Creating a performance contract for the sales team at Lovely Locks is crucial for aligning individual performance with the broader business goals outlined in the Balanced Scorecard (BSC). Below is a detailed breakdown of Key Result Areas (KRA), personal objectives, measures, and targets for each BSC perspective.
Financial Perspective
Business Objective: Increase overall revenue and profitability.
KRA: Sales Revenue Generation
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Personal Objective: Achieve monthly sales targets.
- Measure: Total sales revenue generated per month.
- Target: $50,000 in sales per month.
KRA: Cost Management
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Personal Objective: Reduce customer acquisition cost (CAC).
- Measure: Customer acquisition cost over each quarter.
- Target: Reduce CAC by 10% within the next quarter.
Customer Perspective
Business Objective: Enhance customer satisfaction and loyalty.
KRA: Customer Engagement
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Personal Objective: Improve customer retention rate.
- Measure: Percentage of customers retained after one year.
- Target: 85% retention rate within the fiscal year.
KRA: Customer Satisfaction
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Personal Objective: Achieve high customer satisfaction scores.
- Measure: Net Promoter Score (NPS) survey results.
- Target: NPS score of 60 or higher by the end of the year.
Internal Business Processes Perspective
Business Objective: Streamline sales processes and improve efficiency.
KRA: Sales Process Optimization
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Personal Objective: Reduce the sales cycle time.
- Measure: Average length of time to close a deal.
- Target: Decrease average sales cycle from 45 days to 30 days.
KRA: Reporting Accuracy
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Personal Objective: Maintain high accuracy in sales reporting.
- Measure: Percentage of sales reports without discrepancies.
- Target: 100% accuracy in reporting for the year.
Learning and Growth Perspective
Business Objective: Foster a culture of continuous improvement and development.
KRA: Skill Development
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Personal Objective: Participate in sales training programs.
- Measure: Number of training hours completed per quarter.
- Target: Complete at least 15 hours of training per quarter.
KRA: Employee Engagement
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Personal Objective: Contribute ideas for improving team performance.
- Measure: Number of actionable ideas submitted and implemented.
- Target: Propose at least 3 ideas per quarter that lead to measurable improvements.
Summary Table
| BSC Perspective | Business Objective | KRA | Personal Objective | Measure | Target | |------------------------------|-----------------------------------------------|---------------------------------|-------------------------------------------|-------------------------------------------|------------------------------------| | Financial | Increase overall revenue and profitability | Sales Revenue Generation | Achieve monthly sales targets | Total sales revenue generated per month | $50,000 in sales per month | | | | Cost Management | Reduce customer acquisition cost (CAC) | Customer acquisition cost | Reduce CAC by 10% in next quarter | | Customer | Enhance customer satisfaction and loyalty | Customer Engagement | Improve customer retention rate | Percentage of customers retained | 85% retention rate in fiscal year | | | | Customer Satisfaction | Achieve high customer satisfaction scores | Net Promoter Score (NPS) | NPS score of 60 or higher | | Internal Business Processes | Streamline sales processes and improve efficiency| Sales Process Optimization | Reduce the sales cycle time | Average length of sales cycle | 30 days | | | | Reporting Accuracy | Maintain high accuracy in sales reporting | Percentage of sales reports without errors | 100% accuracy in reporting | | Learning and Growth | Foster a culture of continuous improvement and development| Skill Development | Participate in sales training programs | Number of training hours | 15 hours of training per quarter | | | | Employee Engagement | Contribute ideas for improving performance | Number of actionable ideas submitted | 3 ideas per quarter |
This performance contract establishes clear expectations for individual performance within the sales team, directly linking their objectives and measures to the company’s broader strategic goals as defined by the Balanced Scorecard.