2. Motivation
The force within us that activates our behavior.
It is a function of three distinct components,
Intensity, Direction, and Persistence.
Intensity PersistenceDirection
Motivation
3. Motivation - Intensity
Intensity refers to the amount of mental and
physical effort put forth by the salesperson.
PersistenceDirection
Motivation
Intensity
4. Motivation - Direction
The extent to which an individual determines
and chooses efforts focused on a particular
goal.
Intensity PersistenceDirection
Motivation
5. Motivation - Persistence
The extent to which the goal-directed effort is
put forth over time.
Intensity PersistenceDirection
Motivation
6. Motivation: Intrinsic vs.
Extrinsic
When doing
the job is
inherently
motivating
Intrinsic Extrinsic
When rewards
such as pay
and formal
recognition act
as motivators
Motivation
7. Two Basic Categories of Rewards
Compensation Rewards:
Those given in return for acceptable
performance or effort.
Non-Compensation Rewards:
Those beneficial factors related to the work
situation and well-being of each salesperson.
8. Optimal Sales Force Reward
System
1. Provides an acceptable ratio of costs and sales force output
in volume, profit, or other objectives
2. Encourages specific activities consistent with the firm's
overall, marketing, and sales force objectives and strategies
3. Attracts and retains competent salespeople, thereby
enhancing long-term customer relationships
4. Allows the kind of adjustments that facilitate administration
of the reward system.
9. Types of Sales Force Rewards
Intrinsic Extrinsic
Motivation
Pay
Promotion
Sense of
Accomplishment
Personal Growth
Opportunities
RecognitionJob security
10. Financial Compensation:
Straight Salary
Advantages
- Salaries are simple to administer
- Planned earnings are easy to project.
- Salaries can provide control over salespeople’s activities,
and reassignments are less of a problem.
- Salaries are useful when substantial development work
is required.
Disadvantages
- Salaries offer little incentive for better performance.
- Salary compression could cause perceptions of inequity
among experienced salespeople.
- Salaries represent fixed overhead.
11. Financial Compensation:
Straight Commission
Advantages
- Income is linked directly to desired results.
- Straight commission plans offer cost-control benefits.
Disadvantages
- Straight commission plans contribute little to company
loyalty.
- Problems may also arise if commissions are not limited
by an earnings cap.
12. Straight Commission: Plan
Variations
1. Commission base — volume or profitability
2. Commission rate — constant, progressive, or a
combination
3. Commission splits — between two or more
salespeople or between salespeople and the
employer
4. Commission payout event — when the order is
confirmed, shipped, billed, paid for, or some
combination of these events
13. Straight Commission: Rates
Constant rates:
– Rates that remain unchanged over the pay period. Pay is
linked directly to performance.
Progressive rates:
– Rates that increase as salespeople reach pre-specified
targets.
Regressive rates:
– Rates that decline at some predetermined point.
14. Financial Compensation:
Performance Bonuses
Advantages
- Organization can direct emphasis to what it considers
important in the sales area.
- Bonuses are particularly useful for tying rewards to
accomplishment of objectives.
Disadvantages
- It may be difficult to determine a formula for calculating
bonus achievement if the objective is expressed in
subjective terms.
- If salespeople do not fully support the established
objective, they may not exert additional effort to
accomplish the goal.
15. Financial Compensation:
Combination Plans
Advantages
- Combination pay plans are flexible.
- They are also useful when the skill levels of the
salesforce vary.
- Combination pay plans are attractive to high-potential
but unproven candidates for sales jobs.
Disadvantages
- Combination pay plans are more complex and difficult to
administer.
- A common criticism of combination pay plans is that
they tend to produce too many salesforce objectives.
16. Nonfinancial Compensation
Opportunity for Promotion:
– The ability to move up in an organization along one or more
career paths
Sense of Accomplishment:
– The internal sense of satisfaction from successful
performance
– Sales managers should facilitate salespeople’s ability to feel
this a sense of accomplishment
17. Nonfinancial Compensation
Opportunity for Personal Growth:
– Access to programs that allow for personal development
(e.g., tuition reimbursement, leadership development
seminars)
Recognition:
– The informal or formal acknowledgement of a desired
accomplishment
Job Security:
– A sense of being a desired employee that comes from
consistent exceptional performance
18. Sales Expenses
1. A definition of which expenses are reimbursable
2. The establishment of expense budgets
3. The use of allowances for certain expenditures
4. Documentation of expenses to be reimbursed
Controls used in the sales expense
reimbursement process include:
19. Additional Issues in Managing
Salesforce Reward Systems
• Sales Contests
• Equal Pay
• Team Compensation
• Global Considerations
• Changing the Reward System
20. Sales Contests:
Recommended Guidelines
1. Minimize potential motivation and morale
problems by allowing multiple winners.
Salespeople should compete against individual
goals and be declared winners if those goals are
met.
2. Recognize that contests will concentrate efforts
in specific areas, often at the temporary neglect
of other areas. Plan accordingly.
21. Sales Contests:
Recommended Guidelines
3. Consider the positive effects of including
nonselling personnel in sales contests.
4. Use variety as a basic element of sales contests.
Vary timing, duration, themes, and rewards.
5. Ensure that sales contest objectives are clear,
realistically attainable, and quantifiable to allow
performance assessment.
22. DOs of Global Compensation
• Do involve reps from key countries
• Do allow local managers to decide the mix
between base and incentive pay
• Do use consistent performance measures
(results paid for) and emphasis on each
measure
• Do allow local countries flexibility and
implementation
• Do use consistent and indication and training
themes worldwide
23. DON’Ts of Global Compensation
• Don’t plan centrally and then dictate to local
countries
• Don’t create a similar framework for jobs with
different responsibilities
• Don’t require consistency on every performance
measure within the incentive plan
• Don’t assume cultural differences can be
managed through the incentive plan
• Don’t perceive without the support of senior
sales executives worldwide
24. Guidelines for Motivating and
Rewarding Salespeople
1. Recruit and select salespeople whose personal motives
match the requirements and rewards of the job.
2. Attempt to incorporate the individual needs of
salespeople into motivational programs.
3. Use job design and redesign as motivational tools
25. Guidelines for Motivating and
Rewarding Salespeople
4. Provide adequate job information and assure proper
skill development for the sales force.
5. Concentrate on building the self-esteem of
salespeople.
6. Take a proactive approach to seeking out
motivational problems and sources of frustration in
the salesforce.
