Sales force-managment

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Motivation

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Discussion Questions

What is the best way to motivate a salesforce?

How can you systematically design a motivation system?

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Three Major Determinants of Motivation

Environmental conditionsThe firm’s management policies

compensation supervision task characteristics

Personal characteristics of the salesperson

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Motivation Session Objectives

understand the components of motivation through the expectancy-value model

relate management tools to components of the expectancy-value model, to use in influencing motivational levels

consider how management style and the use of various “tools” influence motivation

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Motivation Session Outline

Locus of Control and MotivationExpectancy-Value Model of

motivation what is it? Who cares? (implications of the model)

Glengarry Glen Ross & the impact of the sales manager on motivation

The impact of role stress

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Locus of Control and Motivation

Locus: External vs. internal attributions Stable vs. unstable attributions

Examples: External Stable: External Unstable: Internal Stable: Internal Unstable:

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The Expectancy-Value model

Why are people motivated to initiate a task to choose a certain effort level to persist in a task

Expectancy Principle: salespeople choose a level of effort based on the expected payoffs of alternative effort levels

Most popular model of motivation (at least among sales force researchers)

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Expectancy-Value Model in Notation

Mj=Ej x Vj where:

Mj=motivational drive to achieve level j of performance (e.g. sales, number of new accounts etc.)

Ej =beliefs about the effort to performance linkage: perceived chances of achieving level j of performance given effort

Vj = overall subjective utility (valence or value) of achieving level j of performance

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Examples:

Ej Vj Mj Level of Performance

80% 60 48 If j=$200,000 in sales

40% 100 40 If j=$300,000 in sales

10% 80 8 If j=$400,000 in sales

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Valence/Value: Vj

Valence is a composite of the utility you derive from the suboutcomes (consequences) that accompany achieving level j of performance

These might include: more pay, promotion, liking & respect, lack of leisure

time, personal growth security, sense of accomplishment, recognition, hurting

personal life

Outcomes can have negative utility/valenceObviously the list could be longer & vary across

individuals

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Vj= (Iij x Vi)

Vj = expected overall utility to an individual of achieving performance level j

Iij = beliefs about the performance to suboutcomes linkages: the individuals subjective probability that achieving performance level j would create suboutcome I (instrumentalities)

Example: 30% chance that selling $300K (performance level j) would get one a promotion (suboutcome I)

Vi = the utility an individual derives from suboutcome I (e.g., a promotion) Note: this can be negative

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That’s nice, but who cares?

Nobody thinks like this (it’s too complicated)

But model holds up well in field testing (good “as if” model)

Explains up to 40% of variance in performance

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Expectancy-Value Model Advantages

Model is a handy way to structure a messy question

Forces you to project o each individual’s underlying beliefs (expectancies) and needs/wants (values)

Different people can exhibit the same level of motivation for very different reasons

Nice vocabulary to talk about motivation

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Implications for How to Motivate

No reward is motivating if it is out of reach (low expectancy)

Raising the goal (performance level j) often depresses motivation Introduces negative outcomes Depresses expectancies

Can motivate by trying to induce sales people to: raise expectancy (I.e. through training, encouragement) consider a negative suboutcome unlikely consider a positive suboutcome likely Add a new positive suboutcome Change their ideas about whether suboutcomes are desirable or

undesirable (vi: doomed strategy for the most part)

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Glengarry Glen Ross

what is the impact of management style on the components of the expectancy value model?

What motivational “tools” are used? How do these tools impact motivation in the

short-term? Over the long term? How do these tools impact extrinsic motivations?

Intrinsic motivation?

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Motivators

Positive Motivators

Commission Recognition Acceptance Respect Trust Achievement Pride

Negative Motivators Fear Intimidation Revenge Obligation Social Comparison

(one-up)

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Sales Manager Objectives & Tools

Objectives: Increase magnitude and accuracy of expectancies Increase accuracy of instrumentalities Understand and work with valences

Key: reduce role stress arising from role ambiguity & role conflict

Tools: training: expectancies evaluations, reviews: expectancies, instrumentalities communication, participation: instrumentalities selection: hire SP whose Vi’s match company suboutcomes

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How to Motivate

Define each employee’s motivating factors and provide an environment that incorporates those factors

Praise performance Address poor performance Set goals & clearly communicate expectations Share your vision and include your team in creating it

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Measuring Components of the Model

May be done informally for small sales forces, but beware of biases (e.g. we believe what we want to believe; we think everyone else is like we are)

periodic surveys can be conducted to quantify each component of the model expectancies: to what extent do you believe that if you do

x, y will happen instrumentalities: to what extent do you believe that if y

happens, you’ll receive z valences for suboutcomes: how important is ..

Quantified information is valuable at both the aggregate level and the individual level

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Role Stress

“A primary influence on how salespeople perform is their perceptions of the demands placed upon them”

“A role is a prescription: it tells you the activities and behavior that are expected of

anyone in a position

Role partners communicate expectations pressure salespeople to meet them

A role partner is anyone with a vested interest in how a salesperson does the job, such as: the boss, the customers, other executives, other salespeople and

support people, people who are significant in the sales rep’s personal life

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Role Stress (continued)

Role stress is like a disease; most reps suffer complications of role stress

Why? Sales is at the boundary of the firm; salespeople are

boundary spanners, which means lots of role partners Salespeople often have to be creative; find solutions;

reconcile needs A sales reps performance affects performance of lots of other

people Sales reps personify the cruel voice of the marketplace

(scapegoat- kill the messenger) Time and resource constraints necessitate tradeoffs between

role partners’ expectations

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Role Stress (continued)

Day after day, salespeople grapple with the messages their role partners send them and the pressures role partners put on them.

Two things create role stress (create problems that eventually will make the salesperson miserable): Perceived Role Conflict Perceived Role Ambiguity

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Perceived Role Conflict:

you feel that the demands of your role partners are incompatible. To make one happy, you have to upset another (perceived).

Upshot: misery & poor motivation

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Perceived Role Ambiguity:

You feel you don’t have the information to cope with your job demands don’t know how to do a task don’t know what role partners expect don’t know how your performance is being evaluated don’t have clear objectives SUM: unsure how you’re doing and what to do next

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How to reduce Role Stress

Communicate! Give feedback! Even bad news is better than news Salespeople must have accurate expectancies &

instrumentalities Training and encouragement: increase

expectancies for desired levels of performance- people who believe they can, often do

Accept that some role stress is normal (even desirable)

but be especially alert for dysfunctional levels of role stress in inexperienced people

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Sales Manager Atmosphere Creation

Traditional Approach Authoritative “management” Emphasis on rewards the manager gives out:

pay promotion recognition of achievement

Leading to: Motivation to work harder: intensity, persistence

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Non-traditional atmosphere

Participate leadership Emphasis on intrinsic rewards & motivation people work because selling satisfies them with:

challenges pride in serving customers pride in skills

“Warm Culture” informal sense of shared values identify with company long-term employment

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Motivating

A motivator is one who can understand an overall goal and inspire others to make a personal commitment to this goal

5 ways to provide a motivating environment Participation: involvement in decisions that affect the

team Environment: climate for success, creativity Recognition: giving credit, praise, rewards Knowledge: having it, communicating it Style: use appropriate style for each situation:

coaching, supporting, delegating, directing