Motivation & Evaluation
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The document provides an overview of motivation and evaluation in sales management, detailing various compensation plans including salary, commission, and bonuses, along with their advantages and disadvantages. It discusses leadership techniques and nonfinancial rewards aimed at motivating sales personnel and the importance of performance evaluation. Additionally, it highlights common communication issues within sales management and provides quizzes on effective communication principles.
Motivation & Evaluation
- 1. Motivation & Evaluation Sales Management Compiled & Presented By: Anuj Sharma Text Book: Fundamentals of Selling – Customers for life through services by Charles M. Futrell (12th Edition) Pre-Class Reading – Chapter 17 Presented to the students of Tolani Institute of Management Studies
- 2. Motivation of the Sales Force Motivation of the individual salesperson Motivation of the entire sales force
- 3. The Motivation Mix The Basic Compensation Plan Special Financial Incentives Non Financial Rewards Leadership Techniques Management Control Procedures •Salary •Commissions •Fringe Benefits •Contests •Bonuses •Trips •Achievement Awards •Challenging Work Assignments •Psychological rewards Praise Recognition •Style •Personal Contact Methods (Feedback) National, regional, district meetings Individual Meetings Letters, telephone calls. Joint sales calls •Performance Evaluation •Quotas •Reports
- 4. Compensation is more than money Direct Financial Rewards Career Advancement Nonfinancial compensation
- 5. Straight Salary Plans Advantages to Salesperson ◦ Provides a sense of security ◦ Preferred by new recruits & inexperienced salespeople Advantages to Management ◦ Simple & Economical to administer ◦ Can give selling duties that may not immediately result in sales ◦ Less resistance to reassignment of accounts ◦ Salespeople less likely to pressure customers ◦ Better sales cost projection and budgeting
- 6. Straight Salary Plans Disadvantages ◦ Lack of direct monetary incentive ◦ No difference between high & low performers ◦ Lower work norms ◦ Average job – Meet or not greatly exceed sales quotas ◦ Salary a fixed expense – Cannot be adjusted for downturns in economy
- 7. Straight Salary Plans When to use? ◦ Jobs involving non selling activities ◦ Performance evaluation is difficult ◦ Routine selling jobs ◦ Jobs requiring lengthy pre-sale negotiations and post- sale services ◦ During training – Salary first year and then commission
- 8. Commission Plans Straight Commission Plan ◦ If you do not sell anything, you do not earn anything ◦ Single commission rates ◦ Multiple commission rates ◦ Progressive ◦ Regressive ◦ Drawing Accounts
- 9. Commission Plans Advantages to Salesperson ◦ Maximum incentive for salespeople ◦ Salespeople use their sales time wisely ◦ Perform at maximum capacity ◦ Only their abilities limit earning potential ◦ Management cannot make arbitrary earning decisions ◦ They are in business for themselves Advantages to Management ◦ Selling costs are kept in proportion to sales ◦ Helpful for a new firm or a start-up
- 10. Commission Plans Disadvantages ◦ Discourages people from seeking sales careers ◦ Not feasible for “Big Ticket” Sales ◦ Salespeople develop little loyalty for company ◦ Use high pressure techniques to close sales ◦ Reluctant to split territories ◦ Issues in customer selection ◦ Cost of sales may be greater ◦ Salespeople are hired without proper selection Administrative Problems ◦ Multiple Salespeople – Fair distribution of commission ◦ Bad debts on sale accounts
- 11. Combination Plans Salary & Commission Salary & Bonus – Individual or Group Salary, commission and bonus
- 12. Combination Plans Advantages ◦ Motivates the sales force ◦ Attracts and holds good people ◦ Can direct the salesforce in profitable direction
- 13. Bonus – Individual or Group Across-the-board bonus Performance Bonus Sales Contests
- 14. Nonfinancial Rewards Achievement or Recognition Awards Transfer to larger, more challenging territories Promoted to key account managers Sales manager’s praise
- 15. Leadership
- 16. Performance Evaluation What is it? Reasons for performance evaluation Who should evaluate salespeople? When should salespeople be evaluated? Performance Criteria ◦ Quantitative Criteria ◦ Qualitative Criteria
- 17. Conducting the Evaluation Session Both manager & salesperson should be prepared Be Positive Actually Review Performance Finalize the Performance Evaluation Summarize the Total Performance Evaluation Develop Mutually Agreed-on Objectives Formalize evaluation and Objectives
- 18. Sales Management Quiz 1A – Communication is a major problem 1B – Communication is a symptom of other issues.
- 19. Sales Management Quiz 2A – Words are more important than actions 2B – Actions are more important than words
- 20. Sales Management Quiz 3A – Listening is more important than telling 3B – Telling is more important than listening
- 21. Sales Management Quiz 4A – Human Relations is more important than logic 4B – Logic is more important than listening
- 22. Sales Management Quiz 5A – Effective communication is persuasive 5B – Effective communication is understanding
- 23. Sales Management Quiz 6A – Disagreements represent communication problems 6B – Disagreements represent conflict problems
- 24. Sales Management Quiz - Results 1B 2B 3A 4A 5B 6B Score of 40 or more – You have an effective communication philosophy
- 25. Thank You!!! 25 Grazie Gracias Domo Arigato Merci Danke Obrigado Mahalo शुक्रिया