There is a five-step model used for evaluating sales people. As you can see, the first step is setting ground rules. What do we mean by that? Well, there are some decisions that have to be made before you do an appraisal. Like, who will do the appraisal? A salesperson's immediate supervisor or someone higher up? Some companies do what is called 360 degree reviews, where input is sought from those above, below and beside an employee. That is' their superiors, peers, subordinates and even customers. Another decision, is the frequency of evaluation. In a survey conducted in 2001, the most popular timing of sales performance evaluations was quarterly. The other options are twice a year, or just annually. So before you do an appraisal, set the ground rules. Next, in the process is selecting the basis for evaluation. It is easy to say, let's evaluate a salesperson on their sales and certainly, that is an important component of any evaluation. But really effective evaluations, try to examine lots of factors and not just gross sales. Basis of evaluation fall into two basic measures, outputs which relate to a salesperson's results and inputs which relate to the behaviors under a sales person's control. We'll have more on this later. In the next step, setting performance standards is probably the hardest part of performance evaluations. Standards must be fair and reasonable or the sales people will lose interest and performance. Input measures are particularly difficult since these are often judgment based and biases can creep into the picture. The fourth step is comparing the performance standards that you established with a sales person's actual performance. Finally, these results need to be discussed with the salesperson. Generally, these discussions first focus on a person's achievements and how they compare to performance standards. Secondly, a good performance discussion is forward-looking and the manager and salesperson should jointly discuss future goals and a plan to achieve those goals. These meetings can be difficult and require extra sensitivity on the part of the manager. Most people dislike being criticized and can become defensive. Some managers, avoid these discussions, because of the impact that these discussions can have on morale.