1. McGraw-Hill/Irwin Copyright 2006 by The McGraw-Hill Companies, Inc.

2. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 7 Salesperson Performance: Motivating the Sales Force

3. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-3 Learning Objectives Understand the process of motivation Discuss the effect of personal characteristics on salesperson motivation Understand how an individual’s career stage influences motivation Discuss the effect of environmental factors on motivations Discuss the effect of factors inside the company on motivation

4. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-4 Psychological Process of Motivation Motivation is an individual’s choice to: –Initiate action on a certain task –Expend a certain amount of effort on that task –Persist in expending effort over a period of time

5. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-5

6. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-6 Bases for Motivation Expectancies – the perceived linkages between more effort and achieving improved performance Instrumentalities – the perceived relationship between improved performance and receiving increased rewards Valence for rewards – the perceived attractiveness or intrinsic value the rewards the salesperson might receive

7. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-7 Expectancy A salesperson’s perceived link between job effort and achieved performance Estimates the probability that increased effort will lead to improved performance Accuracy of expectancies is based on one’s understanding of the relationship between effort and achievement Magnitude of expectancies is the perceptual value assigned to an expectancy based on the ability to control the required performance

8. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-8 McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-8

9. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-9 McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-9

10. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-10

11. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-11 Instrumentalities Link job performance and available rewards. Estimate of the likelihood that an improvement in performance will lead to a specific reward. Accuracy of Instrumentalities - based on the perceptual clarity of understanding the relationship between improvement, achievement and available rewards Magnitude of Instrumentalities - an estimate of the intrinsic value of firm’s compensation plan

12. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-12

13. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-13

14. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-14 Valences for Rewards Measure perceptions of the 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 desired and most effective for motivation varies per individual Satisfaction with current rewards depends upon perceived value

15. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-15 Personal Characteristics Affecting Motivation Individual satisfaction with current rewards Demographic variables Job experience Psychological variables –personality traits and attribution of meaning to performance

16. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-16 Satisfaction Workers currently dissatisfied with their rewards value lower-order rewards most highly –Maslow’s hierarchy of needs –Herzberg’s theory of motivation –Alderfer’s existence and growth theory High-order rewards will be valued more highly after lower-order needs for rewards have been satisfied Salespeople satisfied with their current income (a lower-order reward) assign lower valences to earning more pay

17. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-17 Demographic Characteristics Older, more experienced salespeople obtain higher levels of low-order rewards Satisfaction with the current level of lower- order rewards may also be influenced by the demands and responsibilities the sales rep must satisfy with those rewards Individuals with more formal education are more likely to desire opportunities for higher-order rewards

18. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-18

19. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-19 Job Experience More experience provides –clearer idea of how expending effort affects performance –understanding of how superiors evaluate performance –how certain performance leads to rewards Magnitude of expectancy perceptions relates to experience.

20. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-20 Psychological Traits Motivation seems to be affected by psychological traits. Strong achievement needs coincide with higher valences for higher-order rewards Self-esteem, perceived competence, and ability to perform job activities relate positively to the magnitude of expectancy estimates

21. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-21

22. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-22 Performance Attributions People try to identify and understand the causes of major events and outcomes in their lives Stable internal factors – unlikely to change much in the near future Unstable internal factors – vary from time to time Stable external factors – e.g., the nature of the task or competitive situation in a particular territory Unstable external factors – may change next time

23. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-23

24. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-24 Management Implications Relationships between characteristics and motivation levels have two broad implications for sales managers: –They suggest people with certain characteristics are likely to understand their jobs and their companies’ policies especially well –Some personal characteristics are related to the kinds of rewards salespeople are likely to value and find motivating

25. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-25

26. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-26 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

27. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-27 Causes of Plateauing Lack of a clear career path Boredom Failure to manage the person effectively

28. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-28 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

29. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-29 Impact of Environment on Motivation Variations in territory potential and strength of competition constrain ability to achieve high levels of performance Understanding how and why salespeople perform differently under varying environmental circumstances is useful to sales managers

30. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-30

31. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-31 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

32. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-32 Incentive and Compensation Policies Policies concerning higher-order rewards can influence the desirability of such rewards Preferential treatment for “stars” may reduce morale The range of financial rewards currently received may influence the valences of additional financial rewards Earnings opportunity ratio –The ratio of the total financial compensation of the highest paid salesperson to that of the average in a sales force –higher ratio equals a higher valence

33. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-33 Key Terms motivation expectancies –accuracy of expectancy estimates –magnitude of expectancy estimates instrumentalities –accuracy of instrumentality estimates –magnitude of instrumentality estimates valences for rewards performance attributions –stable –unstable –internal –external career stages –exploration –establishment –maintenance –disengagement plateauing earnings opportunity ratio

34. McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. 7-34 Mark W. Johnston Rollins College Greg W. Marshall Rollins College