MOTIVATION
• Motivation is derived from a Latin word
“Movere” meaning “To Move”.
• Motivation is the effort the salesperson
makes to complete the various activities of the
job.
• Includes three dimensions: Intensity,
Persistence & Direction.
Dimensions of Motivation
• Intensity refers to the amount of physical and
mental effort the salesperson spends on the
given task.
• Persistence describes how long the
salesperson continues to put forth the effort.
• Direction suggests the salesperson choice of
direction of effort among various tasks.
IMPORTANCE
Sales Managers find the task of motivating
salespeople difficult and important due to the
following factors:
Changes in marketing environment
(Demographic, economic, technological, politicallegal,
social-cultural)
Conflicting company objectives (Profit aspects)
Unique nature of sales job (Odd hours of
working, bad mannered customers)
Separate motivational package (Based on
individual salesperson needs).
Relevance of Motivational Theories
• Maslow’s hierarchy of needs theory (Refer
text)
• Hertzberg’s dual factor theory
• Expectancy theory.
HERTZBERG’S DUAL FACTOR THEORY
• Sources of Dissatisfaction and Satisfaction are
grouped in 2 groups:
– Hygiene factors
– Motivation factors.
HERTZBERG’S DUAL FACTOR THEORY
• Hygiene factors include working condition,
security, supervision, interpersonal relationship,
salary & company policy. They deal with the
condition of work and not the work itself.
• Absence of hygiene factors may cause
dissatisfaction but presence of these factors may
bring up motivation to a theoretical zero level,
but would not result in positive motivation.
HERTZBERG’S DUAL FACTOR THEORY
• Motivation factors include: Recognition,
Responsibility, Achievement, Challenges,
Opportunities for growth and Interest value of
work
• These factors are a part of work
• Pay can be both hygiene and motivational.
• Salary is included in hygiene factor, whereas commissions/incentives are
related to performance – directly relating to sales achievement; therefore
Motivational factor.
Expectancy Theory
• Expectancy: Refers to persons perception of
the relationship between effort and
performance.
• Instrumentality: Refers to the persons
perception of the relationship between
performance and reward
• Valence: Is the value placed on a particular
reward by a salesperson.
Motivational Tools
• For designing an effective motivational mix,
the sales manager should know each
salesperson and understand his/her specific
needs.
• The Motivational package which consists of
various motivational tools / methods should
have some components that fit every
individual salespersons needs.
Motivational Methods – Types
Financial Rewards
• Financial Compensation plan:
– Salary
– Commission
– Bonus payments
– Fringe benefits
– Combination
• Sales Contests.
Motivational Methods – Types
Non Financial Rewards:
• Promotion
• Sense of accomplishment
• Personal growth opportunities
• Recognition
• Job security
• Sales meeting and conventions
• Sales training programmes
• Job enrichment
• Supervision.
Guidelines For Motivating Salespeople
• Difference between “Can’t do” & “Won’t do”
– Sales performance depends on ability and
motivation i.e. efforts.
• Include individual needs into motivational
programmes
– To design different tailor made motivational
programmes for each salespeople. Segmenting of
salespeople based on their needs will help them
to design the motivational programme.
Guidelines For Motivating Salespeople
• Pleateaued salespeople
– Pleateaued salespeople are usually around 40 – 50
years of age who almost stopped improving and
developing, following a period of progress.
– The main reasons for pleateauing is less chances of
promotion, perceptions of unfair treatment, burnout,
boredom and satisfaction with income.
– Overcome by setting performance standards,
training/coaching new salesperson, developing new
territory, market survey of products and collecting
competitive information
Guidelines For Motivating Salespeople
• Proactive approach
– A Sales manager should control potential
problems in motivation by identifying and
removing them.
– Can be done by regular communication, praising
good performance, including suitable recognition
programmes and discussing less expected
performance in a constructive manner.
COMPENSATING THE SALESFORCE
• Financial Compensation:
– Direct payment of money such as salary,
commission and bonus
– Indirect payment: Fringe benefits, retirement
plans, medical reimbursements, LTA and various
insurance plans.
COMPENSATING THE SALESFORCE
• Non Financial Compensation:
–
Basic types of Compensation Plans
• Straight salary
• Straight commission
• Combination of Salary, commission and/or
bonus.
Straight-Salary Plan
• It’s a direct monetary reward paid for carrying
out certain duties over a period of time.
• It is related to unit of time and NOT unit of
work.
• Suited to Sales trainees, Missionary sales
activities, a company which introduces a new
product.
Straight-Commission Plan
• Represents strong financial incentives, in order to
ensure superior performance.
• Factors to be decided:
– Commission base: Base on which the salespersons
performance is measured and commission will be paid.
The most popular commission base is sales volume
– Commission rate: Rate to be paid per unit, usually
expressed as a percentage of sales or gross profit.
– Commission start: The starting point for the commission
payment, after selling the first unit or after reaching sales
quota
– Commission payout: The time when the commissions are
paid. Many companies pay after the customer is billed and
payment is received.
Straight-Commission Plan
• Situations where Straight Commission plan is
followed:
– Real estate and insurance
– Direct sales industry eg. Tupperware, Amway,
Avon
– Wholesalers who have limited working capital
who pay their salespeople by commission.
Combination Plan: Types
• Salary + commission
• Salary + bonus
• Salary + commission + Bonus
• Commission + Bonus.
EVALUATING THE PERFORMANCE
OF SALESPEOPLE.
Evaluating the Performance of
Salespeople - Purpose
The basic objective of the performance evaluation of salespeople is
to determine how these salespersons have performed.
Improve performance by identifying the causes of
unsatisfactory performance
To decide the increment in pay and incentive payment based
on the actual performance of the salesperson
To identify the salesperson who may be promoted
To determine the training needs of the individual and entire
sales force
To identify the sales person whose services may be
terminated, after giving adequate chances for improvement
To motivate salespeople through adequate recognition and
reward for good performance
To find out strengths and weakness.
Salesforce Performance Evaluation and Control Procedure
Step 1
• Set policies on performance evaluation and control
Step 2
• Decide the bases of salespeople’s performance and evaluation
Step 3
• Establish performance standards
Step 4
• Compare actual performance with Standards
Step 5
• Review performance evaluation with Salespersons
Step 6
• Decide sales management actions and control.
Setting policies on performance evaluation and control
• Frequency of evaluation
• Who conducts the evaluation?
• Management by Objectives (MBO)
• Sources of Information
• 360 degree feedback.
Deciding the bases of evaluation
• Outcome/result based viewpoint
• Behaviour/activity/effort based viewpoint
• Both, outcome based and behaviour based.
Review performance evaluation with
Salespeople
• First the performance criteria or bases should be
discussed
• The salesperson should be asked to review
his/her own performance
• The sales manager then presents his view on the
review performance
• Mutual agreement on the performance must be
established
• If disagreements or serious differences of opinion
occurs then the sales manager should carefully
explain the reasons to the salesperson.
