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Motivation, Compensation, Leadership, and Evaluation of Sales People

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Chapter 17 Motivation, Compensation, Leadership, and Evaluation of Sales People 17-* Summary of Major Selling Issues, cont The performance of sales personnel is ... – PowerPoint PPT presentation

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Title: Motivation, Compensation, Leadership, and Evaluation of Sales People


1
Chapter
17
  • Motivation, Compensation, Leadership, and
    Evaluation of Sales People

2
17
Chapter
17-2
3
Main Topics
  • The Tree of Business Life Management
  • Motivation of the Sales Force
  • The Motivation Mix Choose Your Ingredients
    Carefully
  • Compensation Is More Than Money
  • The Total Compensation Package

4
Main Topics
  • Nonfinancial Rewards Are Many
  • Leadership Is Important to Success
  • Performance Evaluations Let People Know Where
    They Stand
  • Sales Managers Use Technology

5
The Tree of Business Life Management
T
  • Guided by The 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)

T
T
Service
Ethical
T
T
T
T
T
T
T
T
Builds
T r u e
Relationships
T
C
I
6
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

7
The Basic Sales Management Functions
8
The Basic Sales Management Functions
  • Directing average
  • people to perform at
  • above-average levels
  • Motivational
  • Compensation
  • Leadership

9
The Motivation Mix Choose Your Ingredients
Carefully
  • The basic compensation plan
  • Special financial incentives
  • Nonfinancial rewards
  • Leadership techniques
  • Management control procedures

10
Exhibit 17-1 Sales Managers Motivation Mix
11
Compensation Is More Than Money
  • 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

12
Exhibit 17-2 Examples of Various Salary Plans
13
Compensation Is More Than Money, cont
  • Three basic plans of financial compensation
  • Straight salary plan
  • Straight commission plan
  • Combination plan

14
Compensation Is More Than Money, cont
  • Straight salary plan
  • Advantages to the salesperson
  • Advantages to management
  • Disadvantages to the straight salary plan
  • When to use the straight salary plan

15
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

16
Compensation Is More Than Money, cont
  • Combination plans
  • Salary and commission
  • Salary and bonus individual bonus or group bonus
  • Salary, commission, and bonus individual bonus
    or group bonus

17
Compensation Is More Than Money, cont
  • Bonus individual or group
  • Across-the-board bonus
  • Performance bonus
  • Sales contests

18
The Total Compensation Package
  • People choose a sales career for both
    nonfinancial and financial reasons
  • The salesperson receives numerous forms of
    nonfinancial compensation

19
Exhibit 17-4a Salary and Fringe Benefits for a
New Representative
20
Exhibit 17-4b Salary and Fringe Benefits for a
New Representative
21
Nonfinancial Rewards Are Many
  • Achievement or recognition awards
  • Transfer to larger, more challenging sales
    territories or promotion to key account
    management
  • Sales managers praise

22
Leadership Is Important to Success
  • Leadership
  • The leaders 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

23
Exhibit 17-5 Four Basic Leadership Styles a
Sales Manager Can Select From to Influence
Salespeople
24
Leadership Is Important to Success, cont
  • 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

25
Exhibit 17-6 A Sales Manager Can Choose One of
These Leadership Styles Based on the Salesperson
and the Situation
26
Sales Management Functions
  • Planning
  • Staffing
  • Training
  • Directing
  • Evaluating

27
The Basic Sales Management Functions
  • Evaluating the past to guide the future
  • Performance criteria
  • Conducting sessions

28
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

29
Exhibit 17-8 Quantitative and Qualitative
Performance Criteria
30
Performance Evaluations Let People Know Where
They Stand, cont
  • 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

31
Sales Managers Use Technology to
  • Manage customers
  • Manage salespeople

32
The Basic Sales Management Functions, cont
33
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

34
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
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