Motivating a Sales Force CHAPTER 8 Learning Objectives

Motivating a Sales Force CHAPTER 8

Learning Objectives What is motivation? Behavioral concepts in motivation v Maslow’s hierarchy of needs v Dual-factor theory v Expectancy theory Financial and nonfinancial rewards

What is motivation? The desire to put on effort to fulfill a need. In sales job – motivation is the effort salesperson wants to make to complete various aspects of their jobs.

MOTIVATION IS THE CHOICE OF AN INDIVIDUAL TO… 1. Initiate action on a certain task … choice; 2. Expend a certain amount of effort on that task … intensity; 3. Persist in expending effort over a period of time … persistence. The amount of effort the sales person desires to expend on each activity associated with the job. Motivational effort includes three dimensions: intensity, persistence, and choice.

Dimensions of Sales Motivation Intensity – refers to the amount of effort the salesperson expends on a given task (Example, hours or days spend). Persistence – refers to how long the salesperson will continue to put forth effort (Example, until he or she gets the first client or order). Choice – refers to the salesperson’s choice of specific actions to accomplish job-related tasks. (Example, focus on a particular customer or region).

Fig. 8 -2 Motivational Conditions Are the rewards worth the effort? NO YES Does better YES Does more effort YES performance lead to better lead to greater performance? rewards? NO NO The same or less effort GREATER EFFORT

Motivational Conditions-cont. The motivational process begins with an aroused need. Three conditions must exist before an unfulfilled need leads to enhanced sales performance. v First, salesperson must feel that the reward’s are desirable. v Second, they must believed that the rewards are tied to performance. v Third, sales reps must believe that the performance goals on which the rewards are based are attainable/achievable.

Behavioral Concepts in Motivation Managers must know what salesperson’s needs are before developing motivational programs. Four motivational theories offer classification systems that can help managers recognize and understand different kinds of needs: Maslow’s hierarchy of needs theory, Hertzberg’s dual-factor theory, expectancy theory, and role theory.

Sa ne fety ed s Es ne teem ed s Se lf- ac t ne uali ed za s tio n Fig 8 -3 Maslow’s Hierarchy of Needs… a ic g lo is o eds y e Ph l n Fulfilled through: Self-development, challenge. Managerial actions: Provide/offer advanced training, assignments to special projects, more responsibility and authority. Fulfilled through: Status, recognition. Managerial actions: Recognize sales rep achievements l personally and publicly through title changes, commendation ia c letters, promotions. s So ed Fulfilled through: Affiliation, friendship, acceptance. ne Managerial actions: Use team selling, hold social functions, distribute employee newsletters, hold sales meetings, mentoring. Fulfilled through: Job security, safety, income security. Managerial actions: Provide safe work environment, set mutually agreed-upon performance standards, communicate job performance expectations and consequences of failure to perform. Fulfilled through: Food, shelter, clothing, health care. Managerial actions: Provide/offer adequate income and good benefits package.

Hertzberg’s Dual-Factor Theory HYGIENE FACTORS MOTIVATION FACTORS • pay • recognition • company policies • responsibility • supervision conditions • challenge • work • growth opportunities

Hertzberg’s Dual-Factor Theory-cont. Called hygiene factors because they deal with the condition of the work environment rather than the work itself. Motivation factors are part of the job itself and are called motivation factors because they must be present for the person to feel motivated. Pay can be both a hygiene and a motivation factor.

Expectancy Theory Based on the idea that needs provide the starting point for understanding an individual’s motivation. Conditional links: v Reward/effort-equity theory v Performance/reward v Effort/performance

Fig. 8 -5 Salespeople’s Perceived Reasons for Failure and Their Motivational Impact Motivational impact Perceived reasons Ability Effort Strategy Task difficulty Luck Positive Seek help; get additional training; ask for supervisor’s assistance; increase effort Work harder; make more calls; work longer hours Change selling strategy; adapt the presentation Work harder; change strategies; or seek help No change in behavior Negative Become frustrated and discouraged; give up No change in behavior Become frustrated and discouraged; give up Avoid the situation

Salesperson Characteristics Salesperson’s needs, evaluation of rewards, and their perceptions of the conditional links described above are influenced by the personal characteristics such as demographics, psychological traits and experience.

Career Stages Salespeople’s needs change as they progress through their careers Exploration (very achievement oriented) Primary concern is finding a suitable occupation Underdeveloped skills and knowledge Many drop out or are terminated Low expectancy instrumentality, high valence for personal growth Establishment (committed and striving to succeed) Primary concern is improving skills and performance Lack of promotion may cause disengagement or quitting New commitments make pay important High expectancy instrumentality, high valence for promotion and pay Maintenance (valuable to company) Primary concern is maintaining position, status, and performance Have highest sales volumes and percentage of quota and pay High valence for recognitions, respect, and pay Low valence for promotion Disengagement (preparing for retirement) Primary concern is preparing for retirement and/or developing outside interest Withdrawing psychologically Lose interest in their job

Financial Rewards and Nonfinancial Rewards. Compensation – money is often used as an incentive for salesperson. Sixty-nine percent companies surveyed use cash as an incentive. Other-financial rewards – merchandise and travel (Lexmark, Panasonic). Experience-based incentives (learned to pilot the shuttle – NASA space camp). Sales Contests (short-term incentive programs that use prizes and awards to motivate). Nonfinancial rewards – job enrichment (increases in responsibility), recognition and honor awards.

Sales Contest Design Elements Promote & Publicize Sales Contest Design Equally Attainable Goals Attractive Variety of Prizes

Causes of Plateauing (stopped improving a developing) No clear career path Not managed adequately Bored Burned out Economic needs met Discouraged with company Overlooked for promotion Lack of ability Avoiding risk of management job Reluctance to be transferred