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Different types of motivational schemes for sales person
DIFFERENT TYPES OF MOTIVATIONAL
SCHEMES FOR SALES PERSON
YOGESH SINGH – 53
RAJESH SHETTY – 47
ISMILE SHAIKH – 43
SAVIO FERNANDES – 12
GAURI JOSHI – 57
KHUSALI MANDALIA – 28
SANJANA IYER - 19
• What a Sales Manager can do are things
that tap into a Sales persons motivations
• By knowing what’s important to them and using this to tap into their
Importance of motivating salespeople is recognised, because financial performance of the company
depends upon the achievement of sales volume objective
Motivation is the effort the salesperson makes to complete various activates of the sales job
Majority of salespeople are not adequately motivated, 10-15% of them are self motivated.
A sales manager must continually look for ways to motivate a sales staff. Salespeople are subject to
extra pressures like quotas, market changes and new territories. If you are a sales manager looking to
create a more motivating workplace, recognize that you have the ability to improve the work
environment and increase your employee's sales. Proper motivation is equal parts support, recognition
and reward. Learn to listen to your sales team and adjust their goals according to what matters most to
them. Find out how to motivate your sales team.
SELECTING A MIX OF MOTIVATIONAL TOOLS
Understanding between sales manager and salespeople (team) should be positive
For designing or selecting a mix of motivational tools, salespeople, and the company
management becomes necessary
Motivational tools are divided into two (1) Financial and (2) Non-Financial.
Financial compensation is the most widely used tool of motivation, as sales people give
highest value to it.
HERE ARE 7 POPULAR WAYS TO TAP INTO
YOUR SALES TEAMS MOTIVATIONS
Know what your team considers important
Communicate with your Sales Team
Set Goals that challenge your Sales Team
Get them into Action
Provide the necessary tools for your team
Manage the less-than-stellar performers
Give credit to whom it is due
Maslow’s Hierarchy of Needs
Hertzberg’s Dual Factor Theory
Motivation Effort Performance Reward Satisfaction
HERZBERG'S MOTIVATION-HYGIENE THEORY
AND DUAL-FACTOR THEORY
The two-factor theory (also known as Herzberg's motivation-hygiene theory and dual-factor
theory) states that there are certain factors in the workplace that cause job satisfaction, while
a separate set of factors cause dissatisfaction.
OBJECTIVES OF COMPENSATION PLAN FROM
SALESPERSON'S POINT OF VIEW
To have both regular and incentive income
o Regular income by fixed salary to take care of living expenses
o Incentive income for above average performance
To have simple a plan, for easy understanding
o This is in conflict with the objective of flexibility
To have a fair payment plan
o Fair or just payment to all salespeople is ensured by selecting measurable and controllable
Widely used elements are : Salaries, commissions, bonuses, fringe benefits or perquisites
Expense allowances or reimbursements like travel, lodging etc are not included
Basic Compensation: Straight Salary, Straight Commission, Combination of salary and /or
68% companies use combination plan and balance 32% firms use straight salary or straight
Therefore, management has to offer the following two
categories of incentives to motivate employees:
Commission / Incentive Sense of accomplishment
Bonus Personal growth
Fringe benefit Recognition
Combination Job Security
Sales Contests Sales meeting
STRAIGHT SALARY PLAN
100% compensation is salary which is fixed component
No content for sales performance or salespeople’s efforts
This plan is suitable for sales trainees, missionary salespeople, and when a company wants
to introduce a new product or enter a new territory
Salespeople get secured income to cover living expenses
Salespeople willing to perform non-selling activities like payment collection, report writing
Simple to administrator
No financial incentive to salespeople for more efforts and better performance. Hence,
superior performance may not be achieved
May be a burden for few and loss making firms
Incentive The need of incentives can be many:-
To increase productivity,
To drive or arouse a stimulus work,
To enhance commitment in work performance,
To psychologically satisfy a person which leads to job satisfaction,
To shape the behaviour or outlook of subordinate towards work,
To inculcate zeal and enthusiasm towards work,
To get the maximum of their capabilities so that they are exploited and utilized maximally.
BONUS, PROFIT SHARING, FRINGE BENEFITS
Bonus: Paying bonus is a method that a company adopts to reward special contribution & as
in incentive to superior performance.
Profit sharing: Many experts in the field of sales management disapprove extending profit
sharing to salespeople. For once, companies agree with them. There may be an argument in
favour of such a payment if no bonus plan is established for excellence in sales performance.
Fringe Benefits: Fringe benefits have become a fascinating subject & an item considerable
expense to organisations. The costs of fringes can be as high as 30% of direct compensation
expense depending on what benefits are offered and whether a portion of the expense is
shared with the employee.
MANAGING PEOPLE - NON-FINANCIAL
METHODS OF MOTIVATION
Job enlargement involves adding extra, similar, tasks to a job. In job enlargement, the job
itself remains essentially unchanged. However, by widening the range of tasks that need
to be performed, hopefully the employee will experience less repetition and monotony.
With job enlargement, the employee rarely needs to acquire new skills to carry out the
A possible negative effect is that job enlargement can be viewed by employees as a
requirement to carry out more work for the same pay!
Job rotation involves the movement of employees through a range of jobs in order to
increase interest and motivation.
For example, an administrative employee might spend part of the week looking after the
reception area of a business, dealing with customers and enquiries. Some time might then
be spent manning the company telephone switchboard and then inputting data onto a
Job rotation may offer the advantage of making it easier to cover for absent colleagues,
but it may also reduce' productivity as workers are initially unfamiliar with a new task. Job
rotation also often involves the need for extra training.
NON-FINANCIAL METHODS OF MOTIVATION
Job enrichment attempts to give employees greater responsibility by increasing the range
and complexity of tasks they are asked to do and giving them the necessary authority. It
motivates by giving employees the opportunity to use their abilities to the
fullest. Successful job enrichment almost always requires further investment in employee
Team working and empowerment
Empowerment involves giving people greater control over their working lives. Organising
the labour force into teams with a high degree of autonomy can achieve this. This means
that employees plan their own work, take their own decisions and solve their own
problems. Teams are set targets to achieve and may receive rewards for doing so.
Empowered teams are an increasingly popular method of organising employees at work.
Security of service- Job security is an incentive which provides great motivation to employees.
If his job is secured, he will put maximum efforts to achieve the objectives of the enterprise.
This also helps since he is very far off from mental tension and he can give his best to the
Praise or recognition- The praise or recognition is another non- financial incentive which
satisfies the ego needs of the employees. Sometimes praise becomes more effective than any
other incentive. The employees will respond more to praise and try to give the best of their
abilities to a concern.
Suggestion scheme- The organization should look forward to taking suggestions and inviting
suggestion schemes from the subordinates. This inculcates a spirit of participation in the
employees. This can be done by publishing various articles written by employees to improve
the work environment which can be published in various magazines of the company. This also
is helpful to motivate the employees to feel important and they can also be in search for
innovative methods which can be applied for better work methods. This ultimately helps in
growing a concern and adapting new methods of operations.
NON-FINANCIAL METHODS OF MOTIVATION
COMPENSATING THE SALESFORCE
A good compensation plan should consider objectives from the company’s and salespeople’s
Objectives of compensation plan from the company’s viewpoint
To attract, retain & motivate competent salespeople.
To control salespeople activities
To be competitive, yet economical: it is difficult to balance these two objectives
To be flexible to adapt to new products, changing markets, and differing territory sales