Presentation is loading. Please wait.

Presentation is loading. Please wait.

1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (1) 9 Motivation and Reward System Management Module 9 Motivation and Reward System Management.

Similar presentations


Presentation on theme: "1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (1) 9 Motivation and Reward System Management Module 9 Motivation and Reward System Management."— Presentation transcript:

1 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (1) 9 Motivation and Reward System Management Module 9 Motivation and Reward System Management

2 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (2) 9 Motivation and Reward Systems Motivation - Three Dimensions: –Intensity The amount of mental and physical effort put forth by the salesperson –Persistence The salesperson's choice to expend effort over a period of time –Direction The choice by salespeople of where their efforts will be spent

3 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (3) 9 Motivation and Reward Systems Motivation - Three Dimensions The motivation task is incomplete unless salespeople's efforts are channeled in directions consistent with the overall strategic role of the salesforce within the firm –Self-motivation is the ideal

4 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (4) 9 Motivation and Reward Systems Motivation and Reward Systems Intrinsic vs. Extrinsic Motivation Intrinsically Motivated –When doing the job is inherently rewarding Extrinsically Motivated –When rewards such as pay and formal recognition act as motivators

5 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (5) 9 Motivation and Reward Systems Motivation and Reward Systems Reward System Management involves the selection and utilization of organizational rewards to direct salespeople's behavior toward the attainment of organizational objectives Organizational Rewards –Those that are given in return for acceptable performance or effort; financial or nonfinancial Non-Compensation Rewards –Factors related to the work situation and well- being of each salesperson

6 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (6) 9 The Optimal Salesforce Reward System Balance of Organization, Individual, and Customer Needs

7 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (7) 9 The Optimal Salesforce Reward System From the Organization's Perspective –Provide an acceptable ratio of costs and salesforce output in volume, profit, or other objectives –Encourage specific activities consistent with the firm's overall, marketing, and salesforce objectives and strategies –Attract and retain competent salespeople, thereby enhancing long-term customer relationships –Allow the kind of adjustments that facilitate administration of the reward system.

8 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (8) 9 The Optimal Salesforce Reward System From the Organization's Perspective From Salesperson's Perspective –Expect to be treated equitably –Desire stability with incentives

9 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (9) 9 The Optimal Salesforce Reward System From the Organization's Perspective From Salesperson's Perspective From Customer's Perspective –Response to high pressure sales techniques –Require increased service/quality

10 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (10) 9 Types of Salesforce Rewards Types of Salesforce Rewards Six Most Popular Rewards (Exhibit 9.1) Pay Promotion Sense of Accomplishment Personal Growth Opportunities Recognition Job Security

11 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (11) 9 Financial Compensation Straight Salary –Advantages of Salary Plans Easy to administer Fixed costs facilitate the budgeting process Enhanced customer loyalty More control over nonselling activities –Disadvantages of Salary Plans No incentive to improve performance Often based on seniority, not merit A burden of firms in declining industries

12 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (12) 9 Financial Compensation Straight Salary Straight Commission –Commission Plan Variations Commission Base - volume or profitability Commission Rate - constant, progressive, or a combination Commission Splits - between two or more salespeople or between salespeople and the employer Commission Payout Event - when the order is confirmed, shipped, billed, paid for, or some combination of these events –Advantages of Commission Plans Income linked to results, therefore an incentive to improve results Costs reduced during slow sales periods Less operation capital required –Disadvantages of Commission Plans Less salesperson loyalty to company Less control of nonselling activities

13 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (13) 9 Financial Compensation Straight Salary Straight Commission Performance Bonuses –Group or Individual –Typically for short-term objectives

14 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (14) 9 Financial Compensation Straight Salary Straight Commission Performance Bonuses Combination Plans (Salary plus Incentive) –Financial-Compensation Mix –Advantages of Combination Plans Flexibility allows frequent reward of desired behavior May attract high-potential recruits –Disadvantages of Combination Plans Complex to administer May encourage crisis-oriented objectives

15 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (15) 9 Nonfinancial Compensation Opportunity for Promotion Sense of Accomplishment Opportunity for Personal Growth Recognition Job Security

16 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (16) 9 Sales Expenses 1.A definition of which expenses are reimbursable 2.The establishment of expense budgets 3.The use of allowances for certain expenditures 4.Documentation of expenses to be reimbursed Expense Account Padding Controls used in the sales-expense reimbursement process include:

17 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (17) 9 Additional Issues in Managing Salesforce Reward Systems Sales Contests Equal Pay Team Compensation Global Compensation Changing the Reward System

18 1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (18) 9 Guidelines for Motivating and Rewarding Salespeople 1.Recruit and select salespeople whose personal motives match the requirements and rewards of the job. 2.Attempt to incorporate the individual needs of salespeople into motivational programs. 3.Provide adequate job information and assure proper skill development for the salesforce. 4.Use job design and redesign as motivational tools. 5.Concentrate on building the self-esteem of salespeople. 6.Take a proactive approach to seeking out motivational problems and sources of frustration in the salesforce.


Download ppt "1 Copyright © 2000 by Harcourt, Inc. All rights reserved. (1) 9 Motivation and Reward System Management Module 9 Motivation and Reward System Management."

Similar presentations


Ads by Google