Chapter 7

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Chapter 7

Salesperson Performance: Motivating the Sales Force

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Learning Objectives

• Understand the process of motivation• Discuss the effect of personal characteristics on salesperson

motivation• Understand how an individual’s career stage influences motivation

• Discuss the effect of environmental factors on motivations• Discuss the effect of factors inside the company on motivation

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Key Terms

• motivation• expectancies

– accuracy of expectancy estimates– magnitude of expectancy

estimates• instrumentalities

– accuracy of instrumentality estimates

– magnitude of instrumentality estimates

• valences for rewards

• performance attributions– stable– unstable– internal– external

• career stages– exploration– establishment– maintenance– disengagement

• plateauing• earnings opportunity ratio

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Key Terms

• Motivation (pg. 225)

– It is the amount of effort the salesperson desires to expend on each activity or task associated with the job. It can be further defined as an individual’s choice to (1) initiate action on a certain task, (2) expend a certain amount of effort on that task, and (3) persist in expending effort over a period of time.

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Expectancies (pg. 226)

– Perceived linkages between expending more effort on a particular task and achieving improved performance.

– Accuracy of expectancy estimates (pg. 227)• The degree to which the salesperson clearly understands the relationship

between effort expended on a task and the resulting achievement on some performance dimension.

– Magnitude of expectancy estimates (pg. 228)• The degree to which the expectancy estimates of the salesperson reflect the

rep’s perceptions of his or her ability or influence his or her own job perceptions.

•

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Instrumentalities (pg. 229)

– The perceived relationship between improved performance and the attainment of increased rewards.

– Accuracy of instrumentality estimates (pg. 230)

• The true linkage between performance on various dimensions and the attainment of rewards as determined by management practices and policies on sales

performance evaluation and rewards for levels of performance.

– Magnitude of instrumentality estimates (pg. 231)

• The degree to which the salesperson believes that an improvement on some performance dimension will result in attainment of rewards for the performance

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Valences for rewards (pg 231)

• The perceived attractiveness of various rewards the salesperson might receive.

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Performance attributions (stable, unstable, internal, external) (pg.

236)

– Stable internal factors – these factors are unlikely to change much in the near future (personal skills and abilities).

– Unstable internal factors – these factors may vary from time to time (effort expended or mood at the time).

– Stable external factors – these factors are external to the salesperson and remain relatively stable over time (nature of the task, competitive situation in the territory).

– Unstable external factors – these factors are external to the salesperson and vary over time (a boost in sales from a aggressive advertising campaign).

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Career stages (exploration, establishment,

maintenance, disengagement) (pg 239)

– The stages in a salesperson’s career.– Exploration (pg. 239)

• Salespeople in the earliest stage of their career (often less than 30) who are unsure about whether selling is the most appropriate occupations for them to

pursue and whether they can be successful.– Establishment (pg. 240)

• Salespeople who have settled on an occupation and desire to build it into a successful career (often late 20’s or early 30’s).

– Maintenance (pg. 240)• Salespeople who primarily concerned with retaining their present position, status

and performance level within the sales force (often late 30’s or early 40’s).– Disengagement (pg. 240)

• Salespeople who are beginning to prepare for retirement and the possible loss of self-identity that can accompany separation form one’s job (often in their late 50’s

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Plateauing (pg. 241)

• Often described as early disengagement it occurs when salespeople have reached the limit of the potential (promotion and or performance) and begin to exhibit negative job behaviors and attitudes.

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Earnings opportunity ratio (pg. 246)

• The ratio of the total financial compensation of the highest paid salesperson to the average in the sales force.

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Psychological Process of Motivation

• Motivation is an individual’s choice to:

– Initiate action on a certain task

– Expend a certain amount of effort on that task

– Persist in expending effort over a period of time

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Bases for Motivation

• Expectancies – the perceived linkages between more effort and achieving improved performance

• Instrumentalities – the perceived relationship between improved performance and receiving increased rewards

• Valence for rewards – the perceived attractiveness or intrinsic value the rewards the salesperson might receive

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Expectancy

• A salesperson’s perceived link between job effort and achieved performance• Estimates the probability that increased effort will lead to improved performance• Accuracy of expectancies is based on one’s understanding of the relationship

between effort and achievement• Magnitude of expectancies is the perceptual value assigned to an expectancy

based on the ability to control the required performance

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McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved.

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McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved.

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Instrumentalities

• Link job performance and available rewards.• Estimate of the likelihood that an improvement in performance will lead to a

specific reward.• Accuracy of Instrumentalities - based on the perceptual clarity of understanding

the relationship between improvement, achievement and available rewards• Magnitude of Instrumentalities - an estimate of the intrinsic value of firm’s

compensation plan

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Valences for Rewards

• Measure perceptions of the 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 desired and most effective for motivation varies per individual

• Satisfaction with current rewards depends upon perceived value

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Personal Characteristics Affecting Motivation

• Individual satisfaction with current rewards• Demographic variables

• Job experience• Psychological variables –personality traits and attribution of meaning to

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Satisfaction

• Workers currently dissatisfied with their rewards value lower-order rewards most highly

– Maslow’s hierarchy of needs– Herzberg’s theory of motivation

– Alderfer’s existence and growth theory • High-order rewards will be valued more highly after lower-order needs for

rewards have been satisfied• Salespeople satisfied with their current income (a lower-order reward) assign

lower valences to earning more pay

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Demographic Characteristics

• Older, more experienced salespeople obtain higher levels of low-order rewards• Satisfaction with the current level of lower-order rewards may also be influenced

by the demands and responsibilities the sales rep must satisfy with those rewards

• Individuals with more formal education are more likely to desire opportunities for higher-order rewards

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Job Experience

• More experience provides– clearer idea of how expending effort affects performance– understanding of how superiors evaluate performance

– how certain performance leads to rewards• Magnitude of expectancy perceptions relates to experience.

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Psychological Traits

• Motivation seems to be affected by psychological traits.• Strong achievement needs coincide with higher valences for higher-order

rewards• Self-esteem, perceived competence, and ability to perform job activities relate

positively to the magnitude of expectancy estimates

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Performance Attributions

• People try to identify and understand the causes of major events and outcomes in their lives

• Stable internal factors – unlikely to change much in the near future• Unstable internal factors – vary from time to time

• Stable external factors – e.g., the nature of the task or competitive situation in a particular territory

• Unstable external factors – may change next time

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Management Implications

• Relationships between characteristics and motivation levels have two broad implications for sales managers:

– They suggest people with certain characteristics are likely to understand their jobs and their companies’ policies especially well

– Some personal characteristics are related to the kinds of rewards salespeople are likely to value and find motivating

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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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Causes of Plateauing

• Lack of a clear career path

• Boredom

• Failure to manage the person effectively

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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

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Impact of Environment on Motivation

• Variations in territory potential and strength of competition constrain ability to achieve high levels of performance

• Understanding how and why salespeople perform differently under varying environmental circumstances is useful to sales managers

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Supervisory Variables and Leadership

• Closeness of supervision– Most occupations prefer relatively free from supervision

– B-2-B salespeople prefer close supervision• Span of control – increased span of control results in decreased supervision

• Frequency of communication – increased communication means decreased role ambiguity

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Incentive and Compensation Policies

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

• Preferential treatment for “stars” may reduce morale• The range of financial rewards currently received may influence the valences of

additional financial rewards• Earnings opportunity ratio

– The ratio of the total financial compensation of the highest paid salesperson to that of the average in a sales force

– higher ratio equals a higher valence

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Summary

• The amount of effort the salesperson desires to expend on each activity or

task associated with the job—the individual’s motivation—can strongly

influence job performance. This chapter reviewed the factors that affect an

individual’s motivation level. The chapter suggested an individual’s motivation to expend effort on any particular task is a

function for that person’s (1) expectancy, (2) instrumentally, and (3)

valence perceptions.

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Summary

Expectancy refers to the salesperson’s estimate of the probability that expending a given amount of effort on some task will lead to improved performance on some dimension.

Expectancies have two dimensions that are important to sales managers—magnitude and accuracy. The magnitude of a salesperson’s expectancy perceptions indicates the degree

to which the individual believes that expending effort on job activities will directly influence job performance. The accuracy of

expectancy perceptions refers to how clearly the individual understands the relationship

between the effort expended on a task and the performance on some specific dimension that

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Summary

Instrumentalities are the person’s perceptions of links between job performance

and various rewards. Specifically, an instrumentality is a salesperson’s estimate of the probability that a given improvement in

performance on some dimension will lead to a specific increase in the amount of a particular reward. A reward can be more pay, winning a

sales contest, or promotion to a better territory. As with expectancies, sales

managers need to concerned with both the magnitude and accuracy of their subordinates’ instrumentalities.

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Summary

The salesperson’s valence for a specific reward is the individual’s perception of the

desirability of receiving increased amount of that reward. This valence, along with the individual’s valence for all other attractive rewards and the

person’s instrumentality perceptions, determines how attractive it is to perform well on some

specific dimension.Several factors influence salespeople’s

expectancy, instrumentality, and valence perceptions. Three major forces are (1) the

personal characteristics of the individuals in the sales force, (2) the environmental conditions they

face, and (3) the company’s own policies and procedures. The chapter reviewed some major

influences and their likely impacts on each of the three categories.

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