Sales Force

Motivation &
Compensation
A group presentation by : Shekhar
Neha
Apsara
Dipsan
Udhaya

Motivation
What is motivation ?
Motivation is some driving force within individuals by
which they attempt to achieve some goal in order to
fulfill some need or expectation.
Motivation consists of three elements - need, drive and
goal.

How does motivation

work ?
l
Goa

Driv
e
Need

What is Sales Force Motivation ?

It

is driver within an sales people that inspires them to excel their

performance then before .
Motivating salespeople has been frustrating to sales and marketing
managers. two things are clear:
1.the job is difficult
2.there is no one simple solution
Motivation inspires performance from capable sales associates.
Motivation is necessary to retain and sustain performance.
Without motivation, sales associates will lose interest or give up loyalty
over time. However, motivation alone does not guarantee success.

Factors that influence the sales

force motivation
It is one of the most difficult task to identify
the factors that influence the sales force
motivation.
The factors that influence sale force can be
different from industry to industry.
Some of the general factors influencing the
motivation of sales force are as follows:

Factors that influence the sales

force motivation
(1)
(2)
(3)
(4)

the nature of the task,

the personality
the type of compensation plan
quality of management

Nature of task
Nature of selling differs from company to company
The clarity of the task given to sales people can affect
their motivation level
Task clarity is the degree to which there is a clear and
positive relationship between exerting effort and
attaining results

Nature of the Task..

If a sales task is unclear, selling can be frustrating.
In such a situation, the salesperson will not know
where he or she stands and will not be able to pinpoint
the results of his or her own efforts.

Personality
Managers know by instinct that personality differences
are an important determinant of on-the-job
performance.
persons need for achievement is directly related to
sales force motivation
As need for achievement increases, so do effort and
motivation.

Types of Compensation Plan

Designing an effective sales compensation program,
however, is a complex management assignment
In general, incentive pay is a more effective motivator
than straight salary.
However, the true power of incentive pay surfaces
when we take into account the nature of the sales task

Types of Compensation Plan.

If the sales task is unclear, the ability of an incentive to
motivate is significantly diminished, which suggests
that a straight salary would be more practical and less
problematic.
Sales pay must not be seen as an isolated variable but
as part of a system.
In this system, on-the-job performance is influenced
not only by the design of the pay plan but also by
characteristics of the sales task and the personality
of the salespeople.

Quality of Management

Leadership and management also plays a vital role in the motivation

of the sales staff

Goal settingSets high but attainable performance standards for

subordinates and other groups. Gives responsibility and challenging
assignments.
EvaluationProvides timely and frequent feedback to subordinates
on their progress toward established goals.
CoachingAssists the sales representative to identify training
needs and areas for improvement, particularly in regard to personal
selling skills and time management. Structures opportunities for the
application of newly learned skills. Rewards improvements.

Quality of Management...
EmpathizeShows personal concern and sensitivity to
others. Develops constructive working relationships
with subordinates. Knows when to withdraw and let the
salespeople try it on their own.
Know-howDemonstrates a thorough knowledge of
personal selling and marketing. Keeps abreast of events
both inside and outside the organization that may affect
the success of subordinates.

Compensatio
n plan

Nature of task

Motivatio
n

personality

Quality of
management

Motivational tools
1.
2.
3.
4.
5.
6.

Foster a team environment

Coach and mentor them
Create some friendly competition
Listen to their pain points
Give them what they need to succeed
Show them the money and appreciation.

Foster a team environment:

When people communicate, they can also begin to

collaborate better.

Sales conferences, group training, team building

events, social gatherings can all help.

Coach and mentor them:

Coach members of the team to help develop good skills

and drop bad habits,

Focusing employees performances,

Delivering training,

Mentoring employees growth.

Create some friendly competition:

Organize small competition with tangible rewards

Make things playful

Reward teamwork.

Listen to their pain points:

Failing to recognize that the sales force is a system,

Not using the right tools, instruments, and process to

insure objectivity,

Give them the tools they need to succeed

Plan your integration
Educate your team
Prepare your data
Transfer your data
Update & Communicate

Objective of effective
compensation plan
The ultimate goal of compensation planning is to
reward and encourage employees to do well in their
jobs
Some of the objectives of are sought to be achieved
through effective compensation planning like:
1)Entice the employees: Compensation should be high
enough to attract the best talent in an organization. If an
organization wants the service of a competent
employee, then the salaries must be high enough to
motivate them to apply and join you

Objective of effective
compensation plan
2) Retain the best talent: An employee would leave an
organization if compensation levels fall. So, it is essential to
have a proper compensation panning to retain the best talents.
3) Ensure equity: Pay should always be equal the worth of the
job of an employee. Employees doing similar jobs should be
paid equally and likewise, more qualified employees should be
paid better.
4) Reward new ideas and behaviors: Pay should reward an
employees loyalty, commitment towards work, his experience,
the amount of risk the job holds and the initiatives taken. When
companies fail to reward such contributions, employees will fall
apart.

Objective of effective
compensation plan
5) Cost control: Hiring cost should never be too high.
The compensation planning should ensure that workers
are neither overpaid nor underpaid
6) Compliance: The compensation planning and
management should invariably satisfy governmental
compliance of minimum wages, bonus, allowances,
benefits etc. Synergetic product tour.

Characteristics of an effective
compensation plan
1)Simple to understand
The plan must be simple to understand and to operate
It should involve least clerical work.
The worker should be able to know the extra payments
to be given to them.
If this method of determining wages involves difficult
calculations, then workers may find difficulty in
calculating their wages.
In spite of correct wages , there may be suspicion in the
minds of workers about wages paid to them.

Characteristics of an effective
compensation plan..
2. Just and equitable
Just and equitable system will be successful.
A worker should be awarded for the work done by
him.
This does not mean that there should be undue load on
the employers but wages paid must be commensurate
with the effort of workers.

Characteristics of an effective
compensation plan.
3. Attraction for workers
Incentive payments should be sufficient to attract workers
for improving their performance .
If the incentive is small then workers will not fell tempted
towards it.
If person is getting Rs 5600 per month as wages and is
offered Rs 45o more for raising his output, this will not be
a good incentive for him. On the other hand, if he is
offered Rs 200 to Rs 300 as extra wages then he will feel
tempted to earn. So incentive should be large enough, so
that workers are tempted to earn it.

Characteristics of an effective
compensation plan.
4. Attainable standards
The standard fixed under incentive plans be attainable
with some extra efforts.
If the standards are such that these are not attainable
even with extra effort, then workers will feel
discouraged.
They may not even try to achieve them. The standards
should be such, which may be achieved by average
workers also. A standard which may be achieved only
by few workers will not make plan ideal.

Characteristics of an effective
compensation plan.
5. Conductive to health
A scheme should not tempt workers to overstrain
them. When an incentive plan is such where workers
are required to work for long hours or expected to
work at much faster speed, then their health maybe
adversely affected.
There may be a calling on the maximum earnings by
the workers in a week or month so that they do not
overstrain themselves for longer periods.

Characteristics of an effective
compensation plan.
6. Willingness of workers
The scheme should have willing support of workers.
Before introducing an incentive scheme, it should be
discussed with workers and their viewpoint should be
incorporated as for as possible in the welfare scheme.

Characteristics of an effective
compensation plan.
7. Clarity of objectives
Management should be clear about the goals to be
achieved from the incentive schemes.
It should be properly communicated to the workers also.
The aim of such schemes may be to raise output, improve
quality of products etc. when workers are not clear about
the aims of such schemes, then they will not be able to
work for their achievement.
So, objective of incentive scheme should be decided and
made clear to all the concerned persons.

Characteristics of an effective
compensation plan.
8. Incentive for quantity and quality
The scheme should provide incentive for both quantity
and quality of production.
It should preferably be based on time study basis.
9. Standardization
It should provide basis for all incentive schemes.
All parameters like methods of working, input
materials, work place and working conditions should
be standardized.

Types of compensation plan

compensatio
n

Direct

Indirect

Types of compensation plan..

Direct
compensation

Pay
Base

Initiative

Merit

Types of compensation plan..

Indirect
compensatio
n

Benefits

Service

1. Direct Compensation
Direct compensation is the money directly paid to
employees in exchange for their labor.
It consists of:
Pay: It is wages and salaries received for performing
work.
It can be base pay and merit pay.

Base pay is hourly ,weekly , or monthly pay

employees receive in exchange for work.
Merit pay is based on performance. Those who perform
better receive merit pay.

Direct Compensation.
Incentives:

Incentives are provided for higher performance.

They can be piece wage, commission, bonus, profit
sharing, stock option.

2. Indirect Compensation:
Indirect compensation is a benefit given to an employee that
has financial value, but is not direct payment.
Benefits
They are payments in addition to pay. Employees
receive them as a continuing their employment
in the organization.
They can be following types.
i.
Pay for time not worked: It includes paid vacation,
holidays, leaves, lunch breaks, leave on death of a relatives.
ii.
Retirement benefits: It includes pension, insurance
payments, provident fund, medical care.

Indirect Compensation.
Services:

They are not paid in cash. They increase employee

well-being at no cost or at significantly reduced cost to
employees.
They can be:

Free furnished housing, special food services.

Childrens education expenses, child care facilities.

Discount on purchases, credit cards, loans.

Company car, travelling expenses like lodging,

flooding, etc.