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

How???

• By knowing what’s important to them and using this to tap into their

motivation

MOTIVATION

INTRODUCTION

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

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MOTIVATIONAL THEORIES Maslow’s Hierarchy of Needs

Hertzberg’s Dual Factor Theory

Motivation Effort Performance Reward Satisfaction

MASLOW'S HIERARCHY OF NEEDS

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 factors

COMPENSATION MIX 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 bonus

68% companies use combination plan and balance 32% firms use straight salary or straight commission

Therefore, management has to offer the following two categories of incentives to motivate employees:

Monetary incentives-

Non-monetary incentives-

MONETARY NON-MONETARY

Salary Promotion

Commission / Incentive Sense of accomplishment

Bonus Personal growth

opportunities

Fringe benefit Recognition

Combination Job Security

Sales Contests Sales meeting

Sales Training

Programmes

Job Enrichment

Supervision

Appreciation

STRAIGHT SALARY PLAN

Characteristics:

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

Advantages:

Salespeople get secured income to cover living expenses

Salespeople willing to perform non-selling activities like payment collection, report writing

Simple to administrator

Disadvantages:

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

INCENTIVES

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

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 additional task.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

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 database.

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

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 training.

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 enterprise.

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 viewpoint

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 potentials.