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Sales force management
Motivation 3/2/99 Discussion Questions What is the best way to motivate a salesforce? How can you systematically design a motivation system? Three Major Determinants of Motivation Environmental conditions The firm’s management policies compensation supervision task characteristics Personal characteristics of the salesperson Motivation Session Objectives understand the components of motivation through the expectancy-value model relate management tools to components of the expectancy-value model, to use in influencing motivational levels consider how management style and the use of various “tools” influence motivation Motivation Session Outline Locus of Control and Motivation Expectancy-Value Model of motivation what is it? Who cares? (implications of the model) Glengarry Glen Ross & the impact of the sales manager on motivation The impact of role stress Locus of Control and Motivation Locus: External vs internal attributions Stable vs unstable attributions Examples: External Stable: External Unstable: Internal Stable: Internal Unstable: The Expectancy-Value model Why are people motivated to initiate a task to choose a certain effort level to persist in a task Expectancy Principle: salespeople choose a level of effort based on the expected payoffs of alternative effort levels Most popular model of motivation (at least among sales force researchers) Expectancy-Value Model in Notation Mj=Ej x Vj where: Mj=motivational drive to achieve level j of performance (e.g sales, number of new accounts etc.) Ej =beliefs about the effort to performance linkage: perceived chances of achieving level j of performance given effort Vj = overall subjective utility (valence or value) of achieving level j of performance Examples: Ej Vj Mj Level of Performance 80% 60 48 If j=$200,000 in sales 40% 100 40 If j=$300,000 in sales 10% 80 If j=$400,000 in sales Valence/Value: Vj Valence is a composite of the utility you derive from the suboutcomes (consequences) that accompany achieving level j of performance These might include: more pay, promotion, liking & respect, lack of leisure time, personal growth security, sense of accomplishment, recognition, hurting personal life Outcomes can have negative utility/valence Obviously the list could be longer & vary across individuals 10 Implications for How to Motivate No reward is motivating if it is out of reach (low expectancy) Raising the goal (performance level j) often depresses motivation Introduces negative outcomes Depresses expectancies Can motivate by trying to induce sales people to: raise expectancy (I.e through training, encouragement) consider a negative suboutcome unlikely consider a positive suboutcome likely Add a new positive suboutcome Change their ideas about whether suboutcomes are desirable or 14 undesirable (vi: doomed strategy for the most part) Glengarry Glen Ross what is the impact of management style on the components of the expectancy value model? What motivational “tools” are used? How these tools impact motivation in the short-term? Over the long term? How these tools impact extrinsic motivations? Intrinsic motivation? 15 Motivators Positive Motivators Commission Recognition Acceptance Respect Trust Achievement Pride Negative Motivators Fear Intimidation Revenge Obligation Social Comparison (one-up) 16 Sales Manager Objectives & Tools Objectives: Increase magnitude and accuracy of expectancies Increase accuracy of instrumentalities Understand and work with valences Key: reduce role stress arising from role ambiguity & role conflict Tools: training: expectancies evaluations, reviews: expectancies, instrumentalities communication, participation: instrumentalities selection: hire SP whose Vi’s match company suboutcomes 17 How to Motivate Define each employee’s motivating factors and provide an environment that incorporates those factors Praise performance Address poor performance Set goals & clearly communicate expectations Share your vision and include your team in creating it 18 Measuring Components of the Model 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) periodic surveys can be conducted to quantify each component of the model expectancies: to what extent you believe that if you x, y will happen instrumentalities: to what extent you believe that if y happens, you’ll receive z valences for suboutcomes: how important is Quantified information is valuable at both the aggregate level and the individual level 19 Role Stress “A primary influence on how salespeople perform is their perceptions of the demands placed upon them” “A role is a prescription: it tells you the activities and behavior that are expected of anyone in a position Role partners communicate expectations pressure salespeople to meet them A role partner is anyone with a vested interest in how a salesperson does the job, such as: the boss, the customers, other executives, other salespeople and support people, people who are significant in the sales rep’s 20 personal life Role Stress (continued) Role stress is like a disease; most reps suffer complications of role stress Why? Sales is at the boundary of the firm; salespeople are boundary spanners, which means lots of role partners Salespeople often have to be creative; find solutions; reconcile needs A sales reps performance affects performance of lots of other people Sales reps personify the cruel voice of the marketplace (scapegoat- kill the messenger) Time and resource constraints necessitate tradeoffs between role partners’ expectations 21 Role Stress (continued) Day after day, salespeople grapple with the messages their role partners send them and the pressures role partners put on them Two things create role stress (create problems that eventually will make the salesperson miserable): Perceived Role Conflict Perceived Role Ambiguity 22 Perceived Role Conflict: you feel that the demands of your role partners are incompatible To make one happy, you have to upset another (perceived) Upshot: misery & poor motivation 23 Perceived Role Ambiguity: You feel you don’t have the information to cope with your job demands don’t know how to a task don’t know what role partners expect don’t know how your performance is being evaluated don’t have clear objectives SUM: unsure how you’re doing and what to next 24 How to reduce Role Stress Communicate! Give feedback! Even bad news is better than news Salespeople must have accurate expectancies & instrumentalities Training and encouragement: increase expectancies for desired levels of performance- people who believe they can, often Accept that some role stress is normal (even desirable) but be especially alert for dysfunctional levels of role stress in inexperienced people 25 Sales Manager Atmosphere Creation Traditional Approach Authoritative “management” Emphasis on rewards the manager gives out: pay promotion recognition of achievement Leading to: Motivation to work harder: intensity, persistence 26 Non-traditional atmosphere Participate leadership Emphasis on intrinsic rewards & motivation people work because selling satisfies them with: challenges pride in serving customers pride in skills “Warm Culture” informal sense of shared values identify with company long-term employment 27 Motivating A motivator is one who can understand an overall goal and inspire others to make a personal commitment to this goal ways to provide a motivating environment Participation: involvement in decisions that affect the team Environment: climate for success, creativity Recognition: giving credit, praise, rewards Knowledge: having it, communicating it Style: use appropriate style for each situation: coaching, supporting, delegating, directing 28 ... best way to motivate a salesforce? How can you systematically design a motivation system? Three Major Determinants of Motivation Environmental conditions The firm’s management policies compensation... Expectancy Principle: salespeople choose a level of effort based on the expected payoffs of alternative effort levels Most popular model of motivation (at least among sales force researchers) Expectancy-Value... Examples: Ej Vj Mj Level of Performance 80% 60 48 If j=$200,000 in sales 40% 100 40 If j=$300,000 in sales 10% 80 If j=$400,000 in sales Valence/Value: Vj Valence is a composite of the utility you