Company background
Electrolux Group, headquartered in Stockholm, Sweden, is a leading global provider of consumer appliances and electronics with over a century of experience With a workforce of 54,400 employees across Europe, North America, Latin America, Asia, Africa, and Oceania, the company is committed to enhancing efficiency and quality throughout its operations Electrolux's mission is to deliver exceptional products that enrich people's lives while promoting sustainability.
Electrolux Vietnam, a subsidiary of the Electrolux Group established in 1999, specializes in innovative household and business products With its headquarters in Ho Chi Minh City and representative offices in Hanoi and Danang, the company employs 130 staff across six departments, including human resources, finance, corporate marketing, customer service, and consumer electronics The consumer electronics department, the largest with 83 employees, is divided into three sub-functions: air conditioning (31 employees), kitchen appliances (23 employees), and home appliances (29 employees), offering a range of products from air conditioners to refrigerators and washing machines.
In the AC division, each department has their own departments to go along with to support their activities for related products Specifically, there are 4 departments which belong to
The AC division is led by a head who oversees sales management, product management, customer service, and administration Product management focuses on pricing, inventory, orders, and marketing, while customer service addresses consumer inquiries related to installation, maintenance, and repairs The administration team handles various administrative tasks Comprising 3 managers and 28 employees, the AC division fosters collaboration among all departments to achieve exceptional business results and enhance customer experience.
In today’s ever changing business environment, Electrolux is proud of being one of the leaders in the air conditioning industry that foresees the future and continuously innovates to h
Developing future-proof air-conditioning solutions, the product line includes both residential and system air conditioners, featuring compatible models such as single-split, multi-split, and VRF systems Residential air conditioners connect an outdoor unit to an indoor unit, making them ideal for multi-story homes with limited outdoor space In contrast, system air conditioners are suited for larger areas, including commercial buildings and condominiums, utilizing one or more outdoor units to serve multiple indoor units Committed to continuous product innovation, the goal is to deliver high-quality, reliable products that ensure true comfort for both businesses and homes Notably, residential air conditioners represent 65% of total sales, significantly surpassing the 35% share of system air conditioners.
Electrolux Vietnam's AC division faces competition from major brands like Daikin, Panasonic, and LG, all of which focus on B2B customers These companies utilize a comprehensive distribution network that includes both modern and traditional trade channels to effectively reach and engage their target audience In the realm of modern trade, they leverage e-commerce platforms such as Tiki and Lazada, alongside prominent supermarkets like Dien may Xanh, Nguyen Kim, Cho Lon, and Tu.
Traditional trade remains dominant in the retail sector, accounting for 60% of sales, while modern trade makes up 40% Within modern trade, e-commerce represents 15% and supermarkets contribute 25% Retailers such as Truc Mai and Thien Nam Hoa exemplify the traditional trade approach.
Sales department has a total of 15 members including a sales manager, a sales supervisor,
The sales team at Electrolux consists of 11 sales representatives and a sales administrator, with the latter focusing on daily sales administration tasks Sales representatives are tasked with building customer relationships and identifying new sales opportunities, while the sales supervisor ensures customer satisfaction and monitors team performance to drive sales growth The sales manager is involved in both strategic and tactical planning for the department In a competitive air conditioning market, it is essential for Electrolux to cultivate a motivated and dedicated sales force, which is vital for revenue generation.
Problem mess
Symptoms
To identify abnormalities in the business operations of Electrolux Vietnam AC, internal data sources were analyzed, including HR reports and customer performance reports shared by the management team This internal data proved beneficial due to its accessibility, cost-effectiveness, and valuable time series information Additionally, in-depth interviews with the sales manager and sales supervisor were conducted to gain insights into the division's challenges and identify necessary improvements.
Electrolux Vietnam AC has seen a sales increase over the past three years, but growth rates have significantly declined, dropping from 17% to 11% in 2017 and 9% in 2018, despite adding approximately USD 3.5 million in revenue annually In contrast, Daikin's sales growth surpassed 25% from 2015 to 2018, while Toshiba achieved over 18% growth in the same timeframe Additionally, the Vietnam AC market is projected to grow by over 14.5% from 2015 to 2021 Overall, Electrolux Vietnam AC has experienced a gradual slowdown in sales growth, lagging behind competitors like Daikin, Toshiba, and the broader local market from 2015 to 2018.
Table 1: Sales growth of Electrolux Vietnam AC, Daikin, Toshiba and Vietnam AC market from 2016 to 2018
Sales growth – Electrolux Vietnam AC 10.2% 17.0% 11.7% 9.1%
Sales growth – Vietnam AC market 14.5%
Source: Nikkei Asian Review 43 , internal meeting h
2.1.2 Second symptom: Low customer satisfaction
Customer satisfaction is the consumer's evaluation of the difference between their expectations and the actual performance of a product or service after use This satisfaction can be measured both economically, through financial returns from sales, and non-economically, through the quality of relationships with sales representatives In today's competitive market, customer satisfaction plays a crucial role in helping organizations retain customers and achieve economic objectives like sales and profitability Research indicates a strong positive correlation between customer satisfaction and loyalty, where higher satisfaction levels lead to increased loyalty Conversely, customer dissatisfaction can result in a lack of commitment to repurchase, potential switching behavior, and negative word-of-mouth, undermining future sales.
Sales representatives at Electrolux Vietnam AC have been criticized for inadequate customer care, leading to a significant decline in customer retention and repurchases Mr Phu emphasized that customer complaints should be treated as serious issues requiring immediate attention Many customers voiced their dissatisfaction with the service, citing delayed responses from salespeople, which often left them waiting over a day and necessitated follow-up calls for assistance.
In emergency situations, customers often reach out to salespeople for immediate assistance but are instead directed to leave messages or voicemails, leading to delayed responses Additionally, customers express frustration over not receiving timely updates on critical information, such as product delivery delays or promotional changes This lack of immediate support and communication results in customer dissatisfaction, contributing to the loss of existing clients and decreased sales Ultimately, these issues hinder the long-term sustainable growth of the company.
To be more specific, Mr Phu elaborated the issue that many dealers had not ordered Electrolux products for more than 2 months although he definitely guaranteed that they had been h
Ten air conditioner specialists, known as ACS, were identified as qualified customers with the potential for monthly revenue generation due to their ample human, financial, and inventory resources Some ACS members lodged formal complaints, while others chose to voice their concerns informally, opting to delay their purchasing decisions regarding Electrolux products to maintain a good relationship with the company This made it difficult for Electrolux to pinpoint the underlying issues due to the vague nature of the complaints Ultimately, after receiving numerous customer grievances, management identified the primary problem as being linked to the salespeople Mr Quan noted that three specific cases had established a closer relationship with the company, further emphasizing the need for clarity in communication and customer relations.
After three years away from the company, it became evident that two other cases were also reluctant to promote their products This hesitance meant that when individual customers sought recommendations for suitable products, the Electrolux brand was notably absent from their suggestions.
In business-to-business relationships, the performance of salespeople significantly influences customer satisfaction Key factors such as attitudes, expertise, and traits of sales representatives affect this satisfaction To assess customer satisfaction levels, a quantitative survey was conducted among 56 business customers dealing with Electrolux Vietnam AC and its competitors, Daikin and Toshiba The survey utilized a 10-point scale to gauge responses, with 1 indicating strong dissatisfaction and 10 representing strong satisfaction A total of 53 completed questionnaires were collected, resulting in an impressive response rate of 94.6%, through both in-store hard copies and email invitations for the online survey.
Table 2: Results of the customer satisfaction survey collected from Electrolux Vietnam AC,
1 My sales representative spends sufficient time with me
2 My sales representative can be reached when I need him
3 My sales representative advises me according to my requirements
4 My sales representative deals with my concerns quickly
5 My sales representative gives me information about current developments that are important for our business
6 My sales representative is solution-orientated 6.87 7.26 7.15
7 My sales representative is flexible 6.98 7.59 7.86
8 My sales representative has professional expertise
9 I would repurchase the offering from this salesman
10 Overall, I am satisfied with the company 6.13 8.32 7.89
Source: Quantitative survey from the company’s dealers
The analysis of salesperson quality across Electrolux, Daikin, and Toshiba reveals significant disparities Electrolux recorded an average score of 6.4, indicating customer dissatisfaction, particularly with the statements regarding accessibility and responsiveness of sales representatives, which scored 5.77 and 5.86, respectively In contrast, Toshiba and Daikin achieved higher averages of 7.28 and 8.02, reflecting greater customer agreement This suggests that Electrolux must prioritize enhancing their sales team’s performance, as the low satisfaction levels highlight a critical area for improvement Organizations should focus on providing necessary support and guidance to elevate their salespeople's effectiveness.
To address the high levels of customer dissatisfaction, Electrolux Vietnam AC must conduct a thorough investigation to identify the underlying issues This proactive approach is essential to mitigate the risks of losing business partners and to prevent declines in sales By meticulously analyzing the causes of dissatisfaction, the company can implement effective strategies to enhance customer satisfaction and strengthen its market position.
12 result in customers’ action to leave the company and to suggest solutions to improve customers’ retention.
Initial cause-effect map
A depth interview was conducted to explore the underlying causes of customer dissatisfaction and the low sales performance faced by Electrolux Vietnam's air conditioning (AC) division The study involved seven respondents, including sales department personnel and a product manager, all with a minimum of two years of experience to ensure a comprehensive understanding of the company's operations Participants included a sales manager, a sales supervisor, and sales representatives directly linked to the identified issues The interviews, conducted face-to-face, aimed to capture the customer experience from the perspective of Electrolux Vietnam's sales team The findings revealed nine causes leading to two primary symptoms within the AC division, which were illustrated in an initial cause-effect map.
Customer dissatisfaction stemmed from inadequate follow-up by salespeople, as observed by the sales manager and supervisor The company implemented a policy to enhance customer service, requiring salespeople to inform dealers about special offers during key occasions However, feedback from the sales supervisor and a sales representative indicated that some salespeople failed to distribute special promotions, such as gifts and vouchers, during holidays like Christmas Eve and Vietnamese New Year This oversight contributed to customer complaints regarding the lack of engagement and appreciation.
During their grand opening, PG and PB provided support for promotions, offering dealers marketing assistance and training sessions to effectively attract and serve customers Salespeople were prepared to assist customers through various communication channels; however, delays led to unmet expectations and dissatisfaction with the company's service.
Delays in air conditioner deliveries have impacted customer satisfaction, as acknowledged by the sales supervisor The sales team struggled to meet deadlines due to unforeseen delays from the manufacturer and extended shipping times While these issues are not the salespeople's fault, it is crucial for them to proactively communicate with customers to keep them informed about the status of their orders.
Salespeople often exhibit irresponsibility by making customers wait, leading some to seek assistance from other representatives A sales manager noted that fluctuating customer demand can disrupt order fulfillment, as increased purchasing volumes may go unaddressed due to prior approvals Customers sometimes feel neglected when salespeople fail to communicate effectively about rising trends in product demand, particularly for seasonal items like air conditioners Additionally, there are instances where customers expect timely delivery of pre-ordered products, but salespeople assume it is the customers' duty to follow up, resulting in unmet delivery requests Furthermore, salespeople neglect to respond to brochure requests from dealers, mistakenly believing the marketing team will handle it This lack of attentiveness to customer needs ultimately leads to delayed product and service delivery, causing dissatisfaction among customers.
Salespeople at Electrolux Vietnam AC face significant challenges in managing their time due to demanding schedules that lead to work-life imbalance Their responsibilities include ongoing relationship management for upselling and cross-selling, acquiring new customers, and handling non-selling tasks like paperwork and meetings The influx of emails and phone calls further complicates their ability to follow up with clients Additionally, travel requirements to engage with clients and colleagues can extend beyond a week, adding to their workload To thrive in a competitive market and meet the company's goal of increasing market share, salespeople are expected to find new potential clients, which constitutes 20% of their Key Performance Indicators (KPIs) Consequently, many salespeople often work overtime and on weekends, sacrificing personal time, including family commitments and health needs, to meet their sales targets.
In a demanding work environment, employees often struggle to find time for proper meals, frequently skipping breakfast and lunch during busy days This work-life imbalance is evident when sales supervisors insist that team members stay late to assist with urgent tasks, even if they wish to leave early Sales personnel are typically required to meet clients during office hours, forcing them to complete administrative duties outside of regular hours Despite their awareness of customer needs, the overwhelming workload prevents them from promptly addressing all client requests.
Salespeople often struggled to answer customer inquiries about air conditioners, highlighting a critical need for improved product knowledge to effectively communicate benefits Enthusiastic and knowledgeable salespeople tend to engage customers better, especially when selling complex and costly items like air conditioners With various models featuring unique designs, specifications, and energy-saving functions, salespeople must convey these advantages clearly However, many business customers prioritize technological comparisons, such as between V-PAM and i-PAM inverter controls, where salespeople lacked confidence and expertise Instances of incorrect product recommendations due to poor understanding further underscored the need for better training Ultimately, salespeople appeared more focused on revenue generation than customer satisfaction, resulting in minimal purchases and a lack of motivation to promote the products enthusiastically.
Salespeople have reported a significant lack of product knowledge stemming from insufficient training opportunities It has been confirmed that the absence of adequate training sessions has left them reliant on learning through experience alongside more knowledgeable colleagues.
Salespeople expressed frustration over the lack of training and support in their roles, often left to learn independently from their experiences and brief interactions with colleagues Despite their attempts to seek guidance, their concerns were dismissed by their sales supervisor, who prioritized self-sufficiency over coaching This lack of training was attributed not to the supervisor's busy schedule but to his undervaluation of training, stemming from his background as a naturally successful sales professional As a result, he struggled to comprehend the challenges faced by his team.
Salespeople, despite having over two years of experience, often reported their skills as basic They were equipped with various software tools to enhance their selling processes, but their ability to utilize these tools effectively depended on their individual learning capacity and time management Unlike the sales team, the marketing department benefited from digital marketing training, while new HR members received comprehensive training and coaching from the HR director Additionally, the company implemented a talent program aimed at developing STEM skills for roles in factories and laboratories Salespeople expressed a strong desire for a structured training program focused on selling skills and technical knowledge to boost their confidence and effectiveness in serving customers.
Electrolux faces intense competition in the air conditioning market, with rivals like LG and Daikin introducing advanced technologies such as dual inverter compressors and eco-friendly refrigerants like R32 Dealers have expressed a strong desire for Electrolux to innovate and enhance their products, particularly to improve cooling capacity while achieving significant energy savings Additionally, customers are increasingly concerned about climate change and rising electricity bills, which have surged by approximately 8.4%.
In the near future, changing consumer priorities regarding energy efficiency are likely to influence buying behavior for air conditioners As a result, salespeople face challenges in attracting new clients who are increasingly focused on these trends.
The product manager revealed that the company's air conditioner prices are less competitive compared to rivals While dealers were incentivized to buy products at significant discounts, there was no policy ensuring consistent and transparent pricing among them As dealers aimed to maximize their profits, they often sold at inflated prices, undermining the company's ability to effectively compete in the market.
Figure 1: Initial cause-effect map
Lack of customer follow-up
Lack of awareness in dealer programs
Difficult to find new clients h
Updated cause-effect map
Managerial support involves managers being flexible with work schedules and job responsibilities while offering assistance to help employees balance their work and personal demands It is crucial for management to actively support employees, ensuring that their concerns are acknowledged and their needs are addressed effectively.
Training subordinates on the benefits of supporting their supervisors creates a positive feedback loop of mutual support within the workplace Effective management, which includes upper management involvement, thorough pre-training preparation, ongoing support during training, job relevance, and follow-up, is crucial for ensuring that training is successfully applied on the job This approach not only boosts employee productivity but also helps manage training costs Consequently, a clear link exists between inadequate managerial support and poor training outcomes.
Managers are crucial in promoting work-life balance policies within organizations, as they can enhance employee satisfaction by providing autonomy and flexibility in working hours and the option to work from home This support is vital not only for working parents and younger employees but also for those in developing and pre-retirement stages of their careers Consequently, all levels of management must actively foster a supportive workplace environment, as a lack of effective managerial support can result in a significant work-life imbalance.
To validate new variables and relationships identified in the literature, interviews were conducted with managers, supervisors, and employees from the sales department Sales staff expressed feelings of neglect regarding their concerns about work-life balance and training opportunities, indicating a lack of perceived management support The sales manager acknowledged that the current team size was insufficient to adequately serve customers However, upon investigating customer dissatisfaction, it became clear that the root cause stemmed from management's failure to address the overwhelming workload faced by salespeople, leading to a perception that their challenges were overlooked.
Salespeople often face emotional and physical exhaustion, leading them to sacrifice personal obligations for work Additionally, management fails to provide adequate training, leaving sales staff without the necessary skills to engage comfortably with diverse technology offerings and lacking a thorough understanding of how these technologies can benefit customers.
Work-life balance refers to organizational initiatives aimed at helping employees manage their professional and personal lives effectively Management that supports flexible work arrangements benefits both employers and employees by enhancing productivity, commitment, and retention while allowing employees to improve time management and reduce stress This balance is crucial for overall employee well-being and minimizing absenteeism To alleviate the challenges of maintaining work-life balance, organizations must implement supportive policies that empower employees to fulfill both work and personal roles without conflict Conversely, the absence of such policies can lead to work-life imbalance, resulting in increased absenteeism and work-related stress, ultimately diminishing overall well-being.
Sales supervisors acknowledged that the sales team faced constant pressure to achieve higher growth, leading to a focus on employee performance over personal well-being This environment encouraged salespeople to prioritize work, often at the expense of their health, with some employees frequently taking unapproved sick leave due to stress or family issues For instance, Mr Anh expressed a need for a break in two months to alleviate his mental and physical exhaustion from insomnia and personal challenges Meanwhile, Mr Phong faced a lack of support during periods of poor performance, receiving only warnings that jeopardized his salary and job security, which exacerbated his stress and isolation Additionally, Mr Minh struggled to manage his workload, leaving him with insufficient time to cope with the demands of his role.
Mr Long, a seasoned salesperson, faced physical issues due to a work-life imbalance exacerbated by his job's demands, which often required him to engage in evening client meetings after office hours To enhance his well-being, he sought to incorporate outdoor activities into his routine, recognizing the importance of exercise in counteracting the sedentary lifestyle that accompanied his profession.
Training fulfillment is the degree to which training meets employee expectations and desires Self-efficacy, or an individual's belief in their ability to manage work situations, significantly influences how employees perceive their jobs; those with low self-efficacy may view work as overwhelming, while those with high self-efficacy see it as a challenge Motivation can be intrinsic, driven by the enjoyment of the work itself, or extrinsic, influenced by external rewards such as recognition Effective training programs are crucial for enhancing both motivation and self-efficacy among employees, making it essential for organizations to invest in appropriate training initiatives Insufficient training can lead to decreased motivation and lower self-efficacy, highlighting the importance of fulfilling training needs.
Sales supervisors and managers recognized a gap in employee training workshops, leading to a culture where employees were encouraged to learn through experience and guidance from colleagues However, sales staff felt hindered in their performance due to insufficient skills and knowledge, resulting in a lack of motivation to meet revenue targets and frequent excuses for their shortcomings Many expressed doubts about their abilities, attributing occasional success to luck rather than competence, particularly in a competitive environment with complex products Consequently, there was a consensus among employees on the necessity for the company to implement job-related training workshops to enhance their skills, motivation, and self-confidence in their roles.
Segmentation is crucial for marketing as it helps companies identify and target the right customers, creating value and fostering profitable relationships By segmenting the market based on relevant criteria, organizations can effectively tailor their advertising and marketing strategies This focus on customer outcomes drives innovation, enabling companies to leverage their resources to capture market opportunities through diverse offerings Customer needs, competitive dynamics, and technological advancements guide this innovation process While product innovation is often equated with differentiation, not all differentiation constitutes innovation Additionally, companies can command higher prices for advanced technology innovations, but to deliver superior value, they must develop exceptional features at reasonable costs.
Ineffective segmentation can lead to insufficient product innovation and less competitive pricing, making it challenging to attract new clients Utilizing technology-driven innovation mechanisms allows companies to either keep pace with competitors or exceed global standards When product changes are minimal and variations are slight, companies often rely on attractive pricing strategies to engage in competitive price wars.
The product manager acknowledged that the company's segmentation strategy was ineffective, limiting its ability to differentiate and innovate in product offerings due to constrained R&D resources Dealers prioritized profitability in their pricing strategies, often incorporating marketing costs, gifts, and installation expenses into their pricing She emphasized the need for a clear pricing policy for dealers to foster confidence and encourage collaboration with new partners.
Figure 2: Updated cause-effect map
Lack of customer follow-up
Lack of awareness in dealer programs
Insufficient work- life balance policy
Difficult to find new clients
Potential problems
Electrolux air conditioners face stiff competition, as their features—such as cooling modes, temperature sensors, sleep modes, and energy-efficient inverter technology—are comparable to those of rivals like Panasonic, Daikin, and LG To remain competitive, Electrolux's sales manager highlights the importance of cross-functional collaboration among designers, marketers, and engineers to innovate and enhance product technology With consumers spending more time indoors and increasingly aware of air quality, climate change, and rising energy costs, there is a growing demand for ozone-safe and energy-efficient air conditioning solutions Panasonic's nanoe technology offers advanced purification even when cooling is off, while Daikin’s econo mode and LG’s dual inverter technology significantly reduce energy consumption To capture market share, Electrolux must continually upgrade its offerings to achieve superior efficiency and meet evolving consumer needs.
Electrolux Vietnam targets the middle-class market with competitively priced air conditioning units that incorporate advanced technology For instance, the lowest-priced 1 HP inverter air conditioner from Electrolux is priced at VND 8.5 million, slightly higher than Toshiba's offering at VND 8 million While Toshiba's model costs VND 500,000 more, it features both inverter and saving modes, unlike Electrolux, which only provides the inverter option.
DC hybrid inverter and eco Moreover, Electrolux's antibacterial technology is HD dust filter whilst Toshiba’s features IAQ filter, anti-fouling technology magic coil and mold-resistant filter
Customers increasingly prefer Toshiba products, while Electrolux dealers benefit from attractive discounts averaging 30%.
To attract new customers, discounts can be increased up to 45%, making them competitive against rivals However, some dealers raise prices to cover marketing costs, gifts, and installation expenses, which can deter potential buyers A clear pricing policy is recommended to foster dealer confidence in partnering with the company, yet this may not alleviate the competitive challenges they face Consequently, some dealers have opted to purchase from competitors instead of Electrolux The original pricing structure is perceived as unappealing when factoring in costs such as import fees from Thailand and China (50%), taxes (40%), overhead expenses (15-20%), and dealer discounts (30-45%).
Sales representatives expressed dissatisfaction with the lack of support from their sales manager and supervisor, who overlooked their concerns about work overload and inadequate training While management expected salespeople to fully commit to team goals, this imbalance between work and personal life negatively affected performance, leading to customer dissatisfaction and low overall well-being Despite their prior industry experience, salespeople felt unconfident and struggled to effectively communicate how products met customer needs, focusing instead on their own knowledge Customers rely on product knowledge to make informed buying decisions, emphasizing the importance of trust in the sales process The absence of training opportunities and work-life balance policies contributed to job dissatisfaction, prompting salespeople to seek better employment elsewhere.
25 opportunities arrived Moreover, it was challenging for salespeople to satisfy and retain customers as well as attract new clients to translate into lifetime customer value
Electrolux is well-known for its diverse product range targeting mid to high-income consumers, particularly in the rapidly growing air conditioner market However, challenges arise from insufficient product development and relatively high prices, leading to dissatisfaction among consumers Competing on price while ensuring profitability and fostering technological innovation has become increasingly difficult To drive advancements in air conditioner technology, Electrolux must invest significantly in research and development Although their air conditioners offer above-average features that cater to consumer preferences, achieving competitive pricing requires cutting costs, a complex task due to fixed expenses like importing costs and taxes mandated by management Reducing dealer discounts could make final prices more appealing, but this risks harming dealer profits and diminishing their motivation to continue purchasing from Electrolux, potentially driving them to competitors with more favorable discount structures.
Ineffective managerial support in the sales department of Electrolux Vietnam AC significantly impacts both employees and customers To address this issue, management should prioritize the implementation of a work-life balance policy, fostering a supportive workplace environment Additionally, management should facilitate training programs to boost employee motivation and productivity Ultimately, enhanced managerial support will lead to greater empowerment, improved well-being, and increased job satisfaction among employees.
To ensure the profitability and longevity of an organization, it is crucial for employees to perform effectively and maintain strong connections with customers Studies show that 60% to 80% of satisfied customers do not return for repeat business due to a lack of engagement As technology advances and competition intensifies, salespeople at Electrolux must prioritize ongoing communication with clients to prevent losing them to competitors Additionally, measuring managerial support within the division is essential, as sales managers and supervisors play a key role in addressing these challenges.
Problem justification
Problem definition
Managerial support refers to management's actions aimed at promoting employee well-being, rooted in social exchange theory, which highlights the reciprocal nature of relationships between employees and organizations This concept extends from perceived organizational support, reflecting employees' beliefs about how much the organization values their contributions and cares for their welfare Management support assures employees that assistance will be available when needed, enabling them to perform effectively and manage stress Employees assess management behaviors—such as teamwork, recognition, and open communication—as indicators of support Research distinguishes between perceived organizational support and leader-member exchange, noting that while they yield different outcomes, they are interconnected Recent studies categorize managerial support into top management support and supervisor support, emphasizing their critical roles in influencing organizational outcomes.
Problem existence
To address the identified issue, a survey was conducted among the sales department, comprising 13 salespeople, and the product management department, which has 6 employees The survey utilized a 16-question questionnaire adapted from the model by Wayne, Shore, and Liden, aimed at measuring managerial support levels within the sales department Responses were collected using a 3-item scale, where participants rated their agreement from 1 (disagree) to 3 (agree).
Table 3: Measurements of managerial support
Disa gre e Ne utra l Agr ee
1 Managers show very little concern for me (R)
2 Managers care about my general satisfaction at work
3 Managers really care about my well-being
4 Managers strongly consider my goals and values
5 Managers care about my opinions
6 Even if I did the best job possible, managers would fail to notice
7 Managers take pride in my accomplishments at work
8 Managers are willing to extend itself in order to help me perform my job the best of my ability
9 Help is available from managers when I have a problem
10 I usually know where I stand with my managers
11 Managers have enough confidence in me that he/she would defend and justify my decisions if I was not present to do so
12 My working relationship with managers is effective
13 Managers understand my problems and needs
14 I can count on managers to “bail me out”, even at his/ her own expense, when I really need it
16 Regardless of how much power manager has built into his/her position, my managers would personally incline to use his/her power to help me solve problems in my work h
Figure 3: Managerial support at sales department
Source: Quantitative survey from sales department
Figure 4: Managerial support at sales department
Source: Quantitative survey from product management department
The findings indicate that members of the product management department significantly perceive managerial support, with all items receiving over 50 percent agreement Notably, item 2 highlights that managers demonstrate a genuine concern for employee satisfaction.
At work, employee-manager relationships were notably strong, with 90.4 percent of employees feeling appreciated and heard due to their managers fostering a healthy environment This support helped employees navigate challenges, as their potential was recognized through public acknowledgment of good performance, promoting sustained excellence Conversely, those facing difficulties received guidance from managers to overcome obstacles In product management, employees were encouraged to take risks, supported with necessary resources, leading to mutual benefits for both employees and managers.
Management support in the sales department was found to be ineffective, as employees felt neglected regarding their job satisfaction, well-being, and opinions Despite their hard work, they received little recognition or praise, leading to demotivation and reluctance to seek help from managers during challenging times While relationships with direct supervisors were acceptable, there was a disconnect in understanding employees' needs and problems Consequently, managers failed to leverage their power to assist employees, resulting in unrecognized potential and unreasonable job assignments, along with a lack of development opportunities.
Interviews with five sales representatives revealed a significant issue within the sales department: ineffective managerial support The sales manager's frequent absences for partner meetings and top-level discussions, combined with the supervisor's busy schedule, limited their interaction with the sales team Despite this lack of engagement, all representatives reported maintaining good relationships with both the sales manager and supervisor.
In a recent survey of 30 managers, it was revealed that they typically refrain from involving themselves in the personal matters of salespeople, viewing such interference as unproductive Instead, their primary focus remains on the outcomes of the sales team's performance Consequently, sales professionals reported a lack of support from their managers and supervisors, highlighting a disconnect between management and their teams.
Salespeople reported a lack of support from management, with individuals like Mr Huy, Mr Phong, and Mr Anh highlighting their personal quotas in addition to team goals While quarterly meetings were held for interaction with managers, constructive feedback was often absent, leaving salespeople unclear on how to achieve their targets Managers failed to recognize and communicate successes, instead pushing salespeople to pursue new clients independently When issues arose, salespeople felt their concerns were overlooked, leading to a culture of fear regarding job security and a reliance on self-sufficiency rather than collaborative problem-solving.
During challenging times, managers often fail to leverage their authority to assist salespeople in overcoming obstacles For instance, Mr Minh recounted a situation where delays from other departments prevented timely product delivery to a dealer, yet his manager refused to intervene, instead instructing him to inform the dealer of the delay, which led to customer disappointment Similarly, Mr Long highlighted that the sales team was pressured to sell both RAC and SAC air conditioners to receive bonuses, despite their efforts in selling any type being worthy of recognition Managers could easily motivate their teams by acknowledging all sales efforts and providing flexible rewards, but they chose to enforce rigid standards, disregarding the challenges faced by their salespeople.
Salespeople felt neglected by their managers, who showed little concern for their well-being, leading to feelings of exhaustion rather than challenge in their roles There was a lack of encouragement for taking vacations or breaks, leaving salespeople to navigate their workloads independently Additionally, their suggestions for improving incentive policies and adjusting product confirmation frequencies were often dismissed without consideration, reinforcing a culture where their opinions were undervalued.
Salespeople felt that their managers lacked an understanding of their needs and challenges, particularly regarding personal development opportunities that could enhance their skills and performance They expressed disappointment over the absence of training sessions and participation in sales conferences, which hindered their growth and potential This disconnect was exacerbated by managers' unavailability at key events, such as year-end parties, leading to a perceived gap between management and staff Consequently, building rapport with managers became difficult Furthermore, salespeople believed that managers prioritized their own commissions by focusing on team quotas, which resulted in disparities in individual sales performance and earnings at the end of each quarter.
32 find ways of selling more products to my other dealers to compensate the loss from these customers (Mr Long)
Salespeople felt that their managers failed to recognize their potential and celebrate their achievements, as performance evaluations relied solely on clear indicators set by management While they received appropriate payouts, commission alone was insufficient for them to feel truly valued They sought additional forms of recognition, such as Employee of the Quarter awards or celebratory dinners for those who exceeded sales quotas, which could foster motivation and teamwork However, top performers were often rewarded with preferential deals for their customers, creating an uneven playing field that hindered competition among salespeople Additionally, sales staff were not provided opportunities to explore new territories, limiting their potential and valuable experience in unfamiliar markets.
Problem importance
Unresolved issues can significantly impact job satisfaction, organizational commitment, turnover intention, and perceived organizational performance Job satisfaction reflects employees' overall emotional attitudes towards their work Affective commitment occurs when employees feel a strong attachment to their organization, integrating their role into their social identity Turnover intention indicates employees' behavioral inclination to leave their positions Additionally, perceived organizational performance encompasses employees' evaluations of the organization's success in areas such as profitability, employee retention, and customer satisfaction.
Electrolux Vietnam carries out a survey of employee satisfaction on an annual basis to determine how employees feel about their company’s leadership, general work environment, co- h
A survey of 33 workers revealed their insights on improving workplace conditions, utilizing a Likert scale from 1 (strongly dissatisfied) to 5 (strongly satisfied).
Figure 5: Employee satisfaction of salespeople at Electrolux Vietnam AC 2014-2018
Source: Annual survey of employee satisfaction at Electrolux Vietnam
In 2018, employee satisfaction in the sales department of Electrolux Vietnam AC saw a significant decline, following a slight decrease in 2017, as illustrated in Figure 5 The division aimed for an average satisfaction score of 3.9, yet the overall score remained at a neutral level of 3, indicating neither agreement nor disagreement among employees Consequently, employee satisfaction in 2018 fell noticeably below the targeted goal.
To enhance employee satisfaction and organizational commitment, the company must address ineffective managerial support Despite offering attractive benefits like free meals, gym access, and entertainment options, salespeople feel exploited due to a blurred line between work and personal life Interviews revealed that management neglects critical employee concerns, including stress, work-life imbalance, and insufficient training and development opportunities, leading to low job satisfaction.
Unresolved concerns diminished employees' emotional attachment to the company, leading to a lack of pride in their affiliation when discussing their roles with others Doubts about their future within the organization further contributed to this sentiment Additionally, the absence of managerial support during critical times negatively impacted their performance and morale.
Employees felt undervalued and at risk of being replaced at Electrolux, leading to frustration over their overwhelming workloads They concentrated solely on their assigned tasks, lacking the time or motivation to engage in additional responsibilities The team believed that meeting quotas was solely the managers' obligation, and they resented being asked to assist colleagues with their duties This disconnect fostered a lack of ownership and investment in the company, as their opinions were often overlooked in decision-making processes Consequently, when challenges arose, employees felt isolated and unsupported, negatively impacting their performance and morale.
Many salespeople expressed a desire to leave their jobs, often seeking new opportunities online or through personal networks, and receiving offers from competitors and headhunters This turnover intention was particularly evident among experienced sales staff, with one individual facing physical issues due to work-life imbalance, prompting thoughts of departure The loss of top employees poses a significant challenge, as their unique skill sets are difficult to replace, putting pressure on sales managers to find qualified candidates Conversely, a sales supervisor who had been with the company for about five years chose to remain despite receiving a more attractive offer from a competitor, reflecting loyalty amid the company's growth.
Ineffective managerial support has been shown to result in an unproductive and unmotivated workforce, negatively impacting organizational performance, profitability, customer satisfaction, and employee retention High turnover intention among salespeople has led to decreased employee retention, while customer dissatisfaction is evident from the significant number of complaints received and the low satisfaction scores for Electrolux salespeople, which stand at 6.4, compared to 7.28 for Toshiba and 8.02 for Daikin Additionally, the company has experienced a notable decline in sales growth over the past three years, hindering profitability According to internal reports, the company's profit has been adversely affected by these issues.
35 approximately from USD 2.5 to 3 million, which was lower than top management’s expectation to set a target of USD 5 million.
Cause validation
Literature review
To effectively identify the underlying causes of the central problem, a comprehensive literature review was conducted before initiating the third qualitative research This approach ensured that all potential causes were thoroughly considered and analyzed within the organizational context.
From the literature review, the causes of ineffective management support can be listed as following:
Fair rewards and recognition of employee performance are crucial for maintaining motivation and job satisfaction When employees perceive that their contributions are valued and rewarded fairly, they feel justified in the effort they invest in their roles This sense of fairness not only acknowledges their responsibilities but also compensates them for the stresses associated with their jobs, fostering a positive work environment.
Ineffective performance evaluations can hinder employees' perception of managerial support Regular and structured performance reviews provide a platform for employees to voice concerns and share their opinions, while allowing employers to assess each employee's progress against job descriptions and performance standards These evaluations not only enhance understanding of individual contributions to the organization but also foster a better alignment between employee capabilities and business goals, ultimately benefiting both the employees and the organization.
To maintain a competitive advantage, organizations must prioritize employee training and career development opportunities These initiatives demonstrate the organization's commitment to valuing its workforce and fostering their growth By focusing on enhancing employees' knowledge, skills, and attitudes, companies can effectively develop their competencies and drive overall success.
36 for their current jobs Secondly, it helps facilitate employees to growth by developing their future roles and responsibilities for their career advancement in the organization.
Qualitative research findings
To identify the underlying issues affecting the Electrolux Vietnam AC sales department, a qualitative research study involving in-depth interviews was conducted The methodology for this research is outlined in the supporting information section The analysis of interview responses revealed three primary causes of ineffective management support.
Salespeople expressed dissatisfaction with the lack of recognition and rewards for their performance, feeling undervalued despite quarterly evaluations that lacked constructive feedback This absence of acknowledgment extended to peer-to-peer recognition, hindering a supportive culture where employees could celebrate each other's successes Underperforming team members faced significant pressure without encouragement, diminishing overall morale Additionally, the absence of competitive sales incentive programs, such as those offered by competitors like Toshiba, further discouraged healthy competition The lack of mental breaks, like extra paid time off after sales seasons, prevented employees from re-energizing for future challenges Furthermore, the absence of formal certifications for achievements, such as "Employee of the Year," contributed to feelings of unfair treatment, especially when top performers received preferential discounts Consequently, the overall motivation diminished, as employees felt unrecognized and unrewarded for their efforts.
Ineffective performance evaluation in sales teams is characterized by unclear criteria and inadequate feedback, leading to discrepancies in how salespeople are assessed Many sales personnel share similar KPIs, despite varying levels of success, resulting in unequal commissions and frustration among those struggling with challenging sales channels The evaluation process often lacks meaningful dialogue, as managers typically present results without allowing employees to participate in discussions Quarterly evaluations are viewed as ineffective and time-consuming, with suggestions for a semi-annual review approach that fosters better communication Public criticism of low performers without offering support exacerbates feelings of pressure and anxiety, while the absence of a collaborative platform prevents open dialogue about challenges Consequently, salespeople perceive evaluations as unfair and inaccurate, diminishing their effectiveness as motivational tools.
Salespeople often face insufficient career development opportunities, as they are unaware of the requirements needed for promotion within their career path Management positions, such as sales supervisor and sales manager, typically require prior management experience, which leads to external candidates being favored over internal promotions This lack of upward mobility is further exacerbated by the outsourcing of lower-level sales positions, such as sales admin, which limits the chances for these employees to advance to official sales representative roles Additionally, managers are reluctant to hire more staff due to current headcount limitations, hindering growth opportunities for existing sales personnel.
A recent study revealed that 38 salespeople felt overwhelmed by their heavy workloads, which hindered their ability to seek promotions This lack of development plans led to dissatisfaction with both their managers and the company, as employees perceived no opportunities for advancement Consequently, ambitious sales professionals began to consider leaving the organization for better career prospects, viewing such moves as essential for their professional growth and stability.
Insufficient training opportunities at Electrolux led salespeople to feel unprepared for managerial roles, prompting thoughts of leaving for other fields or starting their own businesses Despite their previous experience, new hires were not adequately integrated into the company culture due to a lack of training Managers failed to recognize the critical need for effective communication and support, resulting in salespeople lacking essential product knowledge and sales techniques Consequently, this training gap caused missed sales targets and fostered feelings of undervaluation, ultimately diminishing motivation and loyalty among the sales team.
Ineffective managerial support at Electrolux Vietnam AC stems from three main causes that impact the sales force's development, retention, and long-term customer relationships Performance evaluation is a crucial tool for ensuring employees have the necessary skills, knowledge, and attitudes to meet business objectives When conducted effectively, performance evaluations yield valuable outcomes, such as aligning recognition and rewards with actual performance, identifying individual training needs, promoting deserving salespeople, and enhancing communication between sales teams and managers, ultimately leading to increased efficiency Conversely, improper performance evaluation processes can diminish job satisfaction and productivity, highlighting the importance of prioritizing effective evaluations in the organization.
To enhance the recognition of potential among sales managers and supervisors, it is crucial to address 39 priorities that will inform a more effective training and development plan The primary issue identified is the ineffective performance evaluation, which hinders managerial support Therefore, it is essential to develop targeted solutions that directly tackle this core problem to improve overall performance and support within the organization.
Figure 6: Final cause-effect map
Insufficient training and career development opportunities
Job satisfaction Organizational commitment Turnover intention Perceived organizational performance h
The set of solutions
Training sales manager and supervisor
Sales managers and supervisors often lack training in evaluating and providing feedback to their teams, as their promotions were based on prior experience rather than leadership skills This oversight leads to a focus solely on sales quotas, neglecting the essential role of coaching and development for salespeople To foster a more effective work environment, it is recommended that managers adopt transformational leadership styles, which emphasize active communication and valuing team contributions through involvement in decision-making Transformational leaders inspire their teams by clearly articulating organizational goals, serving as role models, and demonstrating individualized consideration by supporting professional development Additionally, they encourage intellectual stimulation, motivating employees to innovate and enhance problem-solving skills However, there remains a lack of clear criteria for evaluating effective leadership styles in this context.
Effective managerial skills are essential for managers, as they need to be proficient in listening, interacting, and motivating their sales teams Conducting a cost-benefit analysis is crucial to evaluate the total costs associated with this training approach against its potential benefits.
Effective training sessions equip managers with a clear understanding of their roles and responsibilities, enabling them to handle conflicts proactively They can accurately assess their team’s workloads, allocate tasks efficiently, provide timely feedback, and motivate their salespeople to excel Additionally, trained managers can identify the specific needs of their team members, offering the necessary tools and training for optimal performance By mastering assessment criteria, they enhance their evaluation skills, ensuring a fair and unbiased performance review process The total estimated cost for training sales managers and supervisors is VND 14,860,000, translating to a cost of VND 7,430,000 per trainee.
Table 4: Cost estimation for solution to training sales manager and supervisor
No of activity Description Estimated cost (VND)
1 Hiring the trainer in 7 days 12,000,000
2 Training documents, manuals and related materials 660,000
4 Incurred cost (equipment, electricity, transportation, etc.) 1,000,000
Developing the performance management system
An effective batter performance management system is built on two key elements: a comprehensive performance evaluation form that clearly outlines KPIs to prevent misunderstandings between sales managers and salespeople, and a two-way evaluation process that encourages feedback from both managers and sales staff This system should be integrated with ongoing reviews, rewards, recognition, and professional development opportunities By utilizing this performance management system, sales managers and salespeople can establish, document, and mutually agree upon clear guidelines and goals Regular performance reviews and consistent feedback ensure that salespeople are continually supported and aligned with these objectives.
Salespeople can improve their skills through a structured evaluation process that identifies areas for enhancement This evaluation relies on concrete evidence and well-founded arguments, allowing appraisers to understand the rationale behind performance outcomes By focusing on documented facts rather than personal opinions, the assessment ensures a fair and objective judgment of each salesperson's performance.
An updated performance management system offers clear advantages, including reduced bias from managers due to transparent evaluation criteria This clarity ensures that measurements and data are precise, providing a solid foundation for determining effective compensation packages that motivate and monitor sales performance Additionally, it serves as a reliable source of information for managers to assess their subordinates' performance, enabling them to guide employees in the right direction.
Effective communication is essential for managers to set sales goals, motivate skilled individuals, and develop performance plans that foster growth Utilizing internal HR data, the estimated cost for a comprehensive performance evaluation is VND 11,500,000.
Table 5: Cost estimation for solution to updating the performance management system
No of activity Description Estimated cost (VND)
Meetings between sales department and HR department to generate ideas and expectations about evaluation measures, KPIs
2 Create guideline and procedures on the new performance evaluation 6,000,000
A cost-benefit analysis is conducted to determine the best decision between two solutions based on estimated costs The findings reveal that an effective performance evaluation is more cost-efficient than training sales managers and supervisors To validate this solution, a brief survey is administered to salespeople and their supervisors Consequently, the results suggest that instead of merely updating the performance evaluation system, a combined approach should be implemented.
To effectively address the issue of ineffective performance appraisals, it is essential to integrate training for sales managers with the development of a new performance evaluation system This system's success hinges on the support and awareness of sales supervisors and managers, who must be equipped with the skills to recognize the importance of performance evaluations and accurately assess their sales teams A well-implemented performance evaluation system is perceived as fair, leading to positive reactions from both appraisers and appraises It establishes clear expectations for managers and employees while allowing salespeople to voice their opinions and expectations, ensuring mutual satisfaction The estimated overall cost for this combined solution is VND 26,360,000.
An effective performance evaluation system significantly enhances sales effectiveness, leading to increased customer satisfaction and higher sales volume for Electrolux Vietnam AC Satisfied dealers, who appreciate both the product and service, are more likely to foster long-term relationships with salespeople and the organization, resulting in repeat purchases and increased sales to their customers Financially, this could translate to a sales growth rate of at least 14.5% in the Vietnamese AC market, generating approximately USD 30 million in total revenue Management anticipates a profitability of USD 5 million, representing 17% of the organization’s sales revenue.
The training duration is typically estimated at 7 days, but it can be extended if desired, recognizing that altering the personalities and leadership styles of sales managers and supervisors requires time Investment in developing leadership skills is increasing, as there is no universal solution; adapting leadership styles demands sustained effort and a blend of formal and informal learning Additionally, creating an effective performance evaluation system for salespeople with varying goals can be both challenging and time-consuming, necessitating the involvement of relevant stakeholders at scheduled intervals.
Electrolux Vietnam's Air Conditioning sales department, consisting of 15 personnel, can effectively develop a new performance evaluation system without the need for external consultants Given their understanding of operations and requirements, collaboration between the HR team and the sales department manager will facilitate the creation of this tailored evaluation process, ensuring greater commitment and involvement from the sales team.
An effective performance management system serves as a foundation for supervisors to make informed decisions regarding base pay, promotions, and employee retention It facilitates the development of corrective plans for addressing deficiencies while reinforcing positive performance Employees are encouraged to reassess their career trajectories based on their strengths and weaknesses Additionally, performance evaluations help supervisors identify training and development needs, bridging gaps between current and expected performance Implementing a new performance evaluation system is cost-effective and positively impacts the long-term performance of the Air Conditioning sales department, making it a valuable initiative for management to pursue.
The action plan for creating a performance management system consists of three key components: performance evaluation, competency evaluation, and effective feedback guidance An appraisal form will be developed to enhance these evaluations Additionally, key performance indicators (KPIs) will be aligned with recognition and rewards, ensuring that salespeople receive the necessary outcomes to stay focused on their goals and maintain optimal performance.
5.4.2.1 Development of an appraisal form
Performance evaluation, comprising 60% of the overall performance management framework, relies on Key Performance Indicator (KPI) achievement to assess individual and departmental business objectives However, the existing KPI, detailed in the Appendix, is overly simplistic and fails to accurately reflect performance outcomes.
To optimize sales performance, it's crucial for new salespeople to align with key performance indicators (KPIs) that reflect corporate strategy goals Effective goals should adhere to the SMART criteria: they must be Specific, Measurable, Attainable, Relevant, and Timely Electrolux's performance evaluation form outlines six criteria designed to boost sales, profitability, and consumer satisfaction, ultimately enhancing productivity for both the organization and its sales team The final sales incentive score is calculated by dividing actual performance by target performance, then multiplying the result by a weight, providing a clear percentage that reflects the salesperson's achievement level.
60 percent to 70 percent will get a bonus of 1.5 months’ salary up to 2.7 months’ salary for maximum 120 percent
1 AC Group Sell In: This objective focuses on each of the team’s contribution to AC division’s sales revenues The channel team and supermarket team should have different requirements due to different workloads and different weights of accounts
2 Individual Sell In RAC + RAC/ SAC: This objective should differentiate between two teams in such a way of selling two types of air conditioners, RAC and SAC that the channel team is required to achieve minimum 60 percent of selling RAC to be able to plus on top whilst the supermarket team is tied to double conditions of minimum 60 percent of selling both RAC and SAC Moreover, sales seasons are divided into 4 quarters per year, so sales targets can be different in some quarters which are regarded to be peak seasons that create higher chances to increase sales volumes
Change plan design
An effective performance management system equips supervisors to make informed decisions regarding base pay, promotions, and employee retention It facilitates the development of corrective plans for subordinates while reinforcing their strengths Employees can reassess their career trajectories based on their strengths and weaknesses, and supervisors can identify training and development needs through performance evaluations This system helps pinpoint performance gaps and formulate necessary remedial actions Implementing a new performance evaluation is cost-effective and positively impacts the long-term performance of the air conditioning sales department, making it a valuable initiative for management.
The action plan for creating an effective performance management system consists of three key components: performance evaluation, competency evaluation, and the development of an improved appraisal form This plan emphasizes the importance of delivering constructive performance feedback Additionally, it is crucial to align Key Performance Indicators (KPIs) with recognition and rewards, ensuring that salespeople receive the necessary outcomes to stay focused on their goals and maintain optimal performance.
5.4.2.1 Development of an appraisal form
Performance evaluation, constituting 60% of the overall performance management system, relies on Key Performance Indicators (KPIs) to assess individual and departmental business objectives However, the existing KPIs, detailed in the Appendix, are overly simplistic and fail to accurately capture the true performance metrics necessary for effective evaluation.
To enhance the performance of salespeople, it is essential to establish KPIs that align individual goals with corporate strategy Effective goals should adhere to the SMART criteria: they must be specific, measurable, attainable, relevant, and timely, ensuring clarity in desired outcomes and deadlines Electrolux's performance evaluation form outlines six criteria aimed at boosting sales, profitability, and consumer satisfaction while improving productivity for both the organization and its salespeople The final score, representing the level of sales incentives, is calculated by dividing actual performance by target achievement after a threshold and cap, then multiplying this result by a weight factor.
60 percent to 70 percent will get a bonus of 1.5 months’ salary up to 2.7 months’ salary for maximum 120 percent
1 AC Group Sell In: This objective focuses on each of the team’s contribution to AC division’s sales revenues The channel team and supermarket team should have different requirements due to different workloads and different weights of accounts
2 Individual Sell In RAC + RAC/ SAC: This objective should differentiate between two teams in such a way of selling two types of air conditioners, RAC and SAC that the channel team is required to achieve minimum 60 percent of selling RAC to be able to plus on top whilst the supermarket team is tied to double conditions of minimum 60 percent of selling both RAC and SAC Moreover, sales seasons are divided into 4 quarters per year, so sales targets can be different in some quarters which are regarded to be peak seasons that create higher chances to increase sales volumes
3 AC Profit: As shared by sales supervisor, the strategy of Electrolux Vietnam has a tendency to change from a focus on profit earning to market expansion, so their priority also changes in such a way that profitability is not important enough to be in the top KPI in the following quarters
To successfully implement the growth strategy, salespeople at Electrolux Vietnam must focus on strengthening relationships with existing customers This approach is essential for retaining loyal customers who will uphold and promote the company's reputation.
The significance of this objective for the long-term development of Electrolux Vietnam is clear To enhance efficiency, salespeople are required to submit customer visit reports for the second half of the year, detailing the meeting date, customer identity, discussion content, and meeting purpose, while omitting the first half of the year This streamlined process allows sales staff to better manage their time and organize their work effectively.
4 Partner Recruitment: It is the client acquisition rates to measure how many new prospects salespeople reach out are converted into customers It is therefore necessary for them to contribute to the expansion of the business in their given territory The previous requirement of 5 added accounts is considered to be unrealistic since none of salespeople could achieve maximum and some of them did not regard this objective as important when they perceived that it could be out of their reach Therefore, the number of increasing new clients should be adjusted to be attainable and challenging enough to motivate salespeople to focus on achieving this objective
5 Business Opportunity Creation: It reflects the value of the project rather than its quantity This objective emphasizes on the opportunity that can be created, so even though salespeople cannot gain any sales from this project, the valuable information about the project regarding name of the project, level of the project, place, installer, investors, products to be used, etc which are recorded are counted in KPI The ability of salespeople to capture information quickly is highly appreciated
6 Business Opportunity Win Rate: The formula for this measure is calculated by letting sales divided by total number of business opportunity alive in the quarter The denominator is business opportunity alive which includes the total number of opportunities are missed until close date since some unexpected circumstances such as delayed construction due to government regulation or customers’ side, not yet decided, etc and opportunities are dropped since this opportunity was met in the previous quarter, sooner than the plan
Competency evaluation, which constitutes 40% of performance management, assesses the ability to successfully and efficiently contribute to organizational development To effectively evaluate salespeople's job performance, it is essential to implement objective measures.
To effectively communicate objectives and assess sales performance, organizations can utilize 48 performance measures that highlight varying levels of effectiveness, aiding management in justifying evaluations Implementing a standardized scale allows for consistent measurement of employee performance against expectations, enhancing fairness in assessments Clearly defined rating points enable raters to apply evaluations uniformly, while numerical scales facilitate the aggregation of scores for informed decision-making, bolstering the reliability and validity of appraisals A comprehensive evaluation of salespeople’s core competencies should involve both self-assessments and supervisor evaluations, with the average competency score weighted at 40 percent to derive a final score Following a global performance management system, the performance measures are effectively illustrated using a 1-5 rating scale, as demonstrated by Electrolux.
Among 4 core competencies (response time, productivity, teamwork, and product knowledge) which are considered to be crucial to the success of sales job, to avoid the subjectivity, salespeople should join in a specific test regarding product knowledge so that their current knowledge about Electrolux air conditioners is clearly assessed that their achievement of a certain score can inform manager and supervisor about the necessity of urgent training Because product knowledge is not just general in air conditioning industry but also specific about only Electrolux products, the HR team, sales supervisor and manager are experienced enough to joint together to pick out most important questions, not the most difficult ones, to classify each salesperson’s knowledge and to make a comparison with their sales capability to have a final approval of performance evaluation Moreover, teamwork shows the collaborative spirit that should be quantified by how many projects are completed requires the support and cooperation of people from the same department or other departments to accomplish the highest potential outcome for a task, knowing that these projects can be orientation days for new partners, support h
49 for product displays at their stores, side visit in introduce installers about buildings into which Electrolux air conditioners are successfully installed, etc
5.4.2.2 Guideline for effective performance feedback