Sales & Retail Management, VTU,Module 4

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  • 1. Sale force motivation & Compensation
    By Prof. Raghavendran V
  • 2. Nature of Motivation
    The meaning of word motivate is to Move or Activate. Motivation is an internal feeling and an energy force within sales person that drives them to behave in a certain way. It can be both the forms of Positive and Negative motivation and its effect on individuals are similar in nature but different in intensity.
    2
    Prof. Raghavendran V
  • 3. Motivation has a system orientation, which means that goal of individual is shaped by the forces within the individual and its interaction with the surrounding environments. The individual gets the feedback from the environment which either reinforces behavior or dissuades them from pursuing certain goals.
    Motivation and satisfaction, which is achieved through a compensation and rewards system are interrelated. While motivation is the drive to satisfy the goals of life, satisfaction is the experience of contentment when one particular is satisfied.
    3
    Prof. Raghavendran V
  • 4. Importance of Motivation
    Sales organizations are made of human beings working at different levels and every organization needs people in order to function.
    Motivation in itself is a highly complex activity & affected by large numbers of the factors in organization.
    Employees in an organization possess a huge amount of information based on the experiences about the structures & processes of the sales organization and market. Sales organizations serve as resource pool & talent
    4
    Prof. Raghavendran V
  • 5. The success of a sales organization depends on the ability and the style of the functioning of the sales manager to motivate the sale staff.
    They get demotivated due:
    Frequent rejections by customers,
    Lower esteem
    Customer complaints
    Nature of the job
    Frequent travelling
    Prof. Raghavendran V
    5
  • 6. The Process of motivation
    The sales manager need to understand the process of motivation & uses it to improve firm’s efficiency. He can use this to stimulate sales person to work efficiently.
    This starts when a motive prompts people to action. Motives are the primary energizer of behavior. Motives are largely subjective and represent the mental picture of the salesperson. They arise continuously and determine the general direction of the salesperson’s behavior.
    Prof. Raghavendran V
    6
  • 7. Motivation Process
    Prof. Raghavendran V
    7
    MOTIVE
    TENSION REDUCTION
    BEHAVIOR
    GOAL
  • 8. Motives & Motivational Drives
    Motives are drivers for the behavioral action of the customers. They can be classified as General, Primary and Secondary motives.
    The primary motives are more than comprehensive in nature and based on the physiological needs. It seek to reduce tension or stimulation.
    The general motives are curiosity, manipulation, activity & affection. These are unlearned drives to explore & manipulate objects.
    The secondary motives are drawn out from society & interaction of individual with the elements of society.
    Prof. Raghavendran V
    8
  • 9. Motivational Drives
    Principles
    Security
    Achievement
    Approval
    Loyalty
    Advancement
    Leadership
    Human Behavior
    Prof. Raghavendran V
    9
  • 10. Theories of Motivation
    Content theories
    Maslow's hierarchy theory
    Hertzberg’s two factor theory
    Alderfer’s ERG theory
    McGregor Theory of X and Y
    Process theories
    Equity theory
    Expectancy theory
    Reinforcement theories
    Hull’s Drive theory
    Skinner’s Reinforcement theory
    Prof. Raghavendran V
    10
  • 11. Factor’s influencing the salesperson
    There are various factors influence the motivation level of the salesperson. They can be grouped as:
    Personal characteristics
    Current job
    Career (Exploration, Establishment, Maintenance & disengagement)
    Demographic variable
    Experience and physiological variable
    Environmental Conditions
    Territory potential
    Strength of competition
    Organizational Regulatory norms
    Sales Supervision
    Span of control,
    Leadership style
    Type of communication
    Compensation plan
    Prof. Raghavendran V
    11
  • 12. Designing a Motivational Programme
    Sales manager can design a motivational programme to keep up the motivation & Morale of salesperson in the organization so that the willingness to contribute will be high over long sustained period of time in the organization. The following are the steps involved in designing the motivation programme:
    Programme Objective
    Motivational tools
    Individual Methods
    Group Methods
    Communication
    Auxiliary Environment
    Feedback
    Prof. Raghavendran V
    12
  • 13. Motivational Issues & Evolving Needs
    Prof. Raghavendran V
    13
    NEW
    EXPERIENCED
    COMPANY
    NEW
    SALES PROFESSION
    EXPERIENCED
  • 14. Sales Compensation
    Sales Organizations design compensation Plans with multiple objectives.
    One of the key objective is attract the quality salesperson.
    Improve the productivity level
    Optimizing the sales effort
    Reduces the sales expenses and production cost
    Reducing the attrition rate in the firm.
    Good rapport within the organization
    Prof. Raghavendran V
    14
  • 15. Characteristics of an effective compensation Plan
    Based on equality & equity
    Economical & Competitive
    Flexible
    Performance of the salesperson
    Prof. Raghavendran V
    15
  • 16. Factors Influencing the Design of a compensation Plan
    Financial ability of the firm
    Size of the market
    Government rules & regulations
    Nature of the product
    Educational qualifications of sales person
    Work Experience
    Prof. Raghavendran V
    16
  • 17. Types of Compensation Plan
    An effective compensation and reward system management involves selection and proper utilization of firm’s reward to direct the sales staff behavior attaining Firm’s objectives.
    Compensation is defined as Financial & Non Financial methods for the sales staff.
    Prof. Raghavendran V
    17
  • 18. Financial Compensation
    Straight Salary Plan
    Straight Commission Plan
    Bonus & Incentive
    Salary Plus Incentive Plan (Combination Plan)
    Drawing account and Commission Plan
    Allied Methods
    Prof. Raghavendran V
    18
  • 19. Non –Financial Compensation
    Promotions
    Recognition Programmes
    Fringe Benefits
    Expense Accounts
    Perks
    Sales Contests
    Prof. Raghavendran V
    19
  • 20. Steps in designing the Compensation Plan
    Determine Sales force and compensation Objectives
    Determine Major Compensation Issues
    Implement Long term & Short term compensation Plans
    Relate rewards to compensation
    Measurement of Performance
    Appraise the Compensation Plan
    Prof. Raghavendran V
    20
  • 21. Evaluation of the Sales Force
    It is important to measure and manage the performance of the salesperson. It is observed that performance measurement and evaluation is done only for difficult jobs in sales organization.
    It is crucial process of identification, measurement and management of the sales force in an organization.
    Performance appraisal is the process of evaluating the performance & qualifications of the sales force in terms of the requirements of the job to ensure effective administration, including the selection for promotion, rewards and other recognitions on the administration.
    Prof. Raghavendran V
    21
  • 22. Performance Appraisal Process
    Prof. Raghavendran V
    22
    Sales force performance appraisal process
  • 23. Performance Appraisal Process
    Appraisal Criteria
    Relative and Absolute Judgment (evaluation)
    Trait
    Behavior
    Outcome
    Performance Rating
    Forced choice scales
    Behavior Observation Scales
    Call Reports
    Silent Call Monitoring Scores
    Activity reports
    Combination methods
    Prof. Raghavendran V
    23
    Focus of Measure
  • 24. Conduct of Performance Appraisal
    Biases
    Base rate information
    Availability heuristics
    Anchoring
    Hindsight Bias
    Regression Effects
    Fundamental attribution error
    Prof. Raghavendran V
    24
  • 25. Performance Appraisal
    Individual Versus Team Appraisal
    Actual Performance
    Frequency
    Influence of External Variables
    Barriers
    Prof. Raghavendran V
    25
  • 26. Assignment Time: to be submitted by 11th October’ 2011
    Explain nature & importance of Sales Motivation.
    Explain in detail all theories of motivation. (Content, Process & Reinforcement).
    Discuss in detail of Motivational Programme
    Discover the trends in compensation plan.
    Why it is difficult to evaluate salespeople working in teams?
    Design a self evaluation form by using a rating scale for a salesperson working in education industry?
    26
    Prof. Raghavendran V
  • 27. End of the module 4
    By Prof. Raghavendran V