Current Goal Setting – Not the correct way
Currently, all Agents set their Goals based on the Results. These goals are in the form of No of Lives to be done OR Amount of Annualised Premium/ FPI to be collected and this can be called as the Results based Goal setting.
This is not the correct way of setting goals. Why? Learn below:
Concept of the Flour Mill
There are two things in the Flour Mill
The Input – which is Wheat.
The Output – which is Flour.
Similarly, there are two things in our Business.
The Input – The Controllable Part which is the Activity (Face to face meeting with Prospects)
The Output – The Uncontrollable Part which is, the Lives and the FPI
Let us enumerate the same as follows
| The Input | Activity – Face to Face meetings | Within our control |
| The Output | Business Results – FPI and No of Lives | Not in our Control |
Predictable Success
To help us to make success predictable we will have to know the co-relation between the Input and the Output. The co-relation is a ratio and has to be calculated by each advisor or by the Agency Manager for each of his advisors as this co-relation is unknown to most insurance salesmen and managers.
THE MISSING LINK
We do not know the relationship between INPUT and OUTPUT which is a Ratio and which is called a constant In Mathematics
The formula would therefore be
A x m.B = 0
Where A is the number of face to face meetings Activity (Input) and B is the Commission that you want to earn in the year which is the Output and m is the constant which will remain same for that agent for at least a year.
THE FORMULA FOR SUCCESS IS
- Capability X Effort
- KASH X Face to Face Meetings
- Knowledge
- Attitude
- Skills
- Habits
Let us take an example. Assuming that an agent has kept proper records of his sales and commission received and we have calculated his Visiting fees then we can calculate as follows
If the Visiting fees are Rs.1500/- and if No of meetings done is 400 then commission earned would be
Capability X Effort
1500 X 400 = 6 Lakhs
Commission earned would be 6 Lakhs
If Visiting fees are Rs.1500/- and if No of meetings done is 600 then commission earned would be
Capability X Effort
1500 X 600 = 9 Lakhs
Commission earned would be 9 Lakhs
If Visiting fees is Rs. 2000/- and if No of meetings done is 600 then commission earned would be
Capability X Effort
2000 X 600 = 12 Lakhs
Commission earned would be 12 Lakhs
The Goals are
- Specific
- Measurable
- Achievable
- Romantic
- Time Bound
There was no way to validate if the Goals are achievable but with this method, Goals can be validated.
Performance Management Process
- Workshops and interventions to change mindset, upgrade skills and improve knowledge
- Input based Goal setting
- Record keeping of Activity
- Weekly Monitoring
- Monthly Analysis