Case 4.

BELTON INDUSTRIES, INC.
MANUFACTURER OF TOYS AND BICYCLES SELECTING SALES PERSONNEL
Prepared By:
Abel Afework Biniam Kitaw Enchalew Seifu Kahsay G/Meskel Kenedi G/Meskel
selecting sales personnel
Abel Biniam Enchalew Kahsay Kenedi
CONTENT
1. 2. 3.
Summary of the Case Recruitment and selection Turnover
4.
Discuss on the Case.
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Belton Industrial Inc sales Force Recruitment and Selection Abel Biniam Enchalew Kahsay Kenedi
CASE SUMMARY
Belton manufactured a wide line of children's toys and bicycles.

Sales organization consisted of 110 salespeople Seventeen branch sales offices were selectively distributed to department stores,
products
discount houses, toy stores, bicycle shops, and general hardware stores. Albert Thompson, general sales manager for Belton Industries,
Inc., faced a problem or high turnover of sales personnel.
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Belton Industrial Inc sales Force Recruitment and Selection
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CASE SUMMARY
Wrong with the selection process and that the selection procedure should be evaluated.
Source of Staff Colleges and universities throughout the country Other sources
Branch sales managers role

Initial screening interview: eliminate obviously unqualified applicants Applicants judged as "possibilities - handed a standard application form requesting information such as personal history, education, previous experience, and the like
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CASE SUMMARY
Second interview
Given considerable information about the company applicants a sales presentation "on the spot. Compete the rating sheet forwarded to the general sales manager all materials compiled on the applicant general sales manager decided whether or not to hire the applicant, then notified the branch sales manager, who, in turn, notified the applicant.
The
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CASE SUMMARY
General
sales manager believed that the Belton sales force turnover rate was excessive (25%) above the industry's average (15%). The general sales manager lay the blame directly on the selection procedure Psychological testing could correct the weaknesses in the selection procedure
The results of each applicant's testing program could be compared with standards of achievement for sales personnel in the Belton Company and in the entire industry lead to objective decision.
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CASE SUMMARY
The Belton president, John Wesley, disagreed.
Psychological testing - Highly theoretical and impersonal, and tests in no way could be substituted for experienced judgment.
The selection process was not really the cause of the turnover problem. Job dissatisfaction and turnover would be reduced by a better job of training and motivating salespeople. Thomson agreed to concentrate more effort on training and motivation.
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CASE SUMMARY
Two years later revised training program and a stronger program of sales incentives had not completely solved the turnover problem (20%). "you can't make a silk purse out of a sow's ear
Industrial psychologist, Dr. Claude Pfeiffer: Belton should be recruiting individuals with high need for achievement
High-nAch persons are successful in endeavors that require hard work and perseverance; they feel rewarded solely through their own efforts. Dr. Pfeiffer suggested that answers to the following questions would help to identify high-nAch people.
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CASE SUMMARY
Do they use achievement words like success and accomplishment when talking about their work? Do they seem more concerned with results than with gettingalong with people? Do they have a track record of working independently? Are they mode tale risk takers rather than impulsive reckless types? Do they seem to enjoy challenges or try to avoid them?
Dr. Pfeiffer recommended that Belton Industries concentrate its recruiting efforts on, finding and hiring high-nAch salespeople. However, Thompson had reservations about seeking out and using such people in his sales force.
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INTRODUCTION
Now a days, proper management of sales force is very important and critical issue. Since it has a strong impact on the performance of the company. Managing sales personnel is the activity of the sales manager and the full cost of unsuccessful recruitment and selection are probable very difficult to estimate. Sales force management consists of planning recruitment and selection process, recruiting a sufficient number of applicants, selecting the most suitable applicants, hiring, motivating and controlling of the sales force.
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RECRUITMENT AND SELECTION PROCESS

Step 1
Planning for Recruitment & Selection
Step 2
Recruitment: Locating Prospective Candidates
Step 3
Selection: Evaluation and Hiring
Job Analysis Job Qualifications Job Description Recruitment & Selection Objec. Recruitment & Selection Strategy
Internal Sources External Sources
Screening Resumes and Applications Initial Interview Intensive Interview Testing Assessment Centers Background Invest. Physical Exam Selection Decision and Job Offer
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Planning the recruitment and selection process The primary activity is to decide the responsibility for recruitment and selection of sales force as well as other stages of sales force staffing Process . Planning involves two major tasks these are:
A) Determining the number of sales people required

Its crucial issue to companies in two ways it establish the total level of selling effort that is available to the sales organization. It is a prime determinant of organizational structure. The number of sales people needs depends on Sales growth target Distribution strategies
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Sales force organization Sales force turn over
B) Types of sales personnel needed The second task of sales force planning is determining the sales people desired Types of sales force needed involves

Job Analysis Job Description Job Qualification

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PLANNING FOR RECRUITMENT AND SELECTION
Job Analysis: Job Analysis: Entails an investigation of the tasks, duties, Entails an investigation of the tasks, duties, and and responsibilities of the job. responsibilities of the job.
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Job analysis consists of:
Analyzing the environment: it includes the nature of the

customers, competitors, knowledge and skill required for the job. Determine the duties and responsibilities that are expected from the sales person. Job Description: companies use job analysis to develop job description. Job description are formal written statements
describing detailed account of the job.

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Job Qualifications: Refers to the aptitude, skills, knowledge, personal traits, and willingness to accept occupational conditions necessary to perform the job.
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Job qualification/Specification It refers to aptitude, skills, knowledge and personality trait necessary to perform the job successfully. Job qualification includes,

Education level Previous work experience Technical expertise Attitude and interest
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Job Description: A written summary of the job containing the job title, duties, administrative relationships, types of products sold, customer types, and other significant requirements.
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Most well prepared job description generally covers : Job title Reporting relationships Types of products/services to be sold The customer to be called on by the sales person Duties and responsibilities The physical and mental demand of the job technical requirement Technical requirement Location and geographic area to be covered
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Recruitment and Selection Objectives:

The things the organization hopes to accomplish as a
result of the recruitment and selection process.

They should be specifically stated for a given period.
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Recruitment and Selection Strategy:

The plan the organization will implement to accomplish the
recruitment and selection objectives.

selection.
The sales managers
should consider the scope and timing of recruitment and
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RECRUITMENT: LOCATING PROSPECTIVE CANDIDATES

Internal Sources

Employee referral programs Internships
External Sources
Advertisements Private employment agencies Colleges and universities Job fairs Professional societies Computer rosters
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RECRUITING SALES FORCE The goal of the recruiting is find and attract the best qualified applicant for the sales positions. Recruiting needs 3 tasks
Finding
and identifying the sales recruits Evaluating and selecting Contacting candidates through the selected sources
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Evaluation of recruiting sources
After identifying sources of the recruiting sales people,

a company select those sources that are evaluated on the basis of the following criteria's:

Performance of sales force Percentage retained and
The total cost of recruiting

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SELECTION: EVALUATION AND HIRING

Screening Resumes and Applications Interviews Testing Assessment Centers Background Investigation Physical Examination Selection Decision and Job Offer
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Selecting the sales force
Developing the selection process consisting of tools and procedures to measure the applicants against the job specification that was developed under the planning stage. The second activity is to make the decision on the selection.
Selection process is influenced by

The type of job to be filled The size of the organization The number of people to be selected Outside pressure
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The steps of selection process All steps are used by few organizations, since they are time consuming and expensive. Each company designs its selection to fit its own information needs and expensive budget. The major selection tool used to select sales people: Screening resume: Comparing with job specification.
Application Blank: to review applicants background

Personal Interview: Screening and selection Interview.
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SCREENING RESUMES AND APPLICATIONS

Evidence of job qualifications Work history Salary history Accomplishments Responsibilities Appearance and completeness
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INTERVIEWS
Types of interviews

Initial Interviews Intensive Interviews Stress Interviews
Locations

Campus Recruiters Location (i.e. Plant Trip) Neutral Site Telephone

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TESTING: VALUE AND TYPES

Value
May be used to assist with initial screening May indicate compatibility with job responsibilities May indicate compatibility with organizations culture and personnel
Personality Intelligence Psychological Ethical Framework
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Types


Many studies have presented the valuable traits of sales people which includes Empathy Reliability/ creditability Product knowledge Loyalty to customers Professionalism/ Integrity Risk taking and problem solving Care for customer Careful call planning Quality information gathering and communication ability Persona sensitivity: awareness of others feelings
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EMPLOYEE TURNOVERS
1. Definition of Turnover
Employee turnover rate is defined as the average of total number of employees newly recruited and departed within a period, divided by the average number of employees over the period (Mark Harris, Tamaki Tang and Yi-Ping Tseng, 2002) According to Wikipedia Encyclopedia, in a human resources context, turnover or staff turnover or labor turnover is the rate at which an employer gains and losses employees. London South East Finance Glossary, Personnel Turnover is also the ratio of workers in a company that have been replaced over a period of time, to the average number of workers.
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THEORIES OF TURNOVER AND PRODUCTIVITY
The flow of this valuable asset employee turnover plays a crucial role in firm performance. In fact, firms (and employees) are burdened with turnover problems in both good and adverse economic climates. For instance, during the new economy boom in the U.S., nearly a quarter of workers were reported to have average tenure of less than a year (Economist 2000). During economic downturns, extra operating costs cuts through job downsizing in order to maintain the firms share value is a typical phenomenon although downsizing is not a painless option for firms.
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2. THEORIES.. CONTD
There are two main theories on how employee turnover affects firms productivity.
1.
2.
The firm specific human capital (FSHC) theory Job Matching Theory
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2. THEORIES.. CONTD
The firm specific human capital (FSHC) theory: pioneered by Becker (1975).
Lesser Training effects of high turnover Negative Productivity Effect
-From Learning by doing perspective

- From Resource constraint Perspective - From the Leavers negative words of Mouth view . In line with the last view, using a controlled experiment, Sheehan (1993) records that the leavers alter the perceptions of the stayers about the organization and therefore negatively affect its productivity.
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THEORIES.CONTD
Job Matching Theory:
The job matching theory was established by Jovanovich (1979a; 1979b) and Burdett (1978) Outlines better Job Matching effect of Turnover
Reallocation of labor effect that reduces transactions cost.

Turnover is helpful to avoid Sub-optimal matches of the employer and the employee In short, matching theory suggests that higher turnover adds to productivity.
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THEORIES OF TURNOVERCONTD
Although FSHC theory and job matching theory suggest opposite effects of turnover on productivity, one does not necessarily invalidate the other. Job matching effects dominate when turnover is low, whereas FSHC effects dominate when turnover is high. Both are all about balancing the stability Versus flexibility of the labor forces Therefore, this leads to Optimal level of turnover that maximizes Productivity. The Optimal Turnover level is therefore the level at which its positive effects (Job matching effects) is maximum while its negative effects (FSHC effects theory).
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TYPES OF TURN OVER
Internal Vs External Turnovers Skilled Vs Unskilled Employees turnover
Voluntary and Involuntary Turnover
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CAUSES OF SALES FORCE TURNOVER

Working Environment Related Causes: Safety, Convenience and Corporate Culture The lack of Prospective career Path Development opportunities Unrealistic expectations of new hires Poor candidate screening and/or recruitment Lesser investments in employees related benefits
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PREVENTION OF EXCESSIVE SALES FORCES TURNOVER

Why to Prevent Turnover? 1. High Cost of Turnover: -separation costs - vacancy costs -replacement costs - Opportunity Cost The above mentioned costs can be categorized as: Direct Cost: relate to the leaving costs, replacement costs and transitions costs, Indirect costs: relate to the loss of production, reduced performance levels, unnecessary overtime and low morale.
i.
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WHY TO PREVENT.. CONTD

According to Wikipedia Encyclopedia, when accounting for the costs (both direct &indirect), the cost of employee turnover to for-profit organizations has been estimated to be up to 150% of the employees' payment package. 2.Societal Costs : In a healthcare context, staff turnover has been associated with worse patient outcomes. 3. Competitive Advantage related Costs:
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HOW TO PREVENT TURNOVER?

Fostering Conducive workplace environment Promoting Sound Career path Development Provision of Continual training, networking and reinforcement packages Betterment of the Recruitment and Screening processes and policies Encouraging Participatory type of Management
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BELTON INDUSTRIES RECRUITMENT AND SELECTION PROCESS
Source of sales personnel:

colleges and universities other sources

Performed branch sales managers the initial screening interview at college placement centers, and at the branch sales offices in the case of applicants from other sources. applicants judged as "possibilities" were handed a standard application form personal history, education, previous experience, and the like.
Preliminary interview:

Information included on the application form:

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CONTD
contacted business and personal references by:
Mail
second interview:
Information to the applicant: about the company, its history, organization, record, products, markets, and, in particular, the specific nature of the sales operation. The branch manager probed the applicant's habits, attitudes, and motivations measure of an individual's ability to react to the unexpected make a sales presentation completed a rating sheet The general sales manager
Decide whether to hire the applicant or not and notify the branch sales manager
The branch sales manager notified the applicant
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PROBLEM FACED

Belton sales force turnover rate was excessive 25% Industry sales force turnover was 15% More specifically, Belton's turnover of first-year sales personnel was more than twice the industry average.
The task here is: Mitigating/eliminating the high turnover rate case1. The general sales manager argument
use of psychological tests in selection assuming that the problem is directly on the selection procedure.
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OUR OPINION:
We believe that right candidate should emerge.
First of all the sales manager should decide on the requirements of the job and the type of person who should be able to fulfill them. Evaluation of candidates should be in line with the criteria established during the personnel specification stage.
We also recommend the use of psychological tests and role playing as further dimensions of the assessment procedure.
N.B: The type of personality that best suited for a particular sales role can vary from one organization to another and from one industry to another depending on the nature of the sales process and sales culture in a given environment.
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WHAT
IS YOUR OPINION OF THE EARLIER DECISION ON THE USE
OF PSYCHOLOGICAL TESTS IN SELECTION?

Critics of psychological tests: It is easy to cheat Many tests measure interest rather than sales ability Tests have been used to identify individual personality traits which may not be associated with sales success
All in all applying the psychological test with great care and with the help of a psychologist could help Belton company hire good candidates. But we dont agree with the assumption of the general sales manager. Unless the root cause of the turnover problem is not identified this can not be sufficient solution.
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WHAT
THE
RESERVATIONS
MIGHT
THERE
BE
ABOUT
THE
SUGGESTION OR RECRUITING HIGH-NACH PEOPLE FOR
BELTON SALES FORCE?
Hiering high nAch people can be good solution

but is it sufficient solution? Nobody can be sure that those people will stay longer on the company. we believe that Belton industries should focus on analyzing the root cause of the higher turnover rate.
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WHAT
CHANGES, IF ANY, DO YOU SUGGEST IN THE SELECTION
PROCEDURE AT
BELTON INDUSTRIES?
1. Before beginning the selection process - the companys regional sales managers should receive training to increase their knowledge on the overall hiring process. 2. At the recruitment stage - In this regard we suggest for the company to use referrals and employment agencies as a main source of new recruits.
3. The initial screening interview at college placement centers should be performed by regional sales managers as stated in the case. However communicating with references of recruits should be handled through phone instead of using mail.
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4. However in the second interview more people in addition to the

regional sales manager should be involved. Additional people should be involved from human resource department or other regional sales managers should involve in selecting salespersons for other regions. This will help to get others opinion on the recruits. 5. Before selecting salesperson based on the interview result the company should also use psychological test as a supplementary techniques to provide a valid measures of potential. The psychological test will be performed alongside the interview with the help of trained psychologist to administer and interpret the results.
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AFTER SELECTION
After selecting salesperson proper training should be given to new employees. Applying proper compensation plan is the other major area Belton industries should consider. As it is stated in the case when the company revised its training program and applied a stronger program of sales incentives, the turnover rate decreased from 25% to 20%.
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The company should conduct intensive research to understand the real case for high turnover rate. There might be other reasons besides the selection process. Those reason should be identified and proper measure should be taken according to the identified problem.
However if the problem is directly associated with the selection process and couldnt be solved by applying new selection techniques suggested, the company should get consultancy service from hiring firms which are specialized in giving advise in salespeople hiring process.
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Thank you
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BELTON INDUSTRIES, INC.

MANUFACTURER OF TOYS AND BICYCLES SELECTING SALES PERSONNEL

selecting sales personnel

Abel Biniam Enchalew Kahsay Kenedi

Summary of the Case Recruitment and selection Turnover

Discuss on the Case.

Inc., faced a problem or high turnover of sales personnel.

Branch sales managers role

The Belton president, John Wesley, disagreed.

Abel Biniam Enchalew Kahsay Kenedi

Abel Biniam Enchalew Kahsay Kenedi

RECRUITMENT AND SELECTION PROCESS

Internal Sources External Sources

Belton Industrial Inc sales Force Recruitment and Selection

RECRUITMENT AND SELECTION PROCESS

A) Determining the number of sales people required

RECRUITMENT AND SELECTION PROCESS

Sales force organization Sales force turn over

Job Analysis Job Description Job Qualification

PLANNING FOR RECRUITMENT AND SELECTION

RECRUITMENT AND SELECTION PROCESS

Analyzing the environment: it includes the nature of the

describing detailed account of the job.

PLANNING FOR RECRUITMENT AND SELECTION

RECRUITMENT AND SELECTION PROCESS

PLANNING FOR RECRUITMENT AND SELECTION

RECRUITMENT AND SELECTION PROCESS

PLANNING FOR RECRUITMENT AND SELECTION

Recruitment and Selection Objectives:

result of the recruitment and selection process.

PLANNING FOR RECRUITMENT AND SELECTION

Recruitment and Selection Strategy:

recruitment and selection objectives.

The sales managers

should consider the scope and timing of recruitment and

RECRUITMENT: LOCATING PROSPECTIVE CANDIDATES

Employee referral programs Internships

RECRUITMENT AND SELECTION PROCESS

RECRUITMENT AND SELECTION PROCESS

After identifying sources of the recruiting sales people,

Performance of sales force Percentage retained and

The total cost of recruiting

SELECTION: EVALUATION AND HIRING

RECRUITMENT AND SELECTION PROCESS

Selection process is influenced by

RECRUITMENT AND SELECTION PROCESS

Application Blank: to review applicants background

SCREENING RESUMES AND APPLICATIONS

Initial Interviews Intensive Interviews Stress Interviews

Campus Recruiters Location (i.e. Plant Trip) Neutral Site Telephone

TESTING: VALUE AND TYPES

RECRUITMENT AND SELECTION PROCESS

THEORIES OF TURNOVER AND PRODUCTIVITY

-From Learning by doing perspective

Reallocation of labor effect that reduces transactions cost.

TYPES OF TURN OVER

Internal Vs External Turnovers Skilled Vs Unskilled Employees turnover

Voluntary and Involuntary Turnover

CAUSES OF SALES FORCE TURNOVER

PREVENTION OF EXCESSIVE SALES FORCES TURNOVER

Abel Biniam Enchalew Kahsay Kenedi

WHY TO PREVENT.. CONTD

HOW TO PREVENT TURNOVER?