CHAPTER 17
Motivation, Compensation, Leadership, and Evaluation of
Salespeople
LECTURE OUTLINE
I. THE TREE OF BUSINESS LIFE: MANAGEMENT
B. Sales managers should do all they can to make their salespeople
II. MOTIVATION OF THE SALES FORCE
A. Two levels of motivation:
1. Individual.
B. Motivation – the arousal, intensity, direction, and persistence of
III. THE MOTIVATION MIX: CHOOSE YOUR INGREDIENTS CAREFULLY
A. The basic compensation plan.
B. Special financial incentives.
IV. COMPENSATION IS MORE THAN MONEY
A. Sales performance can be rewarded in three ways:
1. Direct financial rewards.
B. Straight salary plan.
1. The simplest.
weekly, semi-monthly, or monthly.
3. Advantages to the salesperson.
a. Security.
c. Known income.
4. Advantages to management:
a. Simple and economical to administer.
5. Disadvantages of the straight salary plan.
incentive.
b. Lowering of work norms within sales groups.
6. When to use straight salary plans:
b. Also, when management cannot effectively evaluate
C. Straight commission plans.
2. Straight commission.
a. Pay related directly to performance.
established.
3. Drawing accounts – one version combines the incentive of
4. Advantages to straight commission plans:
a. Maximum incentive for salespeople.
b. Salespeople feel productive and independent.
the order is made.
5. Disadvantages of the commission plan:
a. Uncertainty and insecurity.
d. Cost of sales.
6. Administrative problems with the commission plan:
a. Policies must be provided for each circumstance to
b. How to handle bad customer debts.
D. Combination plans – A proportion of the salesperson’s total pay is
E. Bonus: individual or group?
1. Something given in addition to what is usually earned by
2. Across-the-board bonus – money is given to all
3. Performance bonus – related to performance.
4. Sales contest – special sales programs offering
V. THE TOTAL COMPENSATION PACKAGE – The salesperson receives
numerous forms of financial compensation.
VI. NON-FINANCIAL REWARDS ARE MANY – Can be a sales award,
VII. LEADERSHIP IS IMPORTANT TO SUCCESS
A. Leadership is the process by which sales managers attempt to
B. The leader’s task and relationship behavior:
1. Two forms of behavior that leaders can use to inBuence
their salespeople:
a. Task behavior – involves the leader in describing the
b. Relationship behavior is:
(1)People oriented.
2. Four different styles of leadership were developed for
different situations.
decision, but cooperation is sought.
Style 3: Participates – sales manager and
Style 4: Delegates – salesperson makes the
3. Choosing a leadership style.
a. There is no one best way, but various techniques
b. On-the-job coaching – training someone intensively
VIII. PERFORMANCE EVALUATIONS LET PEOPLE KNOW WHERE THEY
STAND
A. Management control system – establishes performance goals,
evaluates goals compared to the salesperson’s
B. Performance evaluation – a formal, structured system of
measuring and evaluating a salesperson’s activities and
performance.
C. Reasons for performance evaluations:
performance.
D. Who should evaluate salespeople?
1. Primary evaluator should be the immediate supervisor.
E. When should salespeople be evaluated?
1. At the end of each performance cycle.
F. Performance criteria – the basis for evaluating a salesperson’s
performance. Two types:
1. Quantitative Performance Criteria – best for evaluating
performance; helps to give objective sales and operation
data; examples are:
a. Sales volume.
2. Qualitative Performance Criteria – represent the
a. Sales skills.
G. Conducting the evaluation session.
1. Both manager and salesperson should be prepared for
3. Actually reviewing performance.
4. Finalizing the performance evaluation.
H. Sales managers use technology to manage customers’ accounts.