Most of these multi-criteria decision-making methods are normative, assuming that the decision maker is rational and possesses unlimited cognitive capacity to handle the problem defined using various criteria and alternatives. Also, most of these methods are linear rather than configural (i.e., non-linear and non-compensatory), thereby oversimplifying the complex real-world phenomenon. As a result, the decisions prescribed by such methods often do not resemble the actual decisions. This paper attempts to address this gap by applying the MAGL method in the context of salespeople’s performance evaluation.
A hypothetical salespeople performance evaluation problem is designed in which salespeople are profiled on various criteria. Responses were collected from 90 sales and marketing managers from several industries using the preference elicitation procedure of the multi-attribute gain loss (MAGL) method. The managers were also requested to provide a rank order of the same salespeople without using any multi-criteria decision-making method. The direct rank order of salespeople a manager provides is compared with the rank order prescribed by the MAGL (linear and non-linear versions) method for the same manager.
While the prescriptions of the MAGL non-linear method are well-suited for decisions related to promotion and transfer, the prescriptions of the MAGL linear method can be used for individual assessment. This makes the MAGL method useful for managers doing performance evaluations and appraisals of salespeople and other individuals within an organization. The study supports the notion that managers use a frame of reference when evaluating individuals for performance appraisal.
MAGL is a simple and structured method to deal with salespeople’s performance evaluation and appraisal. The novel preference elicitation procedure and context-dependent aggregation used in the MAGL non-linear method resembles the actual choice behavior of managers, where the overall score of a salesperson is computed relative to all the other salespeople in a multi-criterion space.
While individual performance evaluations are useful for determining individual training needs and rewards, relative performance evaluations are useful for decisions involving promotion, transfer and sometimes termination. The MAGL method is less complex in terms of the number of preferences required to be defined by the decision-maker while evaluating salespeople on various criteria (subjective or objective). The decisions prescribed by the MAGL method closely resemble the actual decisions due to a more effective preference elicitation procedure and their aggregation in accordance with the cognitive realities of decision-making.
Salespeople’s performance evaluation is a multi-criteria decision problem, and various multi-criteria decision-making methods were proposed in the literature to help managers undertake performance evaluations of individual salespersons. Limited attempts were made to evaluate the relative performance of a salesperson with respect to the entire salesforce in a multi-dimensional space. Further, very few studies in the literature attempted to verify the resemblance between prescriptions of multi-criteria decision-making methods and the actual decisions made by managers. This research proposes the application of a novel multi-criteria decision-making method named MAGL to effectively deal with the salespeople’s performance evaluation and appraisal.
