17-1
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
17-2
Chapter
17
Motivation, Compensation,
Leadership, and Evaluation
of Salespeople
McGraw-Hill/Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
17-3
Chapter
17
Motivation of the Sales Force
The Motivation Mix: Choose Your Ingredients
Carefully
Compensation Is More Than Money
The Total Compensation Package
Nonfinancial Rewards Are Many
McGraw-Hill/Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
17-4
Chapter
17
Leadership Is Important to Success
Performance Evaluations Let People Know
Where They Stand
Sales Managers Use Technology
McGraw-Hill/Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
17-5
Motivation of the Sales Force
Motivating salespeople at two levels
Motivation of the individual salesperson
Motivation of the entire sales force
Motivation is the arousal, intensity, direction, and
persistence of effort directed toward job tasks
over a period
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
The Motivation Mix: Choose Your
Ingredients Carefully
17-6
The basic compensation plan
Special financial incentives
Nonfinancial rewards
Leadership techniques
Management control procedures
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Compensation Is More Than
Money
17-7
Sales performance can be rewarded in three
fundamental ways
Direct financial rewards
Career advancement
Nonfinancial compensation
Although a sales reward system is not the only
means of motivating salespeople, it is the most
important
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Compensation Is More Than
Money cont…
17-8
Three basic plans of financial compensation
Straight salary plan
Advantages to the salesperson
Advantages to management
Disadvantages to the straight salary plan
When to use the straight salary plan
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Compensation Is More Than
Money cont…
17-9
Straight commission plans
Two basic types
Straight commission
Draw against commission
Three basic elements
Pay is related directly to a performance
A percentage rate of commission is attached to the unit
A level at which commissions begin or change is
established
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Compensation Is More Than
Money cont…
17-10
Drawing accounts
Advantages of straight commission plans
Disadvantages of the commission plan
Administrative problems with the commission plan
Combination plans
Salary and commission
Salary and bonus: individual bonus or group bonus
Salary, commission, and bonus: individual bonus or
group bonus
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Compensation Is More Than
Money cont…
17-11
Bonus: individual or group
Across-the-board bonus
Performance bonus
Sales contests
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
17-12
The Total Compensation Package
People choose a sales career for both nonfinancial
and financial reasons
The salesperson receives numerous forms of
nonfinancial compensation
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
17-13
Nonfinancial Rewards Are Many
Achievement or recognition awards
Transfer to larger, more challenging sales territories
or promoted to key account managers
Sales manager’s praise
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Leadership Is Important to
Success
17-14
Leadership
The leader’s task and relationship behavior
Task behavior involves the leader in describing the
duties and responsibilities of an individual or group
Relationship behavior is people-oriented
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Leadership Is Important to
Success cont…
17-15
Leadership styles
Style 1—tells
Style 2—persuades
Style 3—participates
Style 4—delegates
Choosing a leadership style
On-the-job coaching
Coaching
Main element is the joint sales call
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Performance Evaluations Let
People Know Where They Stand
17-16
Management control system
Performance evaluation—what is it?
Reasons for performance evaluation
Who should evaluate salespeople?
When should salespeople be evaluated?
Performance criteria
Quantitative performance criteria
Qualitative performance criteria
Conducting the evaluation session
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Performance Evaluations Let People
Know Where They Stand cont…
17-17
Conducting the evaluation session
Both manager and salesperson should be prepared
for the interview
Be positive
Actually review performance
Finalize the performance evaluation
Summarize the total performance evaluation
Develop mutually agreed-on objectives
Formalize evaluation and objectives
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17-18
Sales Managers Use Technology
To manage customers
To manage salespeople
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
17-19
Summary of Major Selling Issues
An important challenge of the sales manager is to
motivate salespeople using financial and
nonfinancial methods
Most firms today use a combination of salary and
financial incentives rather than straight salary or
straight commission plans
The sales manager needs to understand the
principles of leadership and apply them to
salespeople based on their individual
personalities and territorial situations
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Summary of Major Selling Issues
cont…
17-20
The performance of sales personnel is evaluated
by comparing their quotas and objectives to
actual sales and job activities to determine their
success
To effectively evaluate salespeople, managers
should develop procedures to ensure fair
treatment
McGraw-Hill/Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
