Ms Mkhize decided to start her own business that produces and sells a line of vegan, natural
Question:
Ms Mkhize decided to start her own business that produces and sells a line of vegan, natural and organic hair products, as there was increasing demand for this niche market. Ms Mkhize's company has grown, and she now has eight employees assisting her. However, they are unable to keep up with the demand. As it is a small business, all her employees work on different tasks from production, marketing and sales to deliveries, and everyone assist where they can. She decided that she needed help with the business and hired Mr Tlali as a manager to help her take her business to the next level by having a more formal structure in place in terms of the organisation, its budgeting and evaluation of employees. Ms Mkhize also decided to hire three more employees who would have to be trained. Mr Sono has been with the company since it started and has been assigned to mentor the new employees. Ms Mkhize informed Mr Tlali that she wishes to increase sales and eventually have a wellknown brand of hair products. He said that in order to do that she needed to list the tasks that her employees perform to get the products made and sold. Mr Tlali suggested two departments: • Production who make the products, fill them into the containers and orders the raw materials and packaging. • Sales and marketing who contact prospects, take orders, answer queries and maintain relationships with customers and prepare the sales orders received for delivery. While working on the budget, Mr Sono had to first set out a sales forecast to determine how much raw materials and containers needed to be ordered in order to avoid "out-of-stock" situations that occurred previously. He also needed to work out costs such as staff remuneration and training, phone bills, internet costs, rent and office supplies. Ms Mkhize had previously had to use some of her own money to cover some of the costs which she had forgotten to budget for, such as promotional brochures and business cards. Having identified all the various costs involved in running the business, Mr Tlali did the initial allocation of resources for the different departments and asked the employees to try and think of creative ways to still meet objectives and save on some costs. Before developing a formal evaluation plan, Mr Tlali asked employees from the different departments to explain their tasks in order to group them into categories that will be used to measure their performance. Then Ms Mkhize and Mr Tlali will examine the list to see if they agree by rating the performance categories. They then measure employees based on the agreed-upon list.
QUESTION:
After receiving advice from a fellow business owner, Ms Mkhize wants to evaluate the performance of the recruited salespeople. With more emphasis on practical examples, provide suggestions to Ms Mkhize on how she can apply the SEVEN steps involved in evaluating salespeople. i.e.:
1. Review job description
2. Establish basic policies and sales goals and objectives
3. Determine performance evaluation standards and criteria
4. Agree on individual performance standards
5. Compare performance to standards
6. Discuss results with salespeople, including variations and improvements
7. Take corrective action if necessary
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey