Chapter 11 Sales Force Motivation PowerPoint presentation prepared by Dr. Rajiv Mehta New Jersey Institute of Technology

Chapter 11

Sales Force Motivation

PowerPoint presentation prepared byDr. Rajiv Mehta

New Jersey Institute of Technology

Copyright © Houghton Mifflin Harcourt Publishing Company. All rights reserved. 11 | 2

Chapter Outline

• Foundations of Motivation• Applying Contemporary Motivation Theories to

Sales Management• Using Rewards and Incentive Programs for

Sales Force Motivation• Sales Force Motivation Strategies and Tools• Additional Perspectives in Twenty-First Century



Learning Objectives

After reading this chapter, you should be able to do the following:1. Understand the nature of motivation.2. Apply contemporary theories of motivation to sales

management.3. Design reward and incentive programs to motivate

salespeople.4. Develop sales contests and sales meetings to motivate

salespeople.5. Use organizational commitment, career stage, and

empowerment to motivate a sales force.


Foundations of Motivation

• Motivation is the set of dynamic interpersonal processes that cause the initiation, direction, intensity, and persistence of work-related behaviors of subordinate salespeople toward the attainment of organizational goals and objectives.

– Direction means tasks on which the individual will focus effort.

– Intensity refers to the amount of physical and mental effort expended on a given task.

– Persistence refers to the duration of the effort an individual will exert.

Source: Stockybte


Applying Contemporary Motivation Theories to Twenty-First Century Sales Management

1. Content theories

1. Content theories

3. Reinforcement

oriented theories

3. Reinforcement

oriented theories

2. Process theories

2. Process theories

Contemporary motivation

theories

Contemporary motivation

theories

Process theories emphasize the kind of goals and rewards that motivate people. Specifically, they try to explain the thought process of employees and identify actions that fulfill their needs.

• equity theory

• expectancy theory

• attribution theory

• goal-setting theory

Process theories emphasize the kind of goals and rewards that motivate people. Specifically, they try to explain the thought process of employees and identify actions that fulfill their needs.

• equity theory

• expectancy theory

• attribution theory

• goal-setting theory

Content theories provide insights into employees’ needs for rewards and recognition, which can help sales managers design compensation plans and rewards that motivate salespeople.

• hierarchy of needs theory

• existence, relatedness, growth (ERG) theory

• needs theory

• dual factor theory

Content theories provide insights into employees’ needs for rewards and recognition, which can help sales managers design compensation plans and rewards that motivate salespeople.

• hierarchy of needs theory

• existence, relatedness, growth (ERG) theory

• needs theory

• dual factor theory

also known as organizational behavior modification theoryalso known as organizational behavior modification theory


Maslow’s Hierarchy of Needs

• Maslow’s hierarchy is one of several motivation theories that explain human behavior.

• Humans satisfy lower-level needs before attempting to satisfy the next higher-level need.

• What are Maslow’s five levels of needs? higher-level needs

lower-level needs


Maslow’s Hierarchy of Needs

esteem needs

social needs

safety needs

physiological needs

self-actualization

How can this theory be used in sales management?

higher-level needs

lower-level needs

Maslow’s hierarchy is one of several motivation theories that explain human behavior.


Existence, Relatedness, Growth (ERG) Theory

1.

Existence 1.

Existence

3. Growth

3. Growth

2. Relatedness

2. Relatedness

ERG theoryERG theory

• similar to Maslow’s social and esteem needs

• similar to Maslow’s social and esteem needs

• similar to Maslow’s physiological and safety needs

• similar to Maslow’s physiological and safety needs

• similar to Maslow’s self-actualization needs

• similar to Maslow’s self-actualization needs


Needs Theory

1. Need for

power

1. Need for

power

3. Need for affiliation

3. Need for affiliation

2. Need for

achievement

2. Need for

achievement

Needs theoryNeeds theory

• the strong urge to master and accomplish difficult tasks

• the strong urge to master and accomplish difficult tasks

• reflects the drive to dominate, influence, and have authority to control others

• reflects the drive to dominate, influence, and have authority to control others

• the desire to establish friendships, to have close working relationships with peers as well as customers, and to avoid conflict

• the desire to establish friendships, to have close working relationships with peers as well as customers, and to avoid conflict


Dual Factor Theory(aka Motivation-Hygiene Theory)

1. Motivation

factors

1. Motivation

factors

2. Hygiene factors

2. Hygiene factors

Dual factor theory

Dual factor theory

• Hygiene factors are extrinsic aspects of the job, such as company policies, pay level, fringe benefits, working conditions, and job security.

• When present, hygiene factors do not actually induce positive motivation in salespeople; their absence, however, leads to salesperson dissatisfaction and demotivation.

• Hygiene factors are extrinsic aspects of the job, such as company policies, pay level, fringe benefits, working conditions, and job security.

• When present, hygiene factors do not actually induce positive motivation in salespeople; their absence, however, leads to salesperson dissatisfaction and demotivation.

• Sources of satisfaction are called motivators because they are necessary to stimulate individuals to superior efforts.

• They include responsibility, achievement, recognition, and opportunities for growth and advancement.

• When present, they motivate salespeople; if absent, they demotivate them.

• Sources of satisfaction are called motivators because they are necessary to stimulate individuals to superior efforts.

• They include responsibility, achievement, recognition, and opportunities for growth and advancement.

• When present, they motivate salespeople; if absent, they demotivate them.


Equity Theory

• Equity theory of motivation suggests that employees compare their relative work contributions and rewards with those of other individuals in similar situations.

• Employees experience inequity when they feel either under- or over-rewarded for their contribution relative to that of others.

– Those who feel under-rewarded decrease their work efforts; people who feel overpaid tend to increase theirs.

• If salespeople perceive inequity, remedy the situation.

Source: Stockbyte


Expectancy Theory

• Expectancy theory of motivation proposes that individuals contemplate the consequences of personal actions in choosing different alternatives to satisfy their needs.

• Symbolically,

• Motivation =

– Ei = Expectancy is the salesperson’s

perception that exerting a given level of effort will lead to higher achievement.

– Ij = Instrumentality is the salesperson’s estimate of the probability that achieving a certain level of improved performance will lead to the attainment of certain rewards.

– jk = Valence is the desirability of a potential outcome or reward that the salesperson may receive from improved performance.

1

n

i j jkj

E I V

Source: Triangle Images


Attribution Theory

• Attribution theory identifies the reasons for a given outcome and contends that people are motivated to know why an event occurred and why they succeeded or failed at a certain task.

• An internal attribution is a reason within the salesperson that could affect performance (ability, effort, skill, and experience).

• An external attribution is an explanation that lies beyond the salesperson’s realm of control (luck, territory, or task difficulty).

• The outcome is that salespeople can choose either to work harder or to work smarter. Source: Stockbyte


Goal-Setting Theory

• Goal-setting theory attempts to increase motivation by linking rewards directly to salespersons’ goals.

• Sales managers should set these types of goals:– goals for individual salespeople– goals that are moderately difficult to achieve – goals that the salesperson will want to accomplish

• Successful implementation of goal setting includes the following:– Involve the salesperson in the goal-setting process to set

realistic goals.– Meet and reset goals if conditions change. – Fix goals that can be measured (time or dollar volume).– Provide positive feedback on how to correct shortfalls.– Provide timely public recognition for goal achievement. Source: Stockbyte


Goal Setting

• To see an excellent video on using goal setting to motivate the sales force, go to– http://www.sellingpower.com/video/index.asp?date=2/8/2007


Reinforcement Theory of Motivation(aka Organizational Behavior Modification)

• This theory uses principles of learning to strengthen, maintain, or eliminate behaviors through rewards or punishments.

• Here are four approaches:– Positive reinforcement provides a reward for a

desired behavior (bonus for opening new accounts).

– Negative reinforcement allows salespeople to avoid an undesirable outcome.

– Punishment provides sanction when salespeople display an undesired behavior.

– Extinction provides no positive reinforcement after an undesirable behavior.

Source: Stockbyte


To Motivate Salespeople, Sales Managers Must Recognize

• All salespeople are different.• Motivators change over time.• Once financial security is achieved,

other motivators must be considered.• Praise and recognition are extremely

important motivators for all salespeople.

• For salespeople to do their jobs well, they need the following:

– to be told what is expected of them– to be trained to perform properly– to be evaluated fairly and regularly– to be rewarded for performance

Source: Stockbyte


Articles on Sales Force Motivation

• To read articles on motivating the sales force, go to– http://www.optimalthinking.com/sales-force-motivation.html– http://www.inc.com/resources/leadership/articles/20070801/

musselwhite.html

• Read about sales motivation and the role of leadership at– http://ezinearticles.com/?Sales-Motivation-and-the-Role-of-

Leadership&id=701426

• Read an excellent article on sales leadership, motivating your sales team to the next level, at– http://www.agora-business-center.com/0907b2b.html


Using Rewards and Incentive Programs for Sales Force Motivation

5. Recognition

5. Recognition

4. Intrinsic rewards

4. Intrinsic rewards

3.Promotion

opportunities

3.Promotion

opportunities

2.Sales incentive

programs

2.Sales incentive

programs

1. Extrinsic rewards

1. Extrinsic rewards

Reward andincentive programs

Reward andincentive programs

salary, stock options, profit sharing

salary, stock options, profit sharing

cash, travel, awardscash, travel, awards

recognition, plaques, ringsrecognition, plaques, rings

respect, status, control, accomplishment

respect, status, control, accomplishment

career path with promotionscareer path with promotions


Sales Incentives Programs

• To see a video on sales incentives, go to– http://www.sellingpower.com/video/index.asp?

date=10/31/2006


How to Run a Sales Incentive Program

• To see an excellent video on how to administer a sales incentive program that motivates the sales force, visit– http://www.sellingpower.com/video/index.asp?

date=4/27/2007


Sales Force Motivation Strategies and Tools

1.Sales contests

1.Sales contests

2.Sales meetings

2.Sales meetings

MotivationstrategiesMotivationstrategies


Sales Contests

1. Sales contests: purposes– increase number of new

customers– develop sales of a new

product– counteract sales slumps

due to seasonal variations

2. Contest themes – summer contest– holiday contest

3. Contest rules

4. Contest rewards and prizes


Sales Contests

5. Salesperson participation

6. Contest duration

7. Promoting the contest

8. Assessing contest Effectiveness

9. Potential pitfalls of contests


Why Some Sales Contests Are Losers

• overestimating goals

• neglecting to publicize the contest

• rewarding only the top salespeople

• leaving spouses at home

• viewing the sales contest as a panacea

Source: Stockbyte


Sales Meetings

• National, regional, and local meetings– National meetings are held once a year.– Regional meetings are held three to four times a

year.– Local meetings are regularly held.

• Planning sales meetings– Establish meeting goals.– Select a theme on the purpose of the meeting.– Develop a tentative agenda or program for the

meeting.– Develop and finalize the program and budget.– Coordinate closely with all participants. – Provide handouts.

Source: Stockbyte


Sales Meetings

• competitive spirit

• specialized training

• change of pace

• video conferences


Websites for Firms That Help Develop Sales Force Motivation Programs

• To peruse the websites of various firms that specialize in developing sales motivation programs, go to– http://www.maritzincentives.com/incentives-sales-

incentives.html – http://www.hallmarkinsights.com/corp/sales.html– http://www.sales-train.com– http://www.incentiveprograms.com/science.asp


Additional Perspectives in Twenty-First Century Sales Force Motivation

3.Learning versus

performance orientation

3.Learning versus

performance orientation

2.Organizational

climate

2.Organizational

climate

1. Organizational and

job commitment

1. Organizational and

job commitment

4.Salesperson’s career cycle

4.Salesperson’s career cycle

Additionalmotivation

perspectives

Additionalmotivation

perspectives


Organizational and Job Commitment

1. Organizational

commitment

1. Organizational

commitment

2. Job commitment

2. Job commitment

CommitmentCommitment

• the degree of involvement (high or low) salespeople have in their job

• the degree of involvement (high or low) salespeople have in their job

• identifying with and internalizing the company’s values and goals and desiring to stay a viable member of the organization

• identifying with and internalizing the company’s values and goals and desiring to stay a viable member of the organization


Organizational Climate

3.Organizational characteristics

3.Organizational characteristics

2.Leadership

characteristics

2.Leadership

characteristics

1. Job

characteristics

1. Job

characteristics

4.Work group

characteristics

4.Work group

characteristics

Organizational climate

Organizational climate

company philosophy about managing salespeople

company philosophy about managing salespeople

formal and informal relationships among the salespeople

formal and informal relationships among the salespeople

role perceptions, opportunities, and problems in the job

role perceptions, opportunities, and problems in the job

supervisory styles and salesperson/sales manager relationships

supervisory styles and salesperson/sales manager relationships

Organizational climate consists of the perceptions salespeople have about their work situation and conditions.


Learning Versus Performance Orientation

1. Learning

orientation

1. Learning

orientation

2. Performance

orientation

2. Performance

orientation

Learning versus performance

orientation

Learning versus performance

orientation

• Performance orientation predisposes salespeople to work hard and generate sales.

• Performance orientation predisposes salespeople to work hard and generate sales.

• Salespeople discover new ways of selling effectively and try new approaches, even if doing so leads to mistakes; they learn by not repeating mistakes.

• Salespeople discover new ways of selling effectively and try new approaches, even if doing so leads to mistakes; they learn by not repeating mistakes.


Salesperson’s Career Cycle

3.Maturity or

maintenance stage

3.Maturity or

maintenance stage

2.Development or establishment

stage

2.Development or establishment

stage

1. Preparation or

exploration stage

1. Preparation or

exploration stage

4.Decline or

disengagement stage

4.Decline or

disengagement stage

Career stages Career stages

Salespeople hold on to what has already been achieved—position, status, image, and performance level.

Salespeople hold on to what has already been achieved—position, status, image, and performance level.

Salespeople may be preparing for retirement and may psychologically withdraw from the job by making fewer sales calls per day, may call solely on existing accounts rather than on prospects, and may lose interest in their work.

Salespeople may be preparing for retirement and may psychologically withdraw from the job by making fewer sales calls per day, may call solely on existing accounts rather than on prospects, and may lose interest in their work.

Salespeople's priority is to build up knowledge and skills to succeed in their new job.

Salespeople's priority is to build up knowledge and skills to succeed in their new job.

Salespeople become committed to the selling profession, seek stability in their professional and personal lives, and strongly desire professional success.

Salespeople become committed to the selling profession, seek stability in their professional and personal lives, and strongly desire professional success.



• See videos on various issues related to sales force motivation at– http://www.sellingpower.com/video/?date=2/23/2007– http://www.sellingpower.com/video/index.asp?

date=4/26/2007



• To see videos on how to motivate and reward top performers, go to– http://www.sellingpower.com/video/index.asp?

date=1/17/2007– http://www.jimcathcart.com/videos.aspx


Ethical Situation: What Would You Do?

Discussion Question You have been recently appointed regional sales manager for your company. You’re thrilled with this promotion, especially because you are the youngest regional sales manager in the company, so it’s obvious that senior management sees you as a real up-and-comer and possibly as a replacement for the national sales manager who, at age 64, is probably thinking about retiring soon. Two of the more senior district sales managers who report to you are not people you’re comfortable working with. Both have worked at the company for over twenty years, so they’ve developed strong social networks within the company. You’re fearful that they may undercut you in some way because they may be jealous that someone younger was brought in from the outside to be their boss. In reviewing the performance of their two districts over the past two years, you noted that they both ranked in the bottom 20%. Perhaps both are in the decline and disengagement stage of their careers. Thus, you could certainly make the case that their motivation and careers have plateaued and that they ought to be replaced by new sales managers in the hard-charging development/establishment stage. Nether district manager has given you a reason to question their allegiance to you, but you just don’t like to have such experienced, well-connected subordinates who might be able to go around you to talk to your bosses. Therefore, you’ve decided to start making a case to replace these two district managers, and one of the first things you’re going to do is significantly increase the sales quotas for their districts.

Documents

Chapter 11 Sales Force Motivation PowerPoint presentation prepared by Dr. Rajiv Mehta New Jersey Institute of Technology