Sales Force Management

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7

Salesperson Performance: Motivating the Sales Force

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Salesperson Motivators

• Novel situations
• Opportunities to meet people
• Participative style
• Depth of required expertise
• Minimal configuration
• Sharing expertise

Source: HR Chally Group (2009).

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• Understand motivation process
• Discuss effect of personal characteristics on salesperson motivation
• Understand how individual’s career stage influences motivation
• Discuss effect of environmental factors on motivation
• Discuss effect of factors inside company on motivation

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Psychological Process of Motivation

• Individual’s choice to:
• Initiate action on a task
• Expend a certain amount of effort on that task
• Persist in expending effort over time
• Expectancy theory

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7.1

The psychological determinants of motivation

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Bases for Motivation

• Expectancies – perceived linkages between more effort and improved performance
• Instrumentalities – perceived relationship between improved performance and increased rewards
• Valence for rewards – perceived intrinsic value of the rewards

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Expectancies

• Salesperson’s perceived link between job effort and performance
• Estimated probability that increased effort leads to improved performance
• Accuracy of expectancy estimates how clearly salesperson understands relationship between effort and achievement
• Magnitude of expectancies – perception of ability to control required performance

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Important questions and management implications of

salespeople’s expectancy estimates

7.2a

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Important questions and management implications of

salespeople’s expectancy estimates

7.2b

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7.3

Factors influencing the motivation process

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Instrumentalities

• Link job performance and available rewards
• Estimate of likelihood an improvement in performance will lead to a specific reward
• Accuracy of Instrumentalities - perceptual clarity of understanding relationship between improvement, achievement and available rewards
• Magnitude of instrumentality - the perceptual understanding that the salesperson can control or influence his or her own job performance

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7.4a

Important questions and management implications of salespeople’s instrumentality estimates

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7.4b

Important questions and management implications of salespeople’s instrumentality estimates

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Valences for Rewards

• Perceptions of desirability of receiving increased rewards through improved performance
• Other rewards may equal or exceed the value of increased financial compensation
• The kinds of rewards deemed most effective for motivation varies per individual
• Satisfaction with current rewards depends upon perceived value

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Model Predicts Performance?

• Model predicts motivation
• Motivation only one determinant of performance
• Motivation may explain 40% of performance level
• How is motivation affected by
• Personal characteristics?
• Environmental conditions?
• Policies and procedures?

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The psychological determinants of motivation

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Personal Characteristics Affecting Motivation

• Satisfaction with current rewards
• Demographic variables
• Job experience
• Psychological variables
• Personality traits
• Attribution of meaning to performance

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Satisfaction

• Workers dissatisfied with rewards value lower-order rewards
• High-order rewards valued more highly after lower-order needs have been satisfied
• Salespeople satisfied with their current income (a lower-order reward) assign lower valences to earning more pay

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Demographic Characteristics

• Older, more experienced salespeople obtain higher levels of low-order rewards
• Satisfaction with current level of lower-order rewards influenced by responsibilities to be satisfied
• More formal education increases desire for higher-order rewards

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7.5

The influence of demographic characteristics on valence for rewards

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Job Experience

• More experience provides
• Clearer idea of how effort affects performance
• Understanding of how superiors evaluate performance
• Understanding of how certain performance leads to rewards
• Magnitude of expectancy perceptions relates to experience

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Psychological Traits

• Affect motivation
• Traits
• High achievement need
• Internal locus of control
• Verbal intelligence
• General self-esteem
• Task-specific self-esteem

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7.6

The influence of psychological traits on the determinants of motivation

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7.7

The influence of performance attributions on the magnitude of a salesperson’s

expectancy estimates

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Management Implications

• Relationships between personal characteristics and motivation have two broad implications for managers:
• Suggest people with certain characteristics are likely to understand their jobs and companies’ policies well
• Some characteristics are related to kinds of rewards salespeople are likely to value

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Career Stages and Motivation

• Exploration – lack of assurance
• Establishment – selection of selling as an occupation and desire for career success.
• Maintenance – seeking to retain present position, high status, and achievement
• Disengagement – preparation for retirement and possible loss of self-identity

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7.1a Understanding Sales Force Role

Source: Based on information from The Enneagram Institute, visit www.enneagraminstitute.com, September 2007. Vincent Alonzo, “Role Call,” Sales and Marketing Management 153, no. 6 (June 2001), p. 34. Vincent Alonzo, “Type Casting,” Incentive 174, no. 11 (Nov 2000), p. 17.

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7.1b Understanding Sales Force Role

Source: Based on information from The Enneagram Institute, visit www.enneagraminstitute.com, September 2007. Vincent Alonzo, “Role Call,” Sales and Marketing Management 153, no. 6 (June 2001), p. 34. Vincent Alonzo, “Type Casting,” Incentive 174, no. 11 (Nov 2000), p. 17.

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Career Stages and Motivation

• Exploration – lack of assurance
• Establishment – selection of selling as an occupation and desire for career success
• Maintenance – seeking to retain present position, high status, and achievement
• Disengagement – preparation for retirement and possible loss of self-identity

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7.8

Sales Career Path

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Plateauing

• Early disengagement
• Causes
• Lack of a clear career path
• Boredom
• Failure to manage the person effectively
• Solutions
• Clearly defined career path
• Promotions within sales force
• Job environment

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7.2 Motivating Plateaued Salespeople

• Require them to account for their time
• Total compensation management
• Get them out in the field
• Positive environment
• Balance the need for information with the burden of generating it
• Hire the right people
• Spend the resources to achieve training objectives
• Ensure they have a purpose

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Solutions for the Plateaued Salesperson

• Talk with salesperson about problem
• Discuss reasons and possible solutions
• Conduct motivations sessions
• Manage, lead and communicate
• Cut salesperson’s responsibilities
• Assign to a new territory
• Inform rep on his/her responsibilities
• Provide time off

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Environment and Motivation

• Territory potential and strength of competition impact performance, perceptions, and motivation
• Understanding how and why salespeople perform differently under varying environmental circumstances guides compensation and management policies

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7.10

Influence of organizational variables on the determinants of motivation

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Supervisory Variables and Leadership

• Closeness of supervision
• Most occupations prefer relatively free from supervision
• B-2-B salespeople prefer close supervision
• Span of control – increased span of control results in decreased supervision
• Frequency of communication – increased communication means decreased role ambiguity

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Incentive and Compensation Policies

• Policies concerning higher-order rewards can influence desirability of such rewards
• Preferential treatment for “stars” may reduce morale
• The range of financial rewards may influence valences of additional financial rewards
• Earnings opportunity ratio
• Total financial compensation of the highest paid salesperson compared to that of the average in a sales force
• Higher ratio = higher valence

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Mark W. Johnston | Greg W. Marshall