Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
A Report on
2011
PREFACE
The India makes high progress on industrial levels. Due to liberalization and globalization industrial and business opportunities are increasing. So to achieve this opportunities demand of competitive management and skilled manager are also being increased. MBA Program is very well for this necessity. Because it is well structure and integrated course of management studies. In MBA practical knowledge is as necessary as theoretical knowledge.
Today in the age of globalization where cutthroat competition is prevailing in the market, theoretical knowledge is not enough beside on this practical knowledge gives experience and presents the true picture of theoretical knowledge.
As a part of the Sales and Distribution Course project we choose to study the Sales Force Management at Nerolac, India. Undergoing this study project at was very interesting and one of the finest experiences during our study.
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ACKNOWLEDGEMENT
Over the year, we have received tremendous support from my teachers, parents, friends and my guides. We am indeed thankful to them. We would take this opportunity to express my gratitude for the sustained support we have received from Nerolac Paints Pvt. Ltd. for providing us an opportunity to carry out this project. Sincere thanks to our faculty and guide Prof. Krunal Joshi helped us throughout the internship and guided in all the aspects of the project. We wish to express my deep sense of gratitude to Mr. Vishrant Gandhi,(Zonal Sales Officer, Industrial Sales) for supporting and guiding me. He was the one without whose cooperation the project would not have been a success. His guidance, encouragement and help were much indeed appreciated. Besides, this project made us realize the value of working together as a team and as a new experience in working environment, which challenges us every minute. Lastly, we offer my regards to all of those who supported us in any respect during the completion of the project. We take sole responsibility for any errors remaining. Any comments, observation, constructive criticism and suggestion for further improvement of the report are welcome.
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TABLE OF CONTENTS
PREFACE ................................................................................................................................................................ 2 ACKNOWLEDGEMENT ............................................................................................................................................ 3 1. INTRODUCTION ............................................................................................................................................. 5 1.1 1.2 1.3 1.4 1.5 1.6 2. HISTORY ................................................................................................................................................ 5 KANSAI NEROLAC PAINTS LIMITED........................................................................................................ 5 CORPORATE VALUES ............................................................................................................................. 6 THE HR PHILOSOPHY ............................................................................................................................. 7 CULTURAL ETHOS .................................................................................................................................. 8 OPEN DOOR POLICY .............................................................................................................................. 8
MEANING & THEORIES OF SALES FORCE MANAGEMENT ............................................................................... 9 2.1. 2.2. 2.3. 2.4. SALES FORCE OBJECTIVES ...................................................................................................................... 9 SALES FORCE MANAGEMENT AT NEROLAC ......................................................................................... 12 SALES STRUCTURE AT NEROLAC .......................................................................................................... 15 RECRUITMENT AND TRAINING ............................................................................................................ 16 RECRUITMENT AT NEROLAC: ...................................................................................................... 17 SELECTION AT NEROLAC ............................................................................................................. 19 TRAINING OF SALES PERSONNEL................................................................................................. 22
JOB ANALYSIS & JOB DESCRIPTIONs .................................................................................................... 24 JOB ANALYSIS ............................................................................................................................. 24 JOB DESCRIPTION .................................................................................................................... 24 QUALIFICATIONS, EXPERIENCE AND JOB DESCRIPTIONS AT NEROLAC ...................................... 25
DESIGNING THE SALES FORCE ...................................................................................................................... 27 3.1. 3.2. 3.3. OBJECTIVES OF SALES FORCE AT NEROLAC .......................................................................................... 29 DEFINING THE SALES TERRITORY ......................................................................................................... 30 DETERMINING SIZE OF THE SALES FORCE ............................................................................................ 31
4.
NEROLACS PERFORMANCE APPRAISAL SYSTEM ......................................................................................... 32 4.1. METHODS ........................................................................................................................................... 33 KRA AT NEROLAC ........................................................................................................................ 36
4.1.1. 4.2.
4.2.1.
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1. INTRODUCTION
1.1 HISTORY
It was founded in 1920 as Goodlass Nerolac Paints Ltd. It was formerly known as Goodlass Nerolac Paints Ltd. In 2006, Company changed its name to Kansai Nerolac Paints Limited. It has 5 paint manufacturing plants and about 6-7 contract manufacturers. The Nerolac owned plants are at: Jainpur (Uttarpradesh) Bawal (Haryana) Lote, Chiplun (Maharastra) Chennai (Tamilnadu) Hosur (Tamilnadu)
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Kansai Nerolac has always believed that the key to its business is : Technology Research & Development Innovations Quality
KNPL has 5 Division : Decorative Industrial Coating. (General Industries & Automotive) Powder Coating High Performance Coating Pre Treatment Chemicals
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To this end they consciously have internalized and been practicing these values in all their business transactions though human beings:
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Working together requires that we have a friendly atmosphere based on trust and respect amongst all of us. At Nerolac we follow an Open Door policy. Any person is free and welcomed to share good idea, suggestion, doubt, problem about job or work place, or uncertainties about ones future in the organization. An open and transparent communication is appreciated.
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company can help the customer improve its profitability. They seek to join their company with the customers company as partners for profit. Regarding of the selling context, salespeople will have one or more of the following specific tasks to perform:
PROSPECTING: Sales representatives search for prospects, or leads. TARGETING: Sales representatives decide how to allocate their time among prospects and customers.
COMMUNICATING: Sales representatives skillfully communicate information about the companys products and services.
SELLING: Sales representatives know the art of sales - approaching, presenting, answering objections, and closing sales.
SERVICING: Sales representatives provide various services to the customers-consulting on their problems, rendering technical assistance, arranging financing and expediting delivery.
INFORMATION GATHERING: Sales representatives conduct market research and intelligence work and fill in call reports.
ALLOCATING: Sales representatives decided which customers will get scare product during product shortages.
Companies typically define the specific objectives they want their sales force to achieve. To maintain a market focus, salespeople should know how to analyse sales data, measure market potential, gather market intelligence, and develop marketing strategies and plans. Sales representatives need analytical marketing skill and these skills become especially important at the higher levels of sales management. Marketers believe that sales forces will be more effective in the long run if they understand marketing as well as selling.
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On a whole it includes Designing the sales force, setting out the objectives of the sales force, chalk out a strategy for the sales force, to define the structure and compensation, and also the recruitment and training of the sales force. Integral part for success of marketing strategy is management of the sales force.
1) Recruitment is at the centre of an effective sales force. Companies develop selection procedure where behavioral and management skills are tested. 2) Training is essential to remain ahead of the competition. Sales force needs training before entering the market as well as training at different stage of the product life cycle. 3) Supervision on sales force is decided on the profile of product portfolio. A general supervision is maintained with respect to sales people dealing with potential clients. Supervision is related to efficient time management from preparation of client call to closing of the deal. 4) Motivation is a key aspect for management of the sales force. Here compensation plays an important part in driving up the motivational level. Compensation can be assigned based on sales quota. Other motivational tools are social gathering and family outing. 5) Evaluation is essential to management of a sales force. Sales reports sent by the sales force serve a good starting point of evaluation. 6) Art of negotiation and relationship marketing these two are the important aspects of successful sales representative and long term benefit for the company.
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Sales force management is specialized type of personal management. The personal management focuses upon sales, production or office workers but sales force management focuses only upon sales personnel. Sales personnel work away from their co-workers and superiors, so it is difficult to develop a spirit of identity with and loyalty to the company and to manage them into a unified team. Sales personnels necessity is to give freer rein then production or office workers. Up to a large extent they are relied upon as individuals to plan and control their own activities. Most sales personnel visit their home office only infrequently and centralize direction of their activities mainly by phone and mail.
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The steps in sales force management are the same as those in general personnel management. Sales force management work, starts with job analysis-determining the job objectives, the component duties and responsibility, performance criteria, and reporting relationships. The output of job analysis is the written job description that is used in deriving the necessary qualifications (job specifications) of the employee. Qualified job applicants must be found, and this requires decisions on recruiting sources and methods. From the supply of applicants, those meeting the job specifications are selected. After hiring applicants undergo initial training and throughout their entire careers with the company-receive continuing training through diverse delivery systems. Compensation plans are designed to provide appropriate levels and methods of compensation. When the salesperson is assigned to the field, other personnel activities come into play. The salesperson is motivated to plan and make productive use of working time. To improve the effectiveness of sales calls, salespersons are counseled on working habits and methods controlling sales personnel require analysis of selling records and evaluations of sales performance.
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Managing Director
Vice President
Sales Officer
Sales Executive
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Training consists of a range of processes involved in making sure that job holders have the right skills, knowledge and attitudes required to help the organization to achieve its objectives.
Recruiting individuals to fill particular posts within a business can be done either internally by recruitment within the firm, or externally by recruiting people from outside.
At the stage of selection companies have to make sure they get the right persons that subscribe to the companys objectives and value.
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INTERNAL SOURCE
Internal sources include personnel already on payroll of the organization filling a vacancy. It can be done by means of promotions which increase the general level of moral of existing employees and make them to provide more reliable information about the capable candidates.
EXTERNAL SOURCE
These source lie outside the organization, in Nerolac they consider following sources Recruitment
2011
Advertisement
For the recruitment, Nerolac consider this particular source. They give Advertisement in local newspaper and other newspaper for the post in the sales department with complete job description.
Campus Interview
This is second option that Nerolac consider. Recruiters are sent to educational institution where they find suitable candidate. Nerolac go through this option. But this type of recruitment is done for the upper level positions i.e. Assistant managers, managers etc.
Employee Exchange
An employment exchange is an office set up for bringing together as quickly as possible Candidates searching for employment and employees looking for prospective employees.
Employee Referrals
Nerolac also considers this option for recruitment. Friends and relatives of present employees are also a good source from which employee may be drawn.
Unsolicited Application
Some candidates send in their application without any invitation from the organization. A Recruiter can use these unsolicited applications for appointment and when vacancies arise.
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Following are the steps followed are as under: Application Initial interview of the candidate. Employment tests. Interviews. Checking references. Physical or medical examination. Final interview and induction.
During this, various steps like Education, Experience, Personal Detail, Aptitude Test, Interest Test, Intelligence Test, Performance Test, and Personality Test are considered. Different types of interviews are conducted like: Preliminary interview. Extensive interview. Stress interview. Discussion interview. Structured interview. Non -structured interview. Group interview. Final interview.
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When there is any vacancy in any department of the organization, they give advertisement in the newspapers.
When there is any vacancy in any department, first step is to take approval from M.D to give advertisement in newspaper. After getting approval the process goes further.
Advertisement:
After getting approval from M.D, advertisement is given in local newspaper for the related post in the sales department.
Collection of Application:
Securitization of applications:
After collection, applications are scrutinized in detail and incompatible applications are rejected. Others are kept for further process. During this process, suitable applications are considered on basis of criteria decided by Nerolac.
Interview:
Interview is being carried out by a panel of 3 to 4 members consisting of head of Sales Department, M.D. and Manager of Administration. This panel will be rating on different aspects
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such as personality, knowledge of that particular field, general knowledge, written test etc. They will be having a rating sheet consists of all such headings mentions and each panel member giving marks and then after ranking will be done.
Selection:
At the end they give the appointment letter to the person and he/she is informed about his/her Joining in the organization.
Induction:
Induction is introducing an employee to the job and to the organization. The primary purpose of induction is to give information about organization about organization so that he/she works comfortably.
1) General information about the daily work routine. 2) A review of the organization history, objectives, operation, products, visiting different department. 3) Detail information of the organization policies, work rules and benefits given to employee.
After a detailed induction program of a months duration, the trainees go through onthe- job training for a year. They get placed at assistant manager level to start with.
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Now that the selection has been made, the organization provides adequate training so that the applicant really becomes suitable for the job. Gone are the days when people thought that "salesmen were born and not made". Research has clearly indicated that the person can be trained to become a good salesman. Researchers have clearly indicated that the following are some of the factors which exist in case of a good salesman, i.e. a salesman properly trained as against one who was not so trained: He makes a more enthusiastic presentation. He has the ability to clinch the order. He has greater product knowledge. He pays closer attention to ensure that services are rendered to the customers. He has superior territory organization. He answers objections better. He can obtain more customer interviews.
The objectives of training are to give the following types of information to the salesmen, namely: Knowledge of the company, its background and history. This will give him a perspective as to how he fits into the organization structure of the company. Knowledge of the Company's products and more particularly the `selling points' or advantages that he can emphasize with a view to close the sale. Knowledge of customers, i.e. details about the types of customers and how they should be handled. Knowledge of sales and other procedure which is prescribed, such as how to get orders, what forms to fill up, the sales reports required, etc.
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Specific skill development programs are conducted for employees in sales. They also nominate their employees for external training programs and seminars.
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A job description will set out how a particular employee will fit into the organisation. It will therefore need to set out: the title of the job to whom the employee is responsible for whom the employee is responsible A simple description of the role and duties of the employee within the organization. A job description could be used as a job indicator for applicants for a job. Alternatively, it could be used as a guideline for an employee and/or his or her line manager as to his or her role and responsibility within the organization.
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2.5.3.1.
Ideal candidates will be B.Sc/ M.Sc in Chemistry,BE/B.Tec Chemical (MBA Preferred) with 2-4 years of experience. The incumbent should have an experience in paints/ lubricants / auto industry / Powder Coating / Protective Coating/High Performance Coating. Job Description: The candidate shall be responsible for: Achieving sales & collection targets, Developing new business, Maintaining the stock norms, Generating information reports on market share, new products, upcoming business opportunities etc.
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2.5.3.2.
The ideal candidate should be a Graduate, Preferable MBA with 3-6 years of experience.
The incumbent should have an experience in Profitable Sales with market share gain. Job Description: The incumbent shall be responsible for:
Achievement of sales (volume / value) as per budget. Manage accounts receivables as per norms. Manage and control inventories and SMNM stocks as per budgets through proper forecasting.
Managing the business in his division through a team of 30-40 people. Training and development of sales and admin team and develop successors for self and ASM.
Monitor, evaluate & provide feedback on performance of ASMs / PSMs Implement channel incentive scheme and ensure control measures and cost controls.
Channel management and expansion as per need of the business. Implement marketing plan and promotion, pricing, product mix & distribution policies of the company in the division
Gather information on competitors activities in the region and act upon it for KNPLs benefit.
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2. The second step is use sales people strategically. Sales people have to combine efforts with other team members to achieve the objective. Sales people should be aware how to analyze market data been provided and convert them into marketing strategies.
3. The third step is deciding the structure of the sales force. The structure of the sales is dependent on the strategy followed by the company. Common sales force structures are as follows:
Territorial structure is used where every sales representative is assigned specific geographical area. This structure is preferred for building relationships with locals.
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Product structure is used for complex and un- related product portfolio. Here the sales people are directly associated with research and development of the products.
Market structure is used if the companies are operating different industry or market segments. Every sales force specializes in a definite market and helps push a product efficiently across the given market. However, the disadvantage would arise if customers are located over a wide geographical area.
Complex structure is used when companies are in business of selling complex product to different customer across a large geographical area. Here sales force structure is a combination of other structures discussed.
Once the structure is designed companies need to make a decision with respect to the size of the sales force. The size of the sales force is dependent on the market size and number of customers. 4. The next step is to design compensation for the sales force. Compensation plays a big motivational factor for sales people. Companies follow a structure of a fixed amount plus a variable amount depending of success achieved in the market. Allowances play an important factor in the salary owing to continuous travel and market visits.
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From the above approximately the centre area is selected which can cater to entire region,
Baroda region covers Nadiad, Anand, Vidhyanagar, Baroda, Manjusar, Savli, Jambusar, Halol, Por, Karjan, Ankleshwar, Bharuch, Dahej etc.
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Give employees feedback on performance Identify employee training needs Document criteria used to allocate organizational rewards Form a basis for personnel decisions: salary increases, promotions, disciplinary actions, bonuses, etc.
Provide the opportunity for organizational diagnosis and development Facilitate communication between employee and employer Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements.
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4.1. METHODS
A common approach to assessing performance is to use a numerical or scalar rating system whereby managers are asked to score an individual against a number of objectives/attributes. In some companies, employees receive assessments from their manager, peers, subordinates, and customers, while also performing a self assessment This is known as a 360-degree appraisal and forms good communication patterns. The most popular methods used in the performance appraisal process include the following:
Management by objectives 360-degree appraisal Behavioral observation scale Behaviorally anchored rating scales
Trait-based systems, which rely on factors such as integrity and conscientiousness, are also used by businesses but have been replaced primarily by more objective and results-oriented methods. The scientific literature on the subject provides evidence that assessing employees on factors such as these should be avoided. The reasons for this are twofold: 1) Trait-based systems are by definition based on personality traits and as such may not be related directly to successful job performance. In addition, personality dimensions tend to be static, and while an employee can change a behavior they cannot change their personality. For example, a person who lacks integrity may stop lying to a manager because they have been caught, but they still have low integrity and are likely to lie again when the threat of being caught is gone. 2) Trait-based systems, because they are vague, are more easily influenced by office politics, causing them to be less reliable as a source of information on an employee's true performance. The vagueness of these instruments allows managers to assess the employee based upon subjective feelings instead of objective observations about how the employee has performed his or her specific duties. These systems are also more likely to leave a
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company open to discrimination claims because a manager can make biased decisions without having to back them up with specific behavioral information
Nerolac had a workforce of 1900 professionals and distribution network of 11,000 dealers serviced by 66 company depots spread across the country in 2004. Apart from its focus on brand building and distribution, Nerolac also focused on instituting suitable HR policies and systems to attract and retain employees of all divisions, including the sales and marketing divisions. As part of its HR strategy, Nerolac devised an effective performance appraisal system based on Key Result Areas (KRA's) for its sales professionals. The compensation was linked with the assessment of employee performance based on the KRA's. In this kind of performance appraisal system, every employee was asked to specify the Key Result Areas based on the job profile. These KRA's were reviewed by the respective superiors to arrive at the final KRA's. Employee performance was assessed in terms of KRA's on a quarterly basis. At the end of each year, the compensation and rewards were decided in accordance with these appraisals. Apart from the KRA's-based performance appraisal, Nerolac also implemented various other performance measurement systems designed for different levels of employees. Nerolac launched the 360-degree feedback initiative. However, this technique was different from the conventional techniques followed by the corporates. Nerolac followed the self-evaluation method instead of the usual process of management evaluating the employees. The objective behind this initiative was to empower the employees and bring in transparency to the assessment of employee performance. In this technique, employees were allowed to evaluate themselves on their performance. The company then conducted open meets called 'feedback-sharing initiative' at which employees could share their problems and solutions.
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For example, if one employee admitted an inability to communicate, the other employees tried to develop an action plan to help him/her overcome that inability. The company also consolidated and uploaded this feedback onto a knowledge portal developed for employees. Nerolac introduced a flexible compensation structure called 'Corporate commission for corporate performance. Generally, the managers' commission was decided based on the achievement of individual targets. Apart from such performance-linked variable pay, they were also entitled to commission based on the company's overall performance. The company planned to accomplish two objectives by this initiative. First, it wanted to make the employees aware of the larger interests of the company while performing their duties. Second, this structure provided another measure of performance that linked the individual performance to the overall performance of the department.
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4.1.1. KRA AT NEROLAC As part of its HR strategy, Nerolac devised an effective performance appraisal system based on Key Result Areas (KRA's) for its sales professionals. In this kind of performance appraisal system, every employee was asked to specify the Key Result Areas based on the job profile. These KRA's were reviewed by the respective superiors to arrive at the final KRA's. Employee performance was assessed in terms of KRA's on a quarterly basis. At the end of each year, the compensation and rewards were decided in accordance with these appraisals. Quantitative KRA: KRA Value and Volume Collections Key indicators Achievement of Budgeted Sales Value for segment Achievement of min 50% C EI or any Specific target given from HO. whichever Is higher. Qualitative KRA: KRA Systems Customers Key indicators Regular updation and usage of CRM (a) Early identification of issue which could lead to dissatisfaction along with resolution (b) Identify & develop new accounts in and around. Generation of Customer opening form Closure of unlinked items in the system Statement of Accounts sent by 10th every month Balance Confirmation - once every 3 months and c Forms collections" Weightage 25% 50% Weightage 50% 50%
Customer Administration
25%
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A well-balanced system of compensation with rewards linked to performance has created an effective performance orientation all through the organization. It is sustained perpetually with conscious, proactive systems such as Balanced Scorecard, Performance commission dependent upon key Result Areas, Corporate Commission for corporate performance Annual awards to technical personnel for excellence etc.
Well, there is hierarchy and organization structure based on functional responsibilities. But there is an excellent amount of informality, cordiality and flexibility all through the organization .
Sales compensation design begins with tying sales compensation goals to the business objectives of the company in a direct way. The selling job is subsequently carefully defined in terms of responsibilities, accountabilities, and goals. Communication and administration is the responsibility of Sales supervisor with frequent executive sales performance audits conducted.
Both qualitative and quantitative performance measures are used to communicate performance priorities for upcoming performance period. Often profit is used as a supplementary yardstick to revenues.
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Measures directly extend corporate sales goals to sales job and tie sales representative into the overall business plan of the company. Team measures are often used to reward cooperation and team selling.
Prime emphasis is on the economics of the selling task rather than competitive compensation. Incentives offer very high cash compensation for excellent selling performance. Little emphasis on competitive compensation and base salary or draw is measurably below competitive compensation for industry, emphasizing on paying for sales success.
Total cash compensation varies dramatically based on sales performance. Over 25% of sales representatives earn more than competitive cash compensation and 20% earn less than competitive.
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