7 Salesperson Performance: Motivating the Sales Force McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

7 Salesperson Performance: Motivating the Sales Force

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

7-2

Salesperson Motivators

Source: HR Chally Group (2007).

Novel situations Opportunities to meet

people Participative style Depth of required expertise Minimal configuration Sharing expertise

7-3

Understand motivation process Discuss effect of personal

characteristics on salesperson motivation

Understand how individual’s career stage influences motivation

Discuss effect of environmental factors on motivation

Discuss effect of factors inside company on motivation

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Psychological Process of Motivation

Individual’s choice to: Initiate action on a task Expend a certain amount of

effort on that task Persist in expending effort

over time Expectancy theory

7.1

The psychological determinants of motivation

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7-6

Bases for Motivation

Expectancies – perceived linkages between more effort and improved performance

Instrumentalities – perceived relationship between improved performance and increased rewards

Valence for rewards – perceived intrinsic value of the rewards

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Expectancies

Salesperson’s perceived link between job effort and performance

Estimated probability that increased effort leads to improved performance

Accuracy of expectancy estimates how clearly salesperson understands relationship between effort and achievement

Magnitude of expectancies – perception of ability to control required performance

7-8

Instrumentalities

Link job performance and available rewards

Estimate of likelihood an improvement in performance will lead to a specific reward

Accuracy of Instrumentalities - perceptual clarity of understanding relationship between improvement, achievement and available rewards

Magnitude of instrumentality - the perceptual understanding that the salesperson can control or influence his or her own job performance

7-9

Valences for Rewards

Perceptions of desirability of receiving increased rewards through improved performance

Other rewards may equal or exceed the value of increased financial compensation

The kinds of rewards deemed most effective for motivation varies per individual

Satisfaction with current rewards depends upon perceived value

Model Predicts Performance?

Model predicts motivation Motivation only one

determinant of performance Motivation may explain 40% of

performance level How is motivation affected by

Personal characteristics? Environmental conditions? Policies and procedures?

The psychological determinants of motivation

7-10

7-11

Personal Characteristics Affecting Motivation

Satisfaction with current rewards

Demographic variables Job experience Psychological variables

Personality traits Attribution of meaning to

performance

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Satisfaction

Workers dissatisfied with rewards value lower-order rewards

High-order rewards valued more highly after lower-order needs have been satisfied

Salespeople satisfied with their current income (a lower-order reward) assign lower valences to earning more pay

7-13

Demographic Characteristics

Older, more experienced salespeople obtain higher levels of low-order rewards

Satisfaction with current level of lower-order rewards influenced by responsibilities to be satisfied

More formal education increases desire for higher-order rewards

7-14

Job Experience

More experience provides Clearer idea of how effort affects

performance Understanding of how superiors

evaluate performance Understanding of how certain

performance leads to rewards Magnitude of expectancy

perceptions relates to experience

7-15

Psychological Traits

Affect motivation Traits

High achievement need Internal locus of control Verbal intelligence General self-esteem Task-specific self-esteem

7-16

Career Stages and Motivation

Exploration – lack of assurance Establishment – selection of

selling as an occupation and desire for career success.

Maintenance – seeking to retain present position, high status, and achievement

Disengagement – preparation for retirement and possible loss of self-identity

7-17

Career Stages and Motivation

Exploration – lack of assurance Establishment – selection of

selling as an occupation and desire for career success

Maintenance – seeking to retain present position, high status, and achievement

Disengagement – preparation for retirement and possible loss of self-identity

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Plateauing

Early disengagement Causes

Lack of a clear career path Boredom Failure to manage the person

effectively Solutions

Clearly defined career path Promotions within sales force Job environment

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Solutions for the Plateaued Salesperson

Talk with salesperson about problem Discuss reasons and possible

solutions Conduct motivations sessions Manage, lead and communicate Cut salesperson’s responsibilities Assign to a new territory Inform rep on his/her responsibilities Provide time off

7-20

Environment and Motivation

Territory potential and strength of competition impact performance, perceptions, and motivation

Understanding how and why salespeople perform differently under varying environmental circumstances guides compensation and management policies

7-21

Incentive and Compensation Policies

Policies concerning higher-order rewards can influence desirability of such rewards

Preferential treatment for “stars” may reduce morale

The range of financial rewards may influence valences of additional financial rewards

Earnings opportunity ratio Total financial compensation of the

highest paid salesperson compared to that of the average in a sales force

Higher ratio = higher valence