1. 7 Salesperson Performance: Motivating the Sales Force McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

2. 7-2 Salesperson Motivators Source: HR Chally Group (2007).  Novel situations  Opportunities to meet people  Participative style  Depth of required expertise  Minimal configuration  Sharing expertise

3. 7-3  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

4. 7-4 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

5. 7.1 The psychological determinants of motivation 7-5

6. 7-6 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

7. 7-7 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

8. 7-8 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

9. 7-9 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

10. 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? The psychological determinants of motivation 7-10

11. 7-11 Personal Characteristics Affecting Motivation  Satisfaction with current rewards  Demographic variables  Job experience  Psychological variables  Personality traits  Attribution of meaning to performance

12. 7-12 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

13. 7-13 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

14. 7-14 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

15. 7-15 Psychological Traits  Affect motivation  Traits  High achievement need  Internal locus of control  Verbal intelligence  General self-esteem  Task-specific self-esteem

16. 7-16 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

17. 7-17 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

18. 7-18 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

19. 7-19 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

20. 7-20 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

21. 7-21 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