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Motivation and Reward
System Management
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Motivation and Reward
Systems Motivation - Three Dimensions: Intensity The amount of mental and physical effort
put forth by the salesperson Persistence The salesperson's choice to expend effort
over a period of time
Direction The choice by salespeople of where their
efforts will be spent
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Motivation and Reward
Systems Motivation - Three Dimensions
The motivation task isincomplete unless thesalespeoples efforts arechanneled in directionsconsistent with the overall
strategic role of the salesforcewithin the firm
Self-motivation is the ideal
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Motivation and Reward
SystemsIntrinsic vs. Extrinsic Motivation Intrinsically Motivated
When doing the job is reward in itself
acts as motivators
Extrinsically Motivated
When rewards such as pay and formal
recognition act as motivators
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Motivation and RewardSystemsReward System Managementinvolves the selection and utilization of organizationalrewards to direct salespeople's behavior toward theattainment of organizational objectives
Organizational Rewards Those that are given in return for
acceptable performance or effort;financial or nonfinancial
Non-Compensation Rewards Factors related to the work situation
and well-being of each salesperson
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The Optimal Salesforce Reward
System
Balance of Organization,Individual, and Customer Needs
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The Optimal Salesforce
Reward System From the Organization's
Perspective
Provide an acceptable ratio of costs andsalesforce output in volume, profit, or otherobjectives
Encourage specific activities consistent withthe firm's overall, marketing, and salesforce
objectives and strategies Attract and retain competent salespeople,
thereby enhancing long-term customerrelationships
Allow the kind of adjustments that facilitateadministration of the reward system.
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The Optimal Salesforce
Reward System
From the Organization'sPerspective
From Salesperson's Perspective Expect to be treated equitably
Comparable rewards
Stability with incentives
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The Optimal Salesforce
Reward System
From the Organization'sPerspective
From Salesperson's Perspective
From Customer's Perspective Response to high pressure sales techniques
Require increased service/quality
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Types of Salesforce Rewards
Six Most Popular Rewards(Exhibit 9.1)
Pay
Promotion
Sense of Accomplishment
Personal GrowthOpportunities
Recognition
Job Security
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Financial Compensation
Straight Salary
Advantages of Salary Plans
Planned Earnings Disadvantages of Salary Plans
Salary Compression
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Financial Compensation
Straight Salary
Straight Commission
Commission Plan Variations Commission Base - volume or profitability
Commission Rate - constant, progressive, ora combination Constant Rate
Progressive Rate Regressive Rate
Commission Splits - between two or moresalespeople or between salespeople and theemployer
Advantages of Commission Plans Disadvanta es of Commission Plans
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Financial Compensation
Straight Salary
Straight Commission
Performance Bonuses
Combination Plans (Salary plusIncentive)
Financial-Compensation Mix Advantages of Combination Plans
Disadvantages of Combination Plans
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Nonfinancial Compensation
Opportunity for Promotion
Sense of Accomplishment
Opportunity for PersonalGrowth
Recognition
Job Security
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Additional Issues in Managing
Salesforce Reward Systems
Sales Contests
Equal Pay
TeamCompensation
Global
Considerations Changing the
Reward System
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Guidelines for Motivating and
Rewarding Salespeople1. Recruit and select salespeople whose personal
motives match the requirements and rewardsof the job.
2. Attempt to incorporate the individual needs ofsalespeople into motivational programs.
3. Provide adequate job information and assureproper skill development for the salesforce.
4. Use job design and redesign as motivationaltools
5. Concentrate on building the self-esteem ofsalespeople.
6. Take a proactive approach to seeking outmotivational problems and sources offrustration in the salesforce.
