Sales Force Motivation

Topic 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 Sales Force Motivation
Learning Objectives
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.
After reading this chapter, you should be
able to do the following:
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
3.
Reinforcement
oriented
theories
2.
Process
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

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 theory
Maslows Hierarchy of Needs
Maslows 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 Maslows five levels of needs?
higher-
level
needs
lower-
level
needs
Maslows 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
Maslows
hierarchy is
one of
several
motivation
theories that
explain
human
behavior.
Existence, Relatedness,
Growth (ERG) Theory

1.
Existence
3.
Growth
2.
Relatedness
ERG theory
similar to Maslows
social and esteem
needs
similar to Maslows
physiological and
safety needs
similar to Maslows self-
actualization needs
Needs Theory
1.
Need for
power
3.
Need for
affiliation
2.
Need for
achievement
Needs theory
the strong urge to
master and
accomplish difficult
tasks
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
Dual Factor Theory
(aka Motivation-Hygiene Theory)
1.
Motivation
factors
2.
Hygiene
factors
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.
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 =


E
i
= Expectancy is the salespersons
perception that exerting a given level of effort
will lead to higher achievement.
I
j
= Instrumentality is the salespersons
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 jk
j
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 salespersons 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
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
Using Rewards and Incentive Programs for
Sales Force Motivation
5.
Recognition
4.
Intrinsic
rewards
3.
Promotion
opportunities
2.
Sales incentive
programs
1.
Extrinsic
rewards
Reward and
incentive
programs
salary, stock
options, profit
sharing
cash, travel,
awards
recognition,
plaques, rings
respect, status,
control,
accomplishment
career path with
promotions
Sales Force Motivation
Strategies and Tools
1.
Sales contests
2.
Sales meetings
Motivation
strategies
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
Additional Perspectives in Twenty-First
Century Sales Force Motivation
3.
Learning versus
performance
orientation
2.
Organizational
climate
1.
Organizational and
job commitment
4.
Salespersons
career cycle
Additional
motivation
perspectives
Organizational and Job Commitment
1.
Organizational
commitment
2.
Job commitment
Commitment
the degree of
involvement (high
or low) salespeople
have in their job
identifying with and
internalizing the
companys values
and goals and
desiring to stay a
viable member of
the organization
Organizational Climate
3.
Organizational
characteristics
2.
Leadership
characteristics
1.
Job
characteristics
4.
Work group
characteristics
Organizational
climate
company philosophy
about managing
salespeople
formal and informal
relationships among the
salespeople
role perceptions,
opportunities, and
problems in the job
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
2.
Performance
orientation
Learning versus
performance
orientation
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.
Salespersons Career Cycle
3.
Maturity or
maintenance
stage
2.
Development or
establishment
stage
1.
Preparation or
exploration stage
4.
Decline or
disengagement
stage
Career stages
Salespeople hold on to
what has already been
achievedposition, 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'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.
Ethical Situation: What Would You Do?
Discussion Question
You have been recently appointed regional sales manager for your company. Youre thrilled with
this promotion, especially because you are the youngest regional sales manager in the company,
so its 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 youre
comfortable working with. Both have worked at the company for over twenty years, so theyve
developed strong social networks within the company. Youre 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 dont like to have such
experienced, well-connected subordinates who might be able to go around you to talk to your
bosses. Therefore, youve decided to start making a case to replace these two district managers,
and one of the first things youre going to do is significantly increase the sales quotas for their
districts.