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Motivation, Compensation, Leadership, Motivation, Compensation, Leadership, and Evaluation of Salespeopleand Evaluation of Salespeople
Motivation, Compensation, Leadership, Motivation, Compensation, Leadership, and Evaluation of Salespeopleand Evaluation of Salespeople
Chapter
Chapter
17
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin
Chapter
Chapter
1717-3
Main TopicsMain TopicsMain TopicsMain Topics
The Tree of Business Life: ManagementMotivation of the Sales Force
The Motivation Mix: Choose Your Ingredients CarefullyCompensation Is More Than MoneyThe Total Compensation Package
Chapter
Chapter
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Main TopicsMain TopicsMain TopicsMain Topics
Nonfinancial Rewards Are Many Leadership Is Important to Success
Performance Evaluations Let People Know Where They StandSales Managers Use Technology
Chapter
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The Tree of Business Life: Management
Guided by The Golden RuleThe Golden Rule: Remember that, as a sales
manager, you impact the lives of your salespeople and their families
Help make your salespeople successful by putting their interests above your own
Remember that people come before power, influence, and wealth (PIW)
IT C
Ethi
cal Service
Builds
T r
u e
Relationships
TT T
T T T TT T T T
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Motivation of the Sales Force
Motivating salespeople at two levelsMotivation of the individual salespersonMotivation 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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The Basic Sales Management Functions
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Directing average people to perform at above-average levelsMotivationalCompensationLeadership
The Basic Sales Management Functions
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The Motivation Mix: Choose Your Ingredients Carefully
The basic compensation plan Special financial incentives Nonfinancial rewards Leadership techniques Management control procedures
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Exhibit 17-1: Sales Manager’s Motivation Mix
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Compensation Is More Than Money
Sales performance can be rewarded in three fundamental waysDirect financial rewardsCareer advancementNonfinancial compensation
Although a sales reward system is not the only means of motivating salespeople, it is the most important
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Exhibit 17-2: Examples of Various Salary Plans
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Compensation Is More Than Money, cont…
Three basic plans of financial compensationStraight salary planStraight commission planCombination plan
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Compensation Is More Than Money, cont…
Straight salary planAdvantages to the salespersonAdvantages to managementDisadvantages to the straight salary planWhen to use the straight salary plan
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Compensation Is More Than Money, cont…
Straight commission plans Three basic elements of straight commission
Pay is related directly to performance A percentage rate of commission is attached to the unit A level at which commissions begin or change is established
Drawing accounts combine the incentive of a commission plan with the security of a fixed income
Advantages of the straight commission plan Disadvantages of the commission plan Administrative problems with the commission plan
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Compensation Is More Than Money, cont…
Combination plansSalary and commissionSalary and bonus: individual bonus or group
bonusSalary, commission, and bonus: individual bonus
or group bonus
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Combination plansSalary and commissionSalary and bonus: individual bonus or group
bonusSalary, commission, and bonus: individual bonus
or group bonus
Compensation Is More Than Money, cont…
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Compensation Is More Than Money, cont…
Bonus: individual or groupAcross-the-board bonusPerformance bonusSales contests
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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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Exhibit 17-4a: Salary and Fringe Benefits for a New Representative
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Exhibit 17-4b: Salary and Fringe Benefits for a New Representative
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Nonfinancial Rewards Are Many
Achievement or recognition awards Transfer to larger, more challenging sales
territories or promotion to key account management
Sales manager’s praise
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Leadership Is Important to Success
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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Exhibit 17-5: Four Basic Leadership Styles a Sales Manager Can Select From to Influence Salespeople
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Leadership Is Important to Success, cont…
Leadership stylesStyle 1 – TellsStyle 2 – PersuadesStyle 3 – ParticipatesStyle 4 – Delegates
Choosing a leadership style On-the-job coaching
Coaching – main element is the joint sales call
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Exhibit 17-6: A Sales Manager Can Choose One of These Leadership Styles Based on the Salesperson and the Situation
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Sales Management Functions
Planning Staffing Training Directing Evaluating
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The Basic Sales Management Functions
Evaluating the past toguide the futurePerformance criteriaConducting sessions
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Performance Evaluations Let People Know Where They Stand
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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Exhibit 17-8: Quantitative and Qualitative Performance Criteria
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Performance Evaluations Let People Know Where They Stand, cont…
Conducting the evaluation sessionBoth manager and salesperson should be
prepared for the interviewBe positiveActually review performanceFinalize the performance evaluationSummarize the total performance evaluationDevelop mutually agreed-on objectivesFormalize evaluation and objectives
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Sales Managers Use Technology to:
Manage customers Manage salespeople
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The Basic Sales Management Functions, cont…
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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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Summary of Major Selling Issues, cont…
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
