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Posters work
"Winners must have two things; definite goals and a burning desire to achieve them."
Action
Result
The companys system for motivating and rewarding its salespeople has been very successful. Five people qualified for the Porsche in 2000, and eight qualified in 2001. The company has grown to more than $100 million in revenues in just four years
Motivation
The force within us that activates our behavior. It is a function of three distinct components, Intensity, Direction, and Persistence.
Motivation
Intensity
Direction
Persistence
Motivation - Intensity
Intensity refers to the amount of mental and physical effort put forth by the salesperson.
Motivation
Intensity
Direction
Persistence
Motivation - Direction
The extent to which an individual determines and chooses efforts focused on a particular goal.
Motivation
Intensity
Direction
Persistence
Motivation - Persistence
The extent to which the goal-directed effort is put forth over time.
Motivation
Intensity
Direction
Persistence
Why not?
Intrinsic
When doing the job is inherently motivating ever happen?
Extrinsic
When rewards such as pay and formal recognition act as motivators
Motivation
Noncompensation rewards:
Those beneficial factors related to the work situation and well-being of each salesperson. Provide adequate resources to do the job. Allowing the people control over their own activities.
3.
4.
Provides an acceptable ratio of costs and sales force output in volume, profit, or other objectives Encourages specific activities consistent with the firm's overall, marketing, and sales force objectives and strategies Attracts and retains competent salespeople, thereby enhancing long-term customer relationships Allows the kind of adjustments that facilitate administration of the reward system.
Intrinsic
Sense of Accomplishment Personal Growth Opportunities Job security
Extrinsic
Pay Promotion Recognition
Motivation
Disadvantages
- Straight commission plans contribute little to company loyalty. - Problems may also arise if commissions are not limited by an earnings cap. 2/3 of firms with salary plus bonus impose caps but only 1/3 of those using salary plus commission plans do
3. Commission splits between two or more salespeople or between salespeople and the employer
4. Commission payout event when the order is confirmed, shipped, billed, paid for, or some combination of these events
Progressive rates:
Rates that increase as salespeople reach prespecified targets.
Regressive rates:
Rates that decline at some predetermined point.
Disadvantages
- It may be difficult to determine a formula for calculating bonus achievement if the objective is expressed in subjective terms. - If salespeople do not fully support the established objective, they may not exert additional effort to accomplish the goal.
Disadvantages
- Combination pay plans are more complex and difficult to administer. - A common criticism of combination pay plans is that they tend to produce too many salesforce objectives.
Nonfinancial Compensation
Opportunity for Promotion:
The ability to move up in an organization along one or more career paths
Sense of Accomplishment:
The internal sense of satisfaction from successful performance Sales managers should facilitate salespeoples ability to feel this a sense of accomplishment
Nonfinancial Compensation
Opportunity for Personal Growth:
Access to programs that allow for personal development (e.g., tuition reimbursement, leadership development seminars)
Recognition:
The informal or formal acknowledgement of a desired accomplishment
Job Security:
A sense of being a desired employee that comes from consistent exceptional performance
Sales Expenses
Controls used in the sales expense reimbursement process include:
1. 2. 3. 4. A definition of which expenses are reimbursable The establishment of expense budgets The use of allowances for certain expenditures Documentation of expenses to be reimbursed
5. Ensure that sales contest objectives are clear, realistically attainable, and quantifiable to allow performance assessment.
Easy Check
Law firm Akin & Smith requires its employees to check in and out from their desks at an electronic finger-sensor. This enables the firm to know exactly how long lunch breaks are for employees. Such electronic tracking systems are becoming increasingly common. Advocates say this prevents employees from padding their work sheets and helps identify the few truly slothful workers. But critics claim that such intense monitoring of on-site presence can actually interfere with productivity, leaving less room for creativity and individual differences in the way people get their work done. Costs v Benefits
$59k
$38k
Rewarding salespeople
I've found salespeople fall into three categories. First, there are the hotshots -- the super salespeople who have all the answers, who claim to know more about your industry than you do, and who are impossible to teach or control. They thrive on commissions and don't want to be part of anyone's team. The second group consists of entrepreneurs, that is, salespeople who really want to be in business for themselves. They are also motivated by sales commissions, because they like to be independent and they aren't planning to stick around anyway. You may be able to convert some of them, but the majority will leave eventually and start their own companies. That is their destiny, and there's nothing you can do about it.
Rewarding salespeople
Then there's the third group, which is the largest -- people who do sales for a living simply because they like the work and they're good at it. They have no hidden agenda. They are motivated by the same things that motivate other employees. They just happen to sell. These people don't need to be on commission. Yes, they want to be compensated fairly, but they also want what most other people want -- to be part of a team. They want to belong. Inc, May 2003 | By: Norm Brodsky
Rewarding salespeople
So we start new salespeople with what they're used to: salary and commission. After two years, we know whom we want to keep. I'll then go to the person and say, "Listen, you've been here two years. We want you to be here forever. We'll buy out your commission and raise your salary, so you won't lose any income. In return, you'll get stability. Do you think you're going to have a good year? I'm willing to guarantee that you'll have a good year. And if you really do have a good year, I'll guarantee that next year will be even better. Inc, May 2003 | By: Norm Brodsky