outstandings. This may or may not
be resulting in extended credit on secondary sales by the
dealers with a float on KRC products being more than that
demanded by market.
The performance appraisal criteria (Annexure 6) at
point 2, (ii) states that ‘While evaluating performance,
the territory and the branch performance to be considered’.
This criterion is relative and RD is pulling down the branch
performance after 2002. The qualification that credit
terms are extended with the knowledge and approval of
HO does not mitigate the fact of lenient credit terms in
RD’s territory.
The plot of network coverage (Figure 3) points out
how competitive is RD’s territory in terms of network
management.
1. The universe of dealers in RD’s territory is bigger
than the dealer base of KRC in entire Punjab.
2. The industry embarks on a network expansion in
2002 which gathers pace in 2005.
3. Plot of KRC network in Punjab and universe of
dealers in RD’s territory is also following the industry in network expansion though at a lesser pace.
4. Within Punjab branch, network expansion in territories of other sales executives has followed the industry curve.
5. Slope of network expansion of industry versus that
of KRC when linked to other two parameters points
to criticality of this parameter in achievement of
corporate success.
6. The near flat curve KRC dealers in RD’s territories
shows no results in this critical area by RD.
Figure 1.
% Achievements of Sales Volume
120
100
80
60
40
20
0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
YTD
% achievement Branch
% achievement RD
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% achievement Others
Sept
Vision, 17, 1 (2013): 73–81
76
Sales Performance Management in KRC
Figure 2.
Outstanding in Number of Days
60
50
40
30
20
10
0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
O/S in number of days of Sales RD
O/S in number of days of Sales Branch
The declining performance has also been attributed to
recessionary environment since 2008. However, industry is
looking at a growth of 60 per cent in 2011 (tyre market
pegged at INR 12,500 million till September as against
15,000 in entire 2010). Growth in volume of the branch
and other sales executives when pro rated over last year
stands at 70.59 and 87.27 respectively as per Annexure 4.
2011
YTD
Sept
This is in stark contrast to a meagre growth of 11.11 per
cent in RD’s territory.
The selling and networking abilities of RD have seen
him through during the start of his career. This is borne out
by his being the best sales man of the year during a long
period as well as being adjudged the best trainee in two
programmes (Annexure 5). However, RD has failed to see
Figure 3.
Network Coverage
300
Dealer Network Coverage
Universe of Tyre Dealer in
Punjab
250
200
▲ Dealer Network Coverage
▲
Number of KRC Dealers in
Punjab
150
◊
100
50
▲ ▲
▲
▲
▲
▲
▲
▲
▲
▲
▲
▲ ▲
▲
10
YT
D.
..
09
20
11
20
20
07
20
08
06
20
05
20
04
20
03
20
20
02
20
01
20
00
20
99
98
19
19
Dealer Network Coverage KRC
Dealers in RD’s Territory
Dealer Network Coverage KRC
Dealers in Other’s Territory
0
Vision, 17, 1 (2013): 73–81
Dealer Network Coverage
Universe of Tyre Dealer in RD’s
Territory
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77
Anirban Basu, Bhavesh Pande, Vinod Kalia and Tanuja Sharma
Figure 4. Ability and Willingness Matrix
Willing
Train/Develop
Praise & Promote
Unable
Able
Throw Out (RD)
Motivate
Unwilling
the changing environment and adapt to the changes. This
can partly be attributed to dropping out of some of the
key training programmes. His willingness to add on to the
competencies or to make efforts suited to the changed
competitive environment is questionable as in Annexure 7;
he nowhere recognizes the need to go for network expansion or records any efforts put in for embarking upon the
same. Neither is there any mention of the efforts put in for
reduction in outstanding, rather he raises a red herring of
bad debts to justify not achieving the volume targets in
2010. He has also not identified any training needs to arm
himself for the new realities or requested to be considered
for the missed training opportunities. If we look where RD
figures in the 2D matrix of ability and willingness and possible action on his future (Figure 4), the company needs to
terminate RD’s services.
The previous regional managers have been promoted
from in-house and were once colleagues of RD. They may
not have forcefully put across to RD the changed imperatives of the business. There has been new inductions (the
other two sales officers have joined within last one year
only) and the termination of an executive once considered
a star may adversely affect their motivation. Also there
may be some executives who may be in the ‘Unable but
Willing’ quadrant, whom the company may want to retain.
Terminating RD’s services may trigger their unwarranted
migration or convert them to ‘Unable and Unwilling’
quadrant.
Transfer to the smallest territory is a clear signal to RD
and other sales executives/branch managers that the company puts premium on performance. Subsequently, if RD
performs, it is company’s gain. If he does not, he can be
shown the door with minimum damage.
Ronit has changed companies for vertical growth
whereas RD has worked with the company for almost 18
years building relationships with the dealer network. If we
look at the sales per dealer for the data available (Figure 5)
RD’s theory of relationships bringing business is debunked.
In his prime, when KRC market share was around 21 per
cent, the per dealer throughput of RD’s dealers was lowest.
This has improved during last five years when the company’s market share has slid to 14 per cent.
The choice of brands available to the customer in the
changed scenario has to be countered by offering larger
number of points of sale in the market. Loyalty to dealer
network here is being disloyal to the company. The issue
of employee loyalty has to be seen in the context of the
company’s objectives being met and not in terms of staying
in the organization. This discussion clearly brings out that
RD has not been an asset during the last 5–6 years and
hence no differential treatment can be justified on loyalty
ground.
The action on RD also has to be seen in terms of the
morale of the other sales executives within and outside
Punjab branch. It can be assumed that RD, being sales man
of the year for a number of years, would be well recognized
and well networked. Such action sends a clear signal for
others to fall in line. There are a number of such cases in
front of Ronit. However, the choice of RD can be on
account of lower market share in Punjab (11.6 per cent) as
compared to national average (14 per cent) and strength of
the message to field force—‘if it can happen to RD, it can
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Vision, 17, 1 (2013): 73–81
78
Sales Performance Management in KRC
Figure 5.
Sales per Dealer
70.00
60.00
Actual achievement in ` million
Universe of Tyre Dealer in Punjab
50.00
40.00
Actual achievement in ` million
Number of KRC Dealers in Punjab
30.00
20.00
10.00
Actual achievement in ` million
KRC Dealers in RD’s Territory
Actual achievement in ` million
KRC Dealers in RD’s Territory
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
....
20
99
20
00
19
19
98
0.00
happen to you’ among others. Needless to say that the new
incumbent in RD’s shoes has his work cut out—embarking
on network expansion while retaining sales from the existing dealers.
Bhavesh Pande
Sr. Manager (Consumer Sales)
Indian Oil Corporation Ltd
Gujarat State Office, Ahmedabad
Gujarat, India
Case Analysis III
The case covers many facets of the changing fortunes of
the tyre manufacturer KRC in India. While the specific
situation deals with the problems of front line sales executives in respect of their performance evaluation, and what
measures to take to address the issue of a performing sales
executive losing his plot over a period of time. But the situation unfolds in the larger backdrop of KRC caught up in a
changing marketing environment, where it is unable to
hold on to its strong position and witnesses a great slide in
its market share in the last five years.
Ronit Roy is the recently recruited Regional Manager,
who has been charged with the task of ‘galvanizing the
sales team’ and making it deliver on some key performance
parameters like sales volume, market outstanding/receivables and distribution network expansion/strengthening.
The general situation he finds in his various branches is
rather poor, and requires him to take some decisions without waiting for much time. The first major decision he
takes within two months of his joining KRC, of transferring sales executive Ramadeep Singh (RD), who was recognized as a top performer a few years back, from the most
important territory in Punjab to the smallest territory in
Vision, 17, 1 (2013): 73–81
Rajasthan, having a market size less than one-third of earlier territory, is making him uneasy, and rightly so, since it
may have much larger impact on his future success to galvanize his team, than a one-off routine transfer.
Let us first re-look at RD’s performance. He has been
managing the Chandigarh territory for the past 18 years
since joining as a fresher out of college. Within four years
of joining, he became the super sales man of the company
and delivered top performance by virtue of his ability and
strong belief in developing good friendly relationships
with his dealers. For about five years, he was always
exceeding his annual volume targets. When the market
environment started to change and became much more
competitive, he still continued with his earlier ways to
manage his territory, but he was no longer the overachiever, although he still managed to achieve his annual
targets for the next four years. Thereafter, he started faltering, and his percentage target achievement came down to
90s for a few years and then slipped further to 80s in the
last three years. His performance on number of days
receivables was also not good, being two to three days
above the branch level. On the third performance appraisal
criteria of dealer network expansion too, he did not deliver
and very marginally increased the number of dealers from
18 to 21. So, based on this analysis, his performance has
been assessed as unacceptable by Ronit, and RD was transferred to the new territory.
It would be a mistake, however, to look at the foregoing
in absolute terms, since performance evaluation is always a
relative assessment. Let us, therefore, review the performance of the company and more specifically the rest of the
Punjab branch. During the last five years, the all India market share of KRC has dropped from 21 per cent to 14 per
cent, and in Punjab, the market share has dropped from a
high of over 22 per cent to less than 12 per cent in the last
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Anirban Basu, Bhavesh Pande, Vinod Kalia and Tanuja Sharma
seven to eight years, a rather drastic fall! This would have
certainly taken its toll on the sales forces’ morale and confidence. During the five years period of 2005 to 2010,
Punjab branch’s performance on percentage sales target
achievement has been slipping—from a percentage target
achievement of 100 or above every year (barring one year)
prior to 2005, the target achievement has steadily gone
down, reaching 88 per cent and 89 per cent in the last two
years, although the decline has been less sharp than in
RD’s territory.
On dealer network coverage, the rest of the Punjab
branch has done very well apparently—the number of
dealers has increased from 22 in 2005 (40 in Punjab minus
18 in RD’s territory) to 34 in 2010, an increase of over 50
per cent! But one must ask the question whether this means
a good and strong dealer network, especially when viewed
in the backdrop that there has not been any significant
increase in sales volume—INR 950 million in 2005 (1,700
for Punjab minus 750 in RD’s territory in 2005) to INR
1,030 million in 2010, an increase of just 8 per cent.
Furthermore, if one takes into account that the addition of
these 12 dealers would have resulted in increased inventory build up in the channel, then it becomes obvious that
sales increase from INR 950 million to INR 1,030 million
is only at the primary level—company to dealers. At the
retail level, there would have been in all likelihood a significant drop in sales. And that, despite such a massive
expansion of dealer network!
Generally speaking, expansion of dealer network is an
important activity for any company in its endeavour to
increase sales volume and market share. But over-doing
the same can result in a case of diminishing returns to a
level where gains are far outweighed by the losses.
Whenever a company expands its dealer network, it has to
be careful that it does not undermine its existing dealers to
the extent that their sales are impacted very adversely. If
that happens, then the existing dealers’ commitment and
loyalty takes a beating, and one has to see whether the new
dealers bring in sufficient sales volumes and new customers to offset the drop in sales from the existing dealers.
From the numbers given in the current situation, it strongly
appears the case where sales executives in rest of Punjab
are over-doing the dealer expansion to get short-term sales
gains, without the company realizing that the KRC brand
presence is becoming much weaker at each of the dealer
points, and the channel commitment and loyalty for KRC
brand is seriously getting eroded, which are important
long-term channel strengths that any company needs to
build up.
On the third criteria of performance appraisal, the Punjab
branch is doing better than RD’s territory, in number of days
outstanding. But to solely put the onus of this deficient performance on RD would be erroneous, since no billing could
be done without the approval of the appropriate authority at
H.O. This seems to suggest that the concerned Regional
Managers (RMs)/appropriate authority were as much in
need of such billings to achieve their own sales targets, as
was RD, and therefore they also must share the responsibility for the poor performance on high outstandings.
This is a classic case of a high sales performer enjoying
the goodwill from all quarters when the going is good,
becoming a poor performer and getting no support from any
quarters. The question to be asked is what role the management played in preventing this downfall due to the changes
in the competitive environment. When RD participated in
the Dealer Network Management programme in 2002, he
was rated the best participant. The management should have
investigated whether the 2008 programme on Collaborative
Channel Behaviour and its Management was effective in
bringing out the changed marketplace realities and whether
it could sensitize RD, since he had strong narrow beliefs
about dealers being friends first, and effectiveness of business dealings was dependent completely on this friendly
relationship. Irrespective of whether the training programme
could trigger any change in RD’s thought process, any effective change in RD’s thinking would require on the job inputs
to be provided by his superiors. It was an important responsibility of the concerned Branch Manager and Regional
Manager to help sales executives learn new skills and concepts to deal with the changed realities of the marketplace. It
appears that they were only pointing out the need for more
dealers, without discussing the pros and cons, and the care
required to not over-do the same, as also helping RD to
experiment the concept that dealer network expansion could
still be carried without affecting their commitment to the
existing dealers. The BM/RM should have acted as some
sort of shield against the risk perceived by RD in making the
change over. It appears they were not up to the task, especially looking at the blatant over expansion of dealer network in the other two territories of Punjab, without getting
the necessary gains. This responsibility of the management
becomes even more important for supporting the loyal and
performing employees to help them learn new ways to deal
with changed realities of the marketplace.
The decision taken by Ronit to transfer RD to a very
small territory, far from his current base, would mean a
demotivated RD in a new territory, without any clarity as to
how he should manage his dealers—should he change his
strongly entrenched earlier view or not? Equally important,
Ronit must think that there must be other somewhat similar
cases of sales executives who are not performing to the
required level; so would he be giving all of them such punishment postings? It is unlikely that such actions would
result in a performing and motivated team, unless he is
hoping, or wanting, that such old timers would quit the
company due to such punishment postings. But even in
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Sales Performance Management in KRC
such a situation, can Ronit hope that the other new joinees
would help him to turn the fortunes of KRC in the North
Region? Keeping in mind the huge decline in the fortunes
of KRC, it would appear unlikely that KRC would be able
to attract high performing sales executives from other companies to join its ranks. Even looking at the situation in the
balance two territories of Punjab, it would seem that such
confidence by Ronit in the new younger lot of sales executives would be misplaced, because they would also need to
learn the ropes and get all support from the management to
be effective in the highly competitive marketplace.
So, what should have Ronit done? He should try to
transform RD to become a performing sales executive once
again, for which RD needs to be counseled and motivated.
RD definitely need to move from his current territory, but
the new territory should be nearby and not so small, so that
RD does not start with low motivation—he should rather
be charged to give a fresh start with proper guidance from
his superiors. He should be given time-bound targets, so
that he pushes himself to succeed in the new territory, failing which he would be on way out of KRC. This would
also spread the message to other members of the North
Region team that performance is important for survival and
the opportunity given to them in a new territory should be
grabbed by them with both hands.
The case very aptly highlights the fact that a company
and its senior managers have to play an important role in
both—the success or failure—of its front line sales people,
and that both the managers and the sales executives need to
play their respective parts well to achieve success.
Vinod Kalia
Professor—Marketing Area
Management Development Institute,
Gurgaon, 122 007 Haryana
Case Analysis IV
This seems to be a typical case of using talent till redundancy and then punishing her/him without taking any
responsibility for nurturing and growth of the talent which
has added to the organizations’ financial success and business growth in the past. It is an example of carrot and stick
policy of reward and punishment without a thought that
such reactive actions have been a matter of past. Old traditional management approaches do not work anymore in a
highly competitive business environment, which has been
marked by shortage of talent and high attrition rate globally. Proactive management of human resource, their continuous competency profiling and fitment of role almost
after each performance assessment and evaluation cycle,
either by additional learning and development interventions or internal mobility, need to be practiced.
Vision, 17, 1 (2013): 73–81
As the key words suggest this case is equally relevant
for the challenges coming from sales force performance
appraisal/sales force evaluation, and incentives and reward
management, in addition to channel management, sales
force management, leading to sales force motivation and
retention. The dilemma present in the case largely emerges
from HR strategy and people management issues of the
organization. Implementation of sales strategy is not
enough. This needs to be supported by the design changes
in the people management practices like total rewards
management, performance measures to promote business
and client acquisition, which are linked to the sales strategy
of the company, handholding, coaching and mentoring for
correcting imbalances in the way sales are being managed
by individuals (attitude, knowledge and skill redundancy
issues), frequent one-on-ones and appraisal counseling for
requisite changes required for goal achievements in the
changing business market environment. Policies for internal and external mobility should be robust and transparent.
Ad hoc and abrupt transfers will lead to individual and
workforce demotivation and higher attrition. These initiatives will also help in ensuring a sense of equity and fairness amongst sales force.
To my mind following steps must be undertaken:
1. The need of the hour for the company is to analyze
the market/competition and come up with necessary
changes in the schemes/policies to work on regional
imbalance. It is essential for a market that has
changed recently.
2. Ramandeep has stagnated in the current position, as
per case facts. Reasons for the same needs to be
looked into.
3. The new RM needs to spend some one-on-one time
for coaching and counseling with Ramandeep and
understand/empathize the new market requirements
from the point of view of an old-timer.
4. Fact based feedback of the performance shortfall
through past reports and reason for the transfer need
to be discussed during this session.
5. Ramandeep should, maybe, be given a stint outside
his home circle, if need be, for building awareness
of non-relationship-sales as learning and development interventions and not as a punishment.
6. A good strategy may be to send him to another
region on a special profile for definite short-term
duration for helping him to understand strategies
and policy changes in the new business environment. If that does not work, planning an exit for him
will be a better option.
7. Transactional way of doing business is a powerful
short-term tool, but importance of relationship
building with the client for long-term success has
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Anirban Basu, Bhavesh Pande, Vinod Kalia and Tanuja Sharma
been well appreciated by the both academic and
industry world. Ramandeep has this strength which
needs to be leveraged.
8.A very natural and possible outcome of the current
case situation is that Ramandeep will resign from
the job. This is a case of loss of talent as he has good
relationships in the business. Worst scenario will be
if he remains in the job for a while—in the most
unproductive manner. The company will incur the
cost of relocation and ultimate loss if he is not able
to deliver effective performance in the future in the
new situation.
9.Ramandeep has family responsibilities. Work–life
balance issues can add to the trauma and shock,
leading to future poor performance.
10.The case indicates the huge possibility of demotivation for sales force at present.
This case also highlights the need for a robust strategy
for annual performance management system and reward
management for sales workforce. Performance evaluation
needs to be supported with due appraisal feedback and
learning and development interventions. Ramandeep was
left to his own devices for customer management for far
too long. He had shown the strengths of relationship-based
customer management and strategic initiative also in the
time of crisis, as conveyed by the facts of the case. He was
a perfect case for KSA alignment using coaching/mentoring
and training during his career in the past.
A robust performance management system will certainly
take care of performance of such individuals. Consolidated
three years performance evaluation data will bring the
point home that his customer base needs to be addressed.
Based on the appraisal feedback, some good learning and
development interventions may be the best reward
enriching his talent. In addition, a mentor to him, who is
also strong in relationship building, can add to his approach
to leveraging relationships. Nothing is permanent in the
domain of relationships; these are extremely dynamic
processes and need continual investment in terms of value
additions for both parties involved. A good mentor will
point out to Ramandeep as to what additional investment/
interventions he needs to make to use his relationshipbuilding strengths. In turn, word of mouth of these
customers will certainly give him more new customers.
These interventions will certainly be a win-win for both
him (an individual) and organization at large.
To summarize the analysis, following pointers from the
book The Why of Work by Dave Ulrich and Wendy Ulrich
may provide a relevant end. Job of the leaders in today’s
hyper competitive business environment is to:
MAKE MEANING in the workplace—to bring out the
best in everyone.
CREATE VALUE for your employees, your customers,
your company, and yourself.
BUILD HOPE for the future by building ‘the abundant
organization’.
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Tanuja Sharma
Associate Professor
Human Resource Management
Management Development Institute (MDI)
Gurgaon 122 001, India
Vision, 17, 1 (2013): 73–81

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