The document discusses designing compensation plans for sales personnel. It covers defining the sales job, considering the company's compensation structure and patterns in the community/industry. It also discusses determining compensation levels, providing various compensation elements like fixed pay, variable pay, benefits and expenses. The document also discusses types of compensation plans, supervising sales personnel, and factors that affect motivating sales personnel.

1. •Define the Sales job : The 1st step is to reexamine the
nature of sales job. Up-to-date written job descriptions
are the logical place to start.
•Consider Company’s General Compensation
Structure : Most large companies, and many smaller
ones, use job evaluation system to determine the
relative value of individual jobs. The methods are
I. Simple Ranking
II. Grading
III. Point system
IV. Factor comparison method
V. Job evaluation & sales position

2. Designing Compensation Plans
 Consider Compensation Patterns in Community
& Industry: Because compensation levels for sales
personal are related external supply & demand factors,
it is important to consider prevailing compensation
patterns in the community & industry.
 Determine Compensation Level : Management
should determine the amount of compensation a
salesperson receive on average.
 Provide for Various Compensation Elements :
Basically, 4 elements are there
1. Fixed Element
2. Variable Element

3. Designing Compensation Plans
3. Fringe benefits
4. Reimbursement of expense
 Special Company Needs and Problems: It is often
used to increase marketing effectiveness.
 Consult the present sales force: Management
should encourage sales personnel about their
grievances in compensation plans.
 Reduce tentative plan to writing & pretest it: For
clarification & to eliminate inconsistencies the
tentative plan is put in writing.

4. Designing Compensation Plans
 Revise the plan: The plan is then revised to eliminate
trouble spots or deficiencies.
 Implement the plan and provide for follow up: At
the time the new plan is implemented, it is explained
to sales personnel and feedback is taken from them.

5. Types of Compensation Plans
 Straight Salary Plan
 Straight Commission Plan
 Combination Salary and Incentive Plan
 Use of Bonuses
 Fringe Benefits

6. Supervision of Sales Personnel
Management controls sales person through supervision.
Regardless of who does the supervising, the objective is
to improve the job performances of sales personnel.
There are some conditions under which supervision is
needed. These conditions are:
1. Sales personnel turnover rate excessive in a branch.
2. High turnover of accounts.
3. Increased complaints from customers.
4. Low ratio of order to sales call.
5. Increase ratio of selling expenses to sales in an
organizational unit

7. Supervision of Sales Personnel
Key aspects of Supervision are:-
 Effective communication with salespeople
 Clear office policies and procedures
 Regular review of the transactions and associated
documents.
 Training requirements
 Regular performance review

8. Supervision of Sales Personnel
 Qualification:- Sales supervisors are selected among
the sales force, but besides having the qualifications
they must recognize training needs, know how to
train, be patient with those who have less skill, and be
tactful in pointing out ways of doing things.
 Who should supervise?
Depending upon the company and its organization,
sales personnel may be supervised by home office
personnel, branch or district managers. In other
words, sales supervision may be either through
executives as one of their job responsibilities, or
through specialists whose jobs are mainly supervising

9. Motivating Sales Personal
Motivation is the amount of effort for the salesperson
desires to expand on the activities associated with the
sales job, such as calling on potential accounts,
planning sales presentations, and filling out reports.

10. Factors affecting motivational level
of sales personal
 Inherent nature of sales job:- Every sales job is a
succession of ups and downs, a series of experiences
resulting in alternating feeling of excitement and
depression.
 Salesperson’s boundary position and role
conflicts:- The salesperson satisfy the expectations of
the people within the company and with customers as
well.
Types of Role Conflicts:-
1. Conflict of Identification
2. Advocacy Conflict

11. Factors affecting motivational level
of sales personal
 Tendency toward apathy:- Those who year after year,
cover the same territory and virtually the same
customers, lose interest and enthusiasm.
 Maintaining a feeling to Group Identity:- The
salesperson, working alone, finds it difficult to develop
and maintain a feeling of group identity with other
company salespeople

12. Motivating Sales Personal
 Need Gratification and motivation:-Behavioral
research studies shows that all human activity –
including the salesperson’s job behavior- is directed
towards satisfying certain needs.
1. Maslow’s Hierarchy of Needs
2. Herzberg’s Two Factor Theory
3. Achievement- Motivation Theory
4. Expectancy Model

13. Motivating Sales Personal
 Interdependence and Motivation
 Motivation and Leadership
 Motivation and Communication
1. Interpersonal Contact
2. Written Communication