Sales force-managment

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Sales force-managment

  1. 1. Motivation
  2. 2. Discussion Questions <ul><li>What is the best way to motivate a salesforce? </li></ul><ul><li>How can you systematically design a motivation system? </li></ul>
  3. 3. Three Major Determinants of Motivation <ul><li>Environmental conditions </li></ul><ul><li>The firm’s management policies </li></ul><ul><ul><li>compensation </li></ul></ul><ul><ul><li>supervision </li></ul></ul><ul><ul><li>task characteristics </li></ul></ul><ul><li>Personal characteristics of the salesperson </li></ul>
  4. 4. Motivation Session Objectives <ul><li>understand the components of motivation through the expectancy-value model </li></ul><ul><li>relate management tools to components of the expectancy-value model, to use in influencing motivational levels </li></ul><ul><li>consider how management style and the use of various “tools” influence motivation </li></ul>
  5. 5. Motivation Session Outline <ul><li>Locus of Control and Motivation </li></ul><ul><li>Expectancy-Value Model of motivation </li></ul><ul><ul><li>what is it? </li></ul></ul><ul><ul><li>Who cares? (implications of the model) </li></ul></ul><ul><li>Glengarry Glen Ross & the impact of the sales manager on motivation </li></ul><ul><li>The impact of role stress </li></ul>
  6. 6. Locus of Control and Motivation <ul><li>Locus: </li></ul><ul><ul><li>External vs. internal attributions </li></ul></ul><ul><ul><li>Stable vs. unstable attributions </li></ul></ul><ul><li>Examples: </li></ul><ul><ul><li>External Stable: </li></ul></ul><ul><ul><li>External Unstable: </li></ul></ul><ul><ul><li>Internal Stable: </li></ul></ul><ul><ul><li>Internal Unstable: </li></ul></ul>
  7. 7. The Expectancy-Value model <ul><li>Why are people motivated </li></ul><ul><ul><li>to initiate a task </li></ul></ul><ul><ul><li>to choose a certain effort level </li></ul></ul><ul><ul><li>to persist in a task </li></ul></ul><ul><li>Expectancy Principle: salespeople choose a level of effort based on the expected payoffs of alternative effort levels </li></ul><ul><li>Most popular model of motivation (at least among sales force researchers) </li></ul>
  8. 8. Expectancy-Value Model in Notation <ul><li>M j =E j x V j where: </li></ul><ul><li>M j =motivational drive to achieve level j of performance (e.g. sales, number of new accounts etc.) </li></ul><ul><li>E j =beliefs about the effort to performance linkage: perceived chances of achieving level j of performance given effort </li></ul><ul><li>V j = overall subjective utility (valence or value) of achieving level j of performance </li></ul>
  9. 9. Examples:
  10. 10. Valence/Value: V j <ul><li>Valence is a composite of the utility you derive from the suboutcomes (consequences) that accompany achieving level j of performance </li></ul><ul><li>These might include: </li></ul><ul><ul><li>more pay, promotion, liking & respect, lack of leisure time, personal growth </li></ul></ul><ul><ul><li>security, sense of accomplishment, recognition, hurting personal life </li></ul></ul><ul><li>Outcomes can have negative utility/valence </li></ul><ul><li>Obviously the list could be longer & vary across individuals </li></ul>
  11. 11. V j =  (I ij x V i ) V j = expected overall utility to an individual of achieving performance level j I ij = beliefs about the performance to suboutcomes linkages: the individuals subjective probability that achieving performance level j would create suboutcome I (instrumentalities) Example: 30% chance that selling $300K (performance level j) would get one a promotion (suboutcome I) V i = the utility an individual derives from suboutcome I (e.g., a promotion) Note: this can be negative
  12. 12. That’s nice, but who cares? <ul><li>Nobody thinks like this (it’s too complicated) </li></ul><ul><li>But model holds up well in field testing (good “as if” model) </li></ul><ul><li>Explains up to 40% of variance in performance </li></ul>
  13. 13. Expectancy-Value Model Advantages <ul><li>Model is a handy way to structure a messy question </li></ul><ul><li>Forces you to project o each individual’s underlying beliefs (expectancies) and needs/wants (values) </li></ul><ul><li>Different people can exhibit the same level of motivation for very different reasons </li></ul><ul><li>Nice vocabulary to talk about motivation </li></ul>
  14. 14. Implications for How to Motivate <ul><li>No reward is motivating if it is out of reach (low expectancy) </li></ul><ul><li>Raising the goal (performance level j) often depresses motivation </li></ul><ul><ul><li>Introduces negative outcomes </li></ul></ul><ul><ul><li>Depresses expectancies </li></ul></ul><ul><li>Can motivate by trying to induce sales people to: </li></ul><ul><ul><li>raise expectancy (I.e. through training, encouragement) </li></ul></ul><ul><ul><li>consider a negative suboutcome unlikely </li></ul></ul><ul><ul><li>consider a positive suboutcome likely </li></ul></ul><ul><ul><li>Add a new positive suboutcome </li></ul></ul><ul><ul><li>Change their ideas about whether suboutcomes are desirable or undesirable (vi: doomed strategy for the most part) </li></ul></ul>
  15. 15. Glengarry Glen Ross <ul><li>what is the impact of management style on the components of the expectancy value model? </li></ul><ul><li>What motivational “tools” are used? </li></ul><ul><li>How do these tools impact motivation in the short-term? Over the long term? </li></ul><ul><li>How do these tools impact extrinsic motivations? Intrinsic motivation? </li></ul>
  16. 16. Motivators <ul><li>Positive Motivators </li></ul><ul><ul><li>Commission </li></ul></ul><ul><ul><li>Recognition </li></ul></ul><ul><ul><li>Acceptance </li></ul></ul><ul><ul><li>Respect </li></ul></ul><ul><ul><li>Trust </li></ul></ul><ul><ul><li>Achievement </li></ul></ul><ul><ul><li>Pride </li></ul></ul><ul><li>Negative Motivators </li></ul><ul><ul><li>Fear </li></ul></ul><ul><ul><li>Intimidation </li></ul></ul><ul><ul><li>Revenge </li></ul></ul><ul><ul><li>Obligation </li></ul></ul><ul><ul><li>Social Comparison (one-up) </li></ul></ul>
  17. 17. Sales Manager Objectives & Tools <ul><li>Objectives: </li></ul><ul><ul><li>Increase magnitude and accuracy of expectancies </li></ul></ul><ul><ul><li>Increase accuracy of instrumentalities </li></ul></ul><ul><ul><li>Understand and work with valences </li></ul></ul><ul><li>Key: </li></ul><ul><ul><li>reduce role stress arising from role ambiguity & role conflict </li></ul></ul><ul><li>Tools: </li></ul><ul><ul><li>training: expectancies </li></ul></ul><ul><ul><li>evaluations, reviews: expectancies, instrumentalities </li></ul></ul><ul><ul><li>communication, participation: instrumentalities </li></ul></ul><ul><ul><li>selection: hire SP whose Vi’s match company suboutcomes </li></ul></ul>
  18. 18. How to Motivate <ul><li>Define each employee’s motivating factors and provide an environment that incorporates those factors </li></ul><ul><li>Praise performance </li></ul><ul><li>Address poor performance </li></ul><ul><li>Set goals & clearly communicate expectations </li></ul><ul><li>Share your vision and include your team in creating it </li></ul>
  19. 19. Measuring Components of the Model <ul><li>May be done informally for small sales forces, but beware of biases (e.g. we believe what we want to believe; we think everyone else is like we are) </li></ul><ul><li>periodic surveys can be conducted to quantify each component of the model </li></ul><ul><ul><li>expectancies: to what extent do you believe that if you do x, y will happen </li></ul></ul><ul><ul><li>instrumentalities: to what extent do you believe that if y happens, you’ll receive z </li></ul></ul><ul><ul><li>valences for suboutcomes: how important is .. </li></ul></ul><ul><li>Quantified information is valuable at both the aggregate level and the individual level </li></ul>
  20. 20. Role Stress <ul><li>“ A primary influence on how salespeople perform is their perceptions of the demands placed upon them” </li></ul><ul><li>“ A role is a prescription: </li></ul><ul><ul><li>it tells you the activities and behavior that are expected of anyone in a position </li></ul></ul><ul><li>Role partners </li></ul><ul><ul><li>communicate expectations </li></ul></ul><ul><ul><li>pressure salespeople to meet them </li></ul></ul><ul><li>A role partner is anyone with a vested interest in how a salesperson does the job, such as: </li></ul><ul><ul><li>the boss, the customers, other executives, other salespeople and support people, people who are significant in the sales rep’s personal life </li></ul></ul>
  21. 21. Role Stress (continued) <ul><li>Role stress is like a disease; most reps suffer complications of role stress </li></ul><ul><li>Why? </li></ul><ul><ul><li>Sales is at the boundary of the firm; salespeople are boundary spanners, which means lots of role partners </li></ul></ul><ul><ul><li>Salespeople often have to be creative; find solutions; reconcile needs </li></ul></ul><ul><ul><li>A sales reps performance affects performance of lots of other people </li></ul></ul><ul><ul><li>Sales reps personify the cruel voice of the marketplace (scapegoat- kill the messenger) </li></ul></ul><ul><ul><li>Time and resource constraints necessitate tradeoffs between role partners’ expectations </li></ul></ul>
  22. 22. Role Stress (continued) <ul><li>Day after day, salespeople grapple with the messages their role partners send them and the pressures role partners put on them. </li></ul><ul><li>Two things create role stress (create problems that eventually will make the salesperson miserable): </li></ul><ul><ul><li>Perceived Role Conflict </li></ul></ul><ul><ul><li>Perceived Role Ambiguity </li></ul></ul>
  23. 23. Perceived Role Conflict: <ul><li>you feel that the demands of your role partners are incompatible. To make one happy, you have to upset another (perceived). </li></ul><ul><li>Upshot: misery & poor motivation </li></ul>
  24. 24. Perceived Role Ambiguity: <ul><li>You feel you don’t have the information to cope with your job demands </li></ul><ul><ul><li>don’t know how to do a task </li></ul></ul><ul><ul><li>don’t know what role partners expect </li></ul></ul><ul><ul><li>don’t know how your performance is being evaluated </li></ul></ul><ul><ul><li>don’t have clear objectives </li></ul></ul><ul><ul><li>SUM: unsure how you’re doing and what to do next </li></ul></ul>
  25. 25. How to reduce Role Stress <ul><li>Communicate! Give feedback! </li></ul><ul><li>Even bad news is better than news </li></ul><ul><li>Salespeople must have accurate expectancies & instrumentalities </li></ul><ul><li>Training and encouragement: increase expectancies for desired levels of performance- people who believe they can, often do </li></ul><ul><li>Accept that some role stress is normal (even desirable) </li></ul><ul><li>but be especially alert for dysfunctional levels of role stress in inexperienced people </li></ul>
  26. 26. Sales Manager Atmosphere Creation <ul><li>Traditional Approach </li></ul><ul><ul><li>Authoritative “management” </li></ul></ul><ul><ul><li>Emphasis on rewards the manager gives out: </li></ul></ul><ul><ul><ul><li>pay </li></ul></ul></ul><ul><ul><ul><li>promotion </li></ul></ul></ul><ul><ul><ul><li>recognition of achievement </li></ul></ul></ul><ul><li>Leading to: </li></ul><ul><ul><li>Motivation to work harder: intensity, persistence </li></ul></ul>
  27. 27. Non-traditional atmosphere <ul><li>Participate leadership </li></ul><ul><li>Emphasis on intrinsic rewards & motivation </li></ul><ul><li>people work because selling satisfies them with: </li></ul><ul><ul><li>challenges </li></ul></ul><ul><ul><li>pride in serving customers </li></ul></ul><ul><ul><li>pride in skills </li></ul></ul><ul><li>“ Warm Culture” </li></ul><ul><ul><li>informal </li></ul></ul><ul><ul><li>sense of shared values </li></ul></ul><ul><ul><li>identify with company </li></ul></ul><ul><ul><li>long-term employment </li></ul></ul>
  28. 28. Motivating <ul><li>A motivator is one who can understand an overall goal and inspire others to make a personal commitment to this goal </li></ul><ul><li>5 ways to provide a motivating environment </li></ul><ul><ul><li>Participation: involvement in decisions that affect the team </li></ul></ul><ul><ul><li>Environment: climate for success, creativity </li></ul></ul><ul><ul><li>Recognition: giving credit, praise, rewards </li></ul></ul><ul><ul><li>Knowledge: having it, communicating it </li></ul></ul><ul><ul><li>Style: use appropriate style for each situation: </li></ul></ul><ul><ul><ul><li>coaching, supporting, delegating, directing </li></ul></ul></ul>

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