Sales Force Management 11th Edition Mark W. Johnston Greg W. Marshall Routledge 2013

Implementation of the Sales Program Part 2 Implementation of the Sales Program Routledge 2013

Salesperson Performance: Motivating the Sales Force Chapter 7 Salesperson Performance: Motivating the Sales Force Routledge 2013

Salesperson Motivators Novel and non-routine situations Seeing meeting people as opportunities Participative style Depth of required expertise Avoid or minimize confrontation Sharing expertise Routledge 2013

Learning Objectives 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 Routledge 2013

The Psychological Process of Motivation Motivation is an 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 Routledge 2013

The Psychological Determinants of Motivation Exhibit 7.1 The Psychological Determinants of Motivation Routledge 2013

Major Components of 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 Routledge 2013

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 Routledge 2013

Exhibit 7.2 Important Questions and Management Implications of Salespeople’s Expectancy Estimates Routledge 2013

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 Routledge 2013

Factors Influencing the Motivation Process Exhibit 7.3: Factors Influencing the Motivation Process Routledge 2013

Exhibit 7.4 Important Questions and Management Implications of Salespeople’s Instrumentality Estimation Routledge 2013

Exhibit 7.4 Important Questions and Management Implications of Salespeople’s Instrumentality Estimation Routledge 2013

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 Routledge 2013

Technology: New Technology is a Great Motivator Money is a primary motivator, but not the only or necessarily the most effective one Research suggests that technology is one of the most effective motivators Specifically the iPad Effective for consumers and employees Sales professionals indicate that new technologies like the iPad generate more interest and raise awareness of the sales programs New technology is highly effective with younger sales people who are less motivated by money than older colleagues Routledge 2013

Can the Motivation Model Predict Effort and Performance? Research supports the validity of expectancy models of motivation like the models depicted in Exhibits 7.1 and 7.3 Sales Managers need to know how determinants of motivation are affected by: Differences in personal characteristics Environmental conditions The organization’s policies and procedures Routledge 2013

The Impact of a Salesperson’s Personal Characteristics on Motivation Satisfaction with current rewards Demographic variables Job experience Psychological variables Personality traits Attribution of meaning to performance Routledge 2013

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 Routledge 2013

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 Routledge 2013

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 Routledge 2013

Psychological Traits Affect motivation Traits High achievement need Internal locus of control Verbal intelligence General self-esteem Task-specific self-esteem Routledge 2013

Influence of Demographic Characteristics on Valence for Rewards Exhibit 7.5 Influence of Demographic Characteristics on Valence for Rewards Routledge 2013

Exhibit 7.6 The influence of Psychological Traits on the Determinants of Motivation Routledge 2013

Performance Attributions Stable Internal Factors that are unlikely to change much in the near future, such as personal skills and abilities Unstable Internal Factors that may vary from time to time, such as the amount of effort expended or mood at the time Stable External Factors such as the nature of the task or the competitive situation in a particular territory Unstable External Factors that might change next time, such as assistance from an unusually aggressive advertising campaign or good luck Routledge 2013

Exhibit 7.7 The Influence of Performance Attributes on the Magnitude of a Salesperson’s Expectancy Estimates Routledge 2013

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 Routledge 2013

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 Routledge 2013

Leadership: How to Lead a Pack of Alpha Dogs Suggestions for managers of alpha dogs: Look for ways to have authentic, one-on-one conversations with employees. Generally, alphas are more likely to listen when they know their voices are being heard as well. Remember that it’s about serving the company and its people. Don’t make customers pay for a misguided attempt at making things easier for the manager. Look for efficiencies to free up to add value to the role. Be an A player. Talented alpha employees pride themselves on being passionate and innovative. Make sure to bring passion to the table; look for areas to explore and add a level of personal challenge to the job in the manner expected from employees Routledge 2013

Exhibit 7.8 Sales Career Path Routledge 2013

Problems of the Plateaued Salesperson 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 Routledge 2013

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 Routledge 2013

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 Routledge 2013

Innovation: Money Isn’t Everything Research shows organizations that have reward systems in place outperform organizations that do not have a rewards system McKinsey reports suggest businesses have cut back on both financial and non-financial incentives Companies are working to understand what motivates employees beyond financial compensation Many companies have emphasized recognition than reward. Routledge 2013

The Impact of Environmental Conditions on 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 Routledge 2013

Exhibit 7.10 Influence of Organizational Variables on the Determinants of Motivation Routledge 2013

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 Routledge 2013

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 Routledge 2013

Routledge 2013