Motivation, Compensation, Leadership, and Evaluation of Salespeople - Chapter 17 of Fundamentals of Selling by Charles M. Futrell. Presented to the students of Tolani Institute of Adipur as a part of their Sales Management Course
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Motivation & Evaluation
1. Motivation &
Evaluation
Sales Management
Compiled & Presented By:
Anuj Sharma
Text Book: Fundamentals of Selling –
Customers for life through services by
Charles M. Futrell (12th Edition)
Pre-Class Reading – Chapter 17 Presented to the students of Tolani
Institute of Management Studies
2. Motivation of the Sales Force
Motivation of the individual salesperson
Motivation of the entire sales force
3. The Motivation Mix
The Basic
Compensation
Plan
Special Financial
Incentives
Non Financial
Rewards
Leadership
Techniques
Management
Control
Procedures
•Salary
•Commissions
•Fringe Benefits
•Contests
•Bonuses
•Trips
•Achievement Awards
•Challenging Work Assignments
•Psychological rewards
Praise
Recognition
•Style
•Personal Contact Methods
(Feedback)
National, regional, district meetings
Individual Meetings
Letters, telephone calls.
Joint sales calls
•Performance Evaluation
•Quotas
•Reports
4. Compensation is more than money
Direct Financial Rewards
Career Advancement
Nonfinancial compensation
5. Straight Salary Plans
Advantages to Salesperson
◦ Provides a sense of security
◦ Preferred by new recruits & inexperienced salespeople
Advantages to Management
◦ Simple & Economical to administer
◦ Can give selling duties that may not immediately result
in sales
◦ Less resistance to reassignment of accounts
◦ Salespeople less likely to pressure customers
◦ Better sales cost projection and budgeting
6. Straight Salary Plans
Disadvantages
◦ Lack of direct monetary incentive
◦ No difference between high & low performers
◦ Lower work norms
◦ Average job – Meet or not greatly exceed sales quotas
◦ Salary a fixed expense – Cannot be adjusted for
downturns in economy
7. Straight Salary Plans
When to use?
◦ Jobs involving non selling activities
◦ Performance evaluation is difficult
◦ Routine selling jobs
◦ Jobs requiring lengthy pre-sale negotiations and post-
sale services
◦ During training – Salary first year and then commission
8. Commission Plans
Straight Commission Plan
◦ If you do not sell anything, you do not earn anything
◦ Single commission rates
◦ Multiple commission rates
◦ Progressive
◦ Regressive
◦ Drawing Accounts
9. Commission Plans
Advantages to Salesperson
◦ Maximum incentive for salespeople
◦ Salespeople use their sales time wisely
◦ Perform at maximum capacity
◦ Only their abilities limit earning potential
◦ Management cannot make arbitrary earning decisions
◦ They are in business for themselves
Advantages to Management
◦ Selling costs are kept in proportion to sales
◦ Helpful for a new firm or a start-up
10. Commission Plans
Disadvantages
◦ Discourages people from seeking sales careers
◦ Not feasible for “Big Ticket” Sales
◦ Salespeople develop little loyalty for company
◦ Use high pressure techniques to close sales
◦ Reluctant to split territories
◦ Issues in customer selection
◦ Cost of sales may be greater
◦ Salespeople are hired without proper selection
Administrative Problems
◦ Multiple Salespeople – Fair distribution of commission
◦ Bad debts on sale accounts
11. Combination Plans
Salary & Commission
Salary & Bonus – Individual or Group
Salary, commission and bonus
12. Combination Plans
Advantages
◦ Motivates the sales force
◦ Attracts and holds good people
◦ Can direct the salesforce in profitable direction
13. Bonus – Individual or Group
Across-the-board bonus
Performance Bonus
Sales Contests
14. Nonfinancial Rewards
Achievement or Recognition Awards
Transfer to larger, more challenging
territories
Promoted to key account managers
Sales manager’s praise
16. Performance Evaluation
What is it?
Reasons for performance evaluation
Who should evaluate salespeople?
When should salespeople be evaluated?
Performance Criteria
◦ Quantitative Criteria
◦ Qualitative Criteria
17. Conducting the Evaluation Session
Both manager & salesperson should be
prepared
Be Positive
Actually Review Performance
Finalize the Performance Evaluation
Summarize the Total Performance Evaluation
Develop Mutually Agreed-on Objectives
Formalize evaluation and Objectives
18. Sales Management Quiz
1A – Communication is a major problem
1B – Communication is a symptom of other
issues.
19. Sales Management Quiz
2A – Words are more important than
actions
2B – Actions are more important than
words
20. Sales Management Quiz
3A – Listening is more important than
telling
3B – Telling is more important than
listening
21. Sales Management Quiz
4A – Human Relations is more important
than logic
4B – Logic is more important than listening
22. Sales Management Quiz
5A – Effective communication is persuasive
5B – Effective communication is
understanding