Field Sales Incentive Program

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					Part V

Chapter 11:

Learning Objectives:
   Define motivation and explain sales management
    concerns with motivation.
   Tell how and why individuals needs may differ.
   Describe a basic model for the motivation process.
   Discuss the different types of quotas and the
    administrative issues involved in using quotas.
   Describe how to design incentive and recognition
    programs and their limitations.
Chapter Outline:

   What is Motivation?
   A Model of Motivation.
   Quotas.
   Incentive Programs.
   Recognition Programs.
What is Motivation?

   Drive to initiate an action.
   The intensity of effort in an action
   The persistence of effort over time.
Reasons for Motivating Salespeople

   Frequent rejection
   Physical separation from company
   Direct influence on quality of sales
   Indirect influence on performance
Individual Needs:
Maslow’s Hierarchy of Needs

                      Intense job challenge, full potential, full
Self-Actualization     expression, creative expansion.

                      Achievement, respect, recognition,
                       responsibility, prestige, independence,
   Self-Esteem         attention, importance, appreciation.
                      Belonging, acceptance, love, affection,
                       family and group acceptance,
 Love-Belonging        friendships.

                      Security, stability, dependency,
                       protection, need for structure, order,
                       law, tenure, pension, insurance.

                      Hunger, thirst, reproduction, shelter,
  Physiological        clothing, air, rest.
Maslow’s Needs & Related Sales
Force Motivators
Of Needs        Motivators
                 Challenging tasks calling for creativity

ESTEEM           Recognition programs

BELONGING        President’s Club $1 million

                 Job security and fringes

PHYSIOLOGICAL    Cash wages and bonuses
Career Stages

   Does everyone go through these
   What can be done to address the
    concerns of salespeople at each
Exploration Stage

   Motivational Needs
    – Learning the skills required to do the job well.

   Manager Role?
    – Reinforce accomplishments
    – Spend time with salesperson
    – Discuss long-term benefits of working for the organization
Establishment Stage

   Motivational Needs
    – Use skills to produce results, increase job autonomy

   Manager Role?
    – Provide high rewards for high achievers
    – Have salespeople recognize success has something
      other than promotion
Maintenance Stage

   Motivational Needs
    – Develop a broader view of work and organization,
      maintain a high level of performance

   Manager Role?
    – Challenge salespeople to use their knowledge in new ways
    – Introduce significant rewards for mastering new challenges
Disengagement Stage

   Motivational Needs
    – Establish a stronger self-identity outside of work,
      maintain performance level

   Manager Role?
    – Maintain focus on personal goals and importance of
      organizational citizenship behaviors (e.g., being a
      role model, assist in other aspects of the organization)
Career Stage Effects on Satisfaction

Select Research Findings:
   All stages are least satisfied with
    promotion and pay
    –   However, pay satisfaction is only dimension on which disengagement
        salespeople are more satisfied than establishment or maintenance

   Maintenance salespeople are less satisfied
    with supervision than are establishment
   Disengagement as well as maintenance
    occurs quite early for some people -- Is
    this a management concern?
Overlap of Ages on Career Stages
Career          Proportion of
Concerns        Sales Force
Exploration             14%

Establishment           29%

Maintenance             42%

Disengagement           15%          Age Range
                   20           30    40         50   60   65
Figure 13-4:        Career Stage Characteristics
                       Exploration                    Establishment               Maintenance               Disengagement

Career             Finding an appropriate           Successfully               Holding on to what        Completing
Concerns            occupational field.               establishing a              has been achieved;         one’s career.
                                                      career in a certain         reassessing career,
                                                      occupation.                 with possible
Motivational       Learning the skills              Using skills to            Developing broader        Establishing a
Needs Job           required to do the job            produce results.            view of work and           stronger self-
                    well.                             Adjusting to                organization.              identity outside of
Related                                           
                   Becoming a contributing           working with               Maintaining a high         work.
                    member of an                      greater autonomy.           performance level.        Maintaining an
                    organization.                                                                            acceptable
                                                                                                             performance level.
Personal           Establishing a good initial      Producing superior         Maintaining               Acceptance of
Challenges          professional self-concept.        results on the job in       motivation, though         career
                                                      order to be                 possible rewards           accomplishments.
                                                      promoted.                   have changed.
                                                                                 Facing concerns
                                                                                  about aging.
Psychological      Support                          Achievement                Reduce                    Detachment from
Needs              Peer acceptance                  Esteem                      competiveness              the organization and
                   Challenging position             Autonomy                   Security                   organizational life.
                                                     Competition                Helping younger
Giving Status to Salespeople

1. Compensation
   - exceed first-line managers

2. Job Title
   - no cost but considerable payback

3. Company Car Upgrade
   - salespeople spend much time in car
   reminds them of their value.

4. Car Phone –
   - justified on a purely business basis
Giving Status to Salespeople

5. Field Sales Council
   - meet president for 1/2 day open-ended discussion on
   field marketing conditions - report back to field meetings
   the results

6. Outside Secretarial Support
   - or more exclusive central.

7. Published Success Stories
   - high form of recognition

8. Task Force Assignments
   - e.g., review of all paperwork.
  Figure 11-5:

  Model of Motivation
                                                 Importance of receiving
                                                 more of certain rewards

Effort                   Performance                    Rewards

     Expectancy                   Instrumentality
     Likelihood that increased    Likelihood that greater
     effort will lead to          performance will lead
     greater performance          to more rewards
A Model of Motivation:

   Effort-Performance Relationship.
   Performance-Reward Relationship.
   Importance of Rewards.
     Expectancy Theory System

     EFFORT            PERFORMANCE                 REWARD

Likelihood increased   Likelihood greater      Importance of receiving
effort will lead to    Performance will lead   More of certain rewards
greater performance    to more rewards
     Chapter 11

Why the
for sales
                                       Motivation Tools
              What are
              the different
              theories of        Self-
                                                    Incentive   Recognition
                              Management            programs     Programs

 Behavioral Self-Management
 Self-set goals.
Why Use Quotas

1. Help motivate salespeople.
2. Direct where to put effort.
3. Provide standards for evaluation.

  1. Sales volume in dollar or point system
       Points allow for different weights for different
        important products independent of price.
       Points not affected by inflation.
       Sales quota may be developed for:
         –  Total territory sales, and/or
         –  Individual product or product group.
Various Types of Quotas

2. Profit-based quotas are rarely based on
  bottom line profits
    Difficult to account for indirect expenses

    Profits are usually configured as gross margins minus
     some load factor

3. Activity-based quotas are based on activities directly
  related to sales volume
    More directly under control of the salesperson

    Biggest problem is falsification of call reports

    Issue of quantity vs. quality of activity?
Figure 13-7:
Use of the Various Types of Quotas

 Sales Volume Quota

  Profit-based Quota

      Activity Quota

               Large firms’ Sales > $40M    Small firms’ Sales < $40M
Incentive Program Decisions

  What is Incentive Program?
  What is difference from regular compensation such
   as commission?
  Key decisions
     Goals and Timing.
     Prizes.
     Administration Issues.
  What is difference between
   Incentive and Recognition programs
Types of Incentive Awards

            Used by 168 Firms
                          Percentage of
   Type of Award            Firms Using
   Cash                         59%
   Selected Merchandise         46%

   Merchandise Catalog          25%

   Travel                       22%
Recognition Programs:

   What is Recognition Program.
   Pace-Maker Conference.
   Top Honors Conference.
   Walter Wheeler Award.

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