Module 14 Motivation

Factors that Affect Motivation

(i) Market conditions
(ii) Related management policies and programmes within the company
(iii) Different personal characteristics of the people to be motivated

The Psychological process of Motivation

Motivation generally refers to an individual’s choice to :
(i) initiate a certain task
(ii) expend a certain amount of effort on that task
(iii) persist in expending effort over a period of time

Motivation is generally viewed as the amount of effort the salesperson decides to expend
on each activity or task associated with the job. This may include calling on new
accounts, developing sales presentations, and filling out reports.

The psychological determinants of motivation include :

Valence for reward
Instrumentality
Expectancy

(Please refer to flow chart in the module)

Expectancies are the sales person’s perceptions of the link between job effort and
performance. Specifically, an expectancy is the person’s estimate of the probability that
expending effort on some task will lead to improved performance on a dimension.

When attempting to motivate salespeople, sales managers should be concerned with two
aspects of their subordinate’s performance :
- magnitude
- accuracy

The magnitude of a salesperson’s perceptions indicates the degree to which that person
believes expending effort on the job activities will influence ultimate job performance.
Other things being equal, the larger a salesperson’s expectancy perceptions, the more
willing the salesrep is to devote effort to the job in hopes of bettering performance.

The accuracy of a salesperson’s expectancy perceptions refers to how clearly the rep
understands the relationship between effort expended on a task and the resulting
achievement on some performance dimension. When salesperson’s perceptions are
inaccurate they are likely to misallocate job efforts. They spend too much time and
energy on activities that have little impact on performance and not enough on activities
with a greater impact. Consequently, some authorities refer to attempts to improve the
accuracy of expectancy estimates as “trying to get salespeople to work smarter rather
than harder”.

Working smarter requires that a salesperson have an accurate understanding of what

activities are most critical – and therefore should receive the greatest effort - for
concluding a sale. Of course, a single activity might be carried out in a number of ways.
Therefore, working smarter also requires an ability to adapt the techniques used to the
needs and preferences of a given buyer. Motivating a salesperson to expend more effort
on inappropriate activities or approaches can worsen performance and lead to great
frustration within the salesforce.

Personal and organisational characteristics affect the magnitude and accuracy of the
salesperson’s expectancy perceptions. Managers must consider these factors when
deciding on supervisory policies, compensation and incentive plans so that their
subordinates’ expectancies will be as large and as accurate as possible.

Instrumentalities – perceived link between Performance and Rewards

Instrumentalities are the individual’s perceptions of the link between job performance and various rewards.
Specifically, an instrumentality is a sales person’s estimate of the probability that an improvement in
performance on some dimension will lead to a specific increase in a particular reward. The reward may be
more pay, winning a sales contest, or promotion to a better territory.

Sales managers should be concerned with both the magnitude and the accuracy of their
subordinates’ instrumentalities. When the magnitude of a salesperson’s instrumentality
estimates is relatively large, the sales rep believes there is a high probability that
improved performance will lead to more rewards. Consequently, the sale srep will be
more willing to expend the effort necessary to achieve better performance.

The true link between performance and rewards in a firm is determined by management’s
policies about how sales performance is evaluated and what rewards are conferred for
various levels of performance. Sometimes, however, a firm’s evaluation and reward
policies may be inaccurately perceived by its salespeople. They may devote too much
attention to activities or objectives that are relatively unimportant to management, and
they may ultimately become disillusioned with their inability to attain certain rewards.

Besides the firm’s compensation policies, other organisational factors and the personal
characteristics of the salespeople can influence both the magnitude and accuracy of their
instrumentality estimates.

Valence for Rewards

Valences are salespeople’s perceptions of the desirability of receiving increased amounts of the rewards
they might attain as a result of improved performance.

Are some rewards consistently valued more highly than others?

It is normally assumed that monetary rewards are the most highly valued and motivating
rewards. Recognition and other psychological rewards are less valued and spur additional
sales effort only under certain circumstances. This assumption has been based largely on
the perceptions of sales managers rather than on any evidence obtained from the sales
people themselves.

However, surveys conducted among employees in other occupations often find that
increased pay is not always the most highly desired reward.

It is also argued that linking pay or other financial incentives to performance can have a
negative effect on employee motivations over time. When pay is tied to performance,
employees become less interested in what they are doing and more interested in simply
capturing the reward. Intrinsic motivation is eaten away by extrinsic motivators like
commissions and incentive contests and employee creativity and the quality of work may
suffer as a result.
It may be concluded in view of these contradictory findings that on average, salespeople
place a higher value on receiving more pay than any other reward including intrinsic
rewards like feelings of accomplishment or opportunities of personal growth.

However, no universal statement can be made about what kinds of rewards are most
desired by salespeople and most effective for motivating them. Salespeople’s valences for
rewards are likely to be influenced by their satisfaction with the rewards they are
currently receiving. Their satisfaction with current rewards, in turn, is influenced by their
personal characteristics and by the compensation policies and management practices of
the firm.

Can the Motivation Model Predict Salesperson Effort and Performance?

Motivation is only one determinant of job performance. Thus, it seems inappropriate to
use only motivation to predict differences in job performance among workers.

The Impact of a Salesperson’s Characteristics on Motivation

People with different personal characteristics have divergent perceptions of the links between effort and
performance (expectancies) and between performance and rewards (instrumentalities). They are also likely
to have different valences for rewards they might obtain through improved job performance. The personal
characteristics that influence motivation include :
- The individual’s satisfaction with current rewards
- Demographic variables
- Job experience
- Psychological variables – particularly the salesperson’s personality traits and
attributions about why the performance has been good or bad.

Many of the personal characteristics change and interact with one another as a
salesperson moves through various career stages.

Satisfaction
The relationship between satisfaction and valence is different for rewards that satisfy lower-order needs (eg.
Pay and job security) than for jobs that satisfy higher-order needs (promotions, recognition, opportunities
for personal growth, self-fulfilment). Maslow’s theory, Herzberg’s theory and Alderfer’s existence,
relatedness and growth theory, all suggest that lower-order rewards are valued most highly by workers
currently dissatisfied with their attainment of those rewards. In other words, the more dissatisfied a
salesperson is with current pay, job security and other rewards related to lower-order needs, the higher the
valence attached to increases in their rewards. In contrast, as salespersons become more satisfied with their
attainment of lower order rewards, the value of further increases in those rewards declines.

The above named theories of motivation suggest that high-order rewards are not valued
highly by salespeople until they are relatively satisfied by their lower-order rewards. The
greater the salesperson’s satisfaction with lower order rewards, the higher the valence of
increased attainment of high-order rewards.

The most controversial aspect of Maslow’s and Alderder’s theories is the proposition that
high-order rewards have increasing marginal utility. The more satisfied a salesperson is
with the high-order rewards received from the job, the higher the value the sales rep
places on further increases in those rewards.

Demographic Characteristics
Demographic characteristics such as age, family size, education, etc also affect a salesperson’s valence
rewards. This can be partly attributed to the fact that people with different characteristics tend to attain
different levels of rewards and are therefore likely to have different levels of satisfaction with their current
rewards.

Generally, older, more experienced salespeople obtain higher levels of lower-order

rewards (eg. Higher pay, a better territory) than newer members of the salesforce. Thus, it
could be expected that more experienced sales people are more satisfied with their lower-
order rewards. Consequently, they should also have lower valences for lower-order
rewards and higher valences for higher order rewards than younger and inexperienced
salespeople.

A sales person’s satisfaction with lower order rewards may also be influenced by the
demands and responsibilities the sales reps must satisfy with those rewards (eg. Family
responsibilities, etc).

Finally, individuals with more formal education are more likely to desire opportunities
for personal growth, career advancement, and self-fulfillment than those with less
education. Consequently, highly educated salespeople are likely to have higher valences
for higher-order rewards.

Job Experience
Experienced salespeople are likely to have a clear idea about how expending effort on particular tasks
affects performance. Experienced salespeople are also likely to understand better how their superiors
evaluate performance and how particular types of performance are rewarded in the company. Consequently,
a positive relationship is likely between the years a salesperson has spent on the job and the accuracy of the
rep’s expectancy and instrumentality perceptions.

In addition, the magnitude of a salesperson’s expectancy perceptions may be affected by

experience. As they gain experience, salespeople have opportunities to sharpen their
selling skills; and they gain confidence in their ability to perform successfully. As a
result, experienced salespeople are likely to have larger expectancy estimates than
inexperienced ones.

Psychological Traits
Various traits can influence the magnitude and accuracy of a person’s expectancy and instrumentality
estimates, as well as valences for various rewards. These traits include:
- high need of achievement
- internal locus of control
- verbal intelligence
- general self-esteem
- task-specific self-esteem

People with strong achievement needs are likely to have higher valences for such higher-
order rewards as recognition, personal growth, and feeling of accomplishment. This is
particularly true when they see their jobs as being relatively difficult to perform
successfully.

Sales people with high internal locus of control are likely to have relatively high
expectancy and instrumentality estimates and vice versa.

Intelligence is positively related to feelings of internal control. Those with relatively high
level of intelligence – particularly – verbal intelligence are especially likely to understand
their jobs and their companies’ reward policies more quickly and accurately. Thus, their
instrumentality and expectancy estimates are likely to be more accurate.
Finally, a worker’s general feeling of self-esteem and perceived competence and ability
to perform job activities (task-specific self-esteem) are both positively related to the
magnitude of expectancy estimates. Since such people believe they have the talents and
abilities to be successful, they are likely to see a strong relationship between effort
expended and good performance. Also, people with high levels of self-esteem are likely
to attach greater importance to, and receive more satisfaction from good performance.
Consequently, such people probably have higher valences, for the higher-order, intrinsic
rewards attained from successful job performance.

Performance Attributions
A good performance could be attributed to :
(i) Stable Internal factors that are unlikely to change much in the near future, such as
personal skills and abilities.
(ii) Unstable internal factors that may vary from time to time, such as the amount of
effort expended or mood at the time
(iii) Stable External factors such as the nature of the task or the competitive situation
in a particular territory
(iv) Unstable external factors that might change next time, such as assistance from an
unusually aggressive advertising campaing or good luck.

The nature of the salesperson’s job performance together with the kind of causes to which
the rep attributes that performance, can affect the individual’s expectancy estimates
concerning the likelihood that increased effort will lead to improved performance in the
future.

Expectancy estimates are likely to increase if recent successful sales performance is

attributed to either stable or unstable internal cause or to stable external causes. For
instance, sales people are likely to attach even higher expectancies to future performance
where they take credit for past performance, either as a result of superior skill (stable
internal cause) or personal effort (unstable internal cause). Sales person’s expectancies
are also likely to increase where past success is attributed to a perception that the task is
relatively easy (stable external cause). However, if past successful performance is
attributed to an unstable external cause that could change in th next period – such as good
luck- there is no basis for sales persons to revise their expectancy estimates in any
systematic way.

Again, if the sales rep attributes poor performance to stable causes that cannot be
changed in the foreseeable future, such as low ability (stable internal cause) or a difficult
competitive environment (stable external cause), the sales rep’s expectancy estimates are
likely to be lower. However, if poor performance is attributed to an unstable internal
cause – such as not expending sufficient effort to be successful, the sales person’s
expectancies could actually increase.
Management Implications
- The relationship between sales person’s personal characteristics and motivation suggests that
people with certain characteristics are likely to understand their jobs and their companies’
policies better. They also should perceive higher expectancy and instrumentality links. Such
people should be easier to train and be motivated to expend greater effort and achieve better
performance. Therefore, as researchers and managers gain a better understanding of these
relationships, it may be possible to develop improved selection criteria for hiring salespeople
who are easy to train and motivate.
 - Some personal characteristics are related to the kinds of rewards salespeople are likely to value
and find motivating. This suggests sales managers should examine the characteristics of their
salespeople and attempt to determine their relative valences for various rewards when designing
compensation and incentive programmes. Also, as the demographic characteristics of a
salesforce change, the manager should be aware that salesperson’s satisfaction with rewards and
their valence for future rewards may also change.

CAREER STAGES AND SALES PERSON’S MOTIVATION

Career Stages
Sales people go through 4 stages during their careers :
- Exploration
- Establishment
- Maintenance
- Disengagement

Exploration Stage :
People in the earliest stage of their careers are often unsure about whether selling is the most appropriate
occupation for them to pursue and whether they can be successful salespeople. Also, underdeveloped skills
and a lack of knowledge about their roles tend to make people at this early stage among the poorest
performers in the salesforce. Thus, people in the exploratory stage tend to have low psychological stage tend
to have low psychological involvement with their job and low job satisfaction. This can cause some people
to become discouraged and quit and others to be terminated if their performance does not improve.

As salespeople in the exploratory career stage are uncertain about their own skills and the requirements of
their new jobs, they tend to have the lowest expectancy and instrumentality perceptions in a firm’s sales
force. They have little confidence that expending more effort will lead to better performance or that
improved performance will produce increased rewards. But they do have relatively high valences for high-
order rewards, particularly for personal growth and recognition. They need reassurance that they are making
progress and that they will eventually be successful in their new career. Consequently, good training
programmes, supportive supervision, and much recognition and encouragement are useful for motivating
and improving the performance of salespeople at this formative stage of their careers.

Establishment Stage
Those in the establishment stage – usually in their late 20s or early 30s – have settled on an occupation and
desire to build it into a successful career. Thus, the major concerns of salespeople at this stage involve
improving their skills and their sales performance. As they gain confidence, these people’s expectancy and
instrumentality perceptions reach their highest level. People at this stage believe they will be successful if
they devote sufficient effort to the job and their success will be rewarded.

Because people at this career stage are often making important commitments in their lives, such as buying
homes, marrying, and having children – their valences for increased financial rewards tend to be relatively
high. However, their strong desire to be successful – and in many cases the desire to move into management
– make their valences for promotions higher at this stage than at any other. They also have very high
valences for recognition and other indications that their superiors approve of their performance and perhaps
consider them worthy of promotion.

However, the strong desire of promotion at this stage can have negative consequences. Some successful
people may win promotions into sales or marketing management, but many others will not, at least not as
soon as they had hoped. Some of these individuals may become so frustrated by what they consider slow
progress that they quit for jobs in other companies that promise faster advancement or they move
prematurely into a disengagement stage. To help prevent this, managers should guard against building
unrealistic expectations concerning the likelihood and speed of future promotions among their
establishment-stage salespeople.

Maintenance Stage
This stage normally begins in a salesperson’s late 30s or early 40s. the individual’s primary concern at this
stage is with retaining the present position, status, and performance level within the sales force, all of which
are quite likely to be quite high. For this reason, people in the maintenance stage continue to have high
valences for rewards that reflect high status and good performance, such as formal recognition and the
respect of their peers and superiors.

By this stage, both the opportunity and desire for promotion diminish. Consequently, instrumentality
estimates and valences concerning promotion fall to lower levels. But salespeople at this stage often have
the highest valences for increased pay and financial incentives of anyone in the salesforce. Even though
such people are amongst the highest paid salespeople, they tend to want more money due to both increased
financial obligations and a desire for a symbol of success in lieu of promotion.

Disengagement Stage
At some poin t everyone begin to prepare for retirement and the possible loss of self-identity that can
accompany separation from the job. This usually begins to happen when people reach their late 50s or early
60s. During this disengagement stage, people psychologically withdraw from their job, often seeking to
maintain just an “acceptable” level of performance with a minimum amount of effort in order to spend more
time developing interests outside of work. As a result, such people have little interest in attaining more high-
order rewards – such as recognition, personal development, or a promotion – from their jobs.

Because they tend to have fewer financial obligations at this stage, they are also relatively satisfied with
their lower-order rewards and have low valences for attaining more pay or other financial incentives. Not
surprisingly, then, sales people at this career stage have average performance levels lower than any others
except new recruits in the exploratory stage. And their low valences for either high or low order rewards
make it difficult to motivate them.

Disengagement does not occur only among sales people at the end of their careers. Long before they
approach retirement, people may become bored with their jobs and frustrated by a failure to win a
promotion. Such people may psychologically withdraw from their jobs rather than search for a new position
or occupation. They are commonly referred as “Plateaued Salespeople” people who have stopped
developing, stopped improving, and often showing an interest.

THE PROBLEM OF A PLATEAUED SALESPERSON

Causes of Plateauing
- No clear career path
- Not managed adequately
- Bored
- Burned out
- Discouraged with company
- Overlooked for Promotion
- Lack of ability
- Avoiding risk of management job
- Reluctance to be transferred

These rankings are broken down according to whether the sales force consists of a majority of men or
women according to the type of compensation plan employed (eg. Salary only, commission only, etc).

The primary causes of early disengagement are the boredom and frustration that arise when a relatively
young person is kept in the same job too long and sees little likelihood of a promotion or other expansion in
job responsibilities in the near future. No clear career path, boredom and a failure to manage the person
effectively are important causes of plateauing irrespective of the gender of the salesforce or the
compensation system used.

However, simple burnout may be a more important cause of plateauing among saleswomen than among
salesmen, perhaps due to the demands of their multiple roles as mothers and homemakers in addition to
those of their jobs.

The opportunity to earn high levels of pay provided by commission payments can exacerbate the plateauing
problem. Managers indicate salespeople compensated by commission may more easily earn sufficient pay to
meet their economic needs and thereby become less motivated by the chance to earn still higher financial
compensation.

Possible Solutions
- Develop clearly defined career paths for salespeople who are good performers but are not
promoted into management early in their careers. Such alternative career paths typically involve
promotions to positions within the sales force that involve additional responsibility and more
demanding challenges. The idea is to provide frequent changes in job duties and responsibilities
to increase the variety of salespeople’s jobs. Simultaneously, those changes can be used as
rewards for good performance to motivate the members of the sales force and to show that they
are valued employees even though they do not rise to management positions.

To be effective, however, the promotions along with the sales career path must be real rather than simply
changes in title. They must involve real changes in duties and responsibilities, and they must be offered on
the basis of good past performance. Cosmetic promotions, simply when they are doled out on the basis of
time-in-rank – do little to stimulate continued effort among a firm’s older salespeople.

- Enrich the current job by finding ways to add variety and responsibility without developing a
complicated system of hierarchial positions and promotion criteria. This is more likely to be a
more viable approach in smaller firms, and will probably become more popular as technology
allows firms to reduce the number of sales managers and to adopt flatter sales force structures.

Other possible solutions include :

- talk with sales person about problem
- discuss reasons and possible solutions
- conduct motivation sessions
- manage, lead and communicate
- cut salesperson’s responsibilities
- provide new responsibilities
- assign to a new territory
- inform rep of his/her responsibilities
- assign to a new territory
- inform rep of his/her responsibilities
- provide time off
- ask to assist new reps
- use ongoing goal assessment programme
- clear the air and redefine goal
- assign to a different sales manager
- use bonus plans
- have rep come up with solutions
- provide time-off
- ask to assist new reps
- use ongoing goal assessment programme
 - clear the air and redefine goal
- assign to a different sales manager
- use bonus plans
- have rep come up with solutions
- provide perks after sales success
- recognition plans
- encourage reps to be creative
- use competent sales managers
- use training sessions
- change : new products; prospects; etc.

THE IMPACT OF ENVIRONMENTAL CONDITIONS ON MOTIVATION

Environmental factors such as variations in territory potential and strength of competition can constrain a
salesperson’s ability to achieve high levels of performance. Such environmental constraints can cause
substantial variations in performance across salespeople. In addition to placing actual constraints on
performance, environmental conditions can affect salespeople’s perceptions of their likelihood of
succeeding and thus their willingness to expend effort.

Although management can do little to change the environment faced by its salespeople, an understanding of
how and why salespeople perform differently under varying environmental circumstances is useful to sales
managers. Such an understanding provides clues about the compensation methods and management policies
that will have the greatest impact on sales performance under specific environmental conditions.

Salespeople often look with favour on a constantly changing product line because it adds variety to their
jobs, and their markets never have a chance to become saturated and stagnant. However, a rapidly changing
product line can also cause problems for the salesperson. New products and services may require new
selling methods and result in new expectations and demands from role partners. Consequently, an unstable
product line may lead to less accurate expectancy estimates among the sales force.

In some firms, salespeople must perform in the presence of output constraints, which can result from short
supplies of factors of production, including shortages of raw materials, plant capacity or labour. Such
constraints can cause severe problems for the salesperson. In general, sales persons operating in the face of
uncertain or limited product supplies are likely to feel relatively powerless to improve their performance or
rewards through their own efforts. After all, their ultimate effectiveness is constrained by factors beyond
their control. Therefore, their expectancy and instrumentality estimates are likely to be low.

Ways of assessing the strength of a firm’s competitive position in the marketplace:

- market share
- quality of products and services as perceived by its customers
- its prices

When salespeople think that they work for a strongly competitive firm, tghey are more likely to think selling
effort will result in successful performance. In other words, the stronger a firm’s competitive position, the
higher its salespeople’s expectancy estimates are likely to be.

Also, the greater the sales person’s perceived sales potential of a territory, the higher the salesperson’s
expectancy estimates are likely to be.

THE IMPACT OF ORGANISATIONAL VARIABLES ON MOTIVATION

Company policies and characteristics can directly facilitate or hinder a salesperson’s effectiveness. Such
organizational variables may also influence salespeople’s performance indirectly, owever, by affecting their
valences for company rewards and the size and accuracy of their expectancy and instrumentality estimates.

Supervisory variables and leadership

A leader attains good performance from the work unit by increasing the subordinate’s rewards from goal
attainment and by making the path to those rewards easier to follow – through instructions and training, by
reducing roadblocks and pitfalls, and by increasing the opportunities for personal satisfaction.

This theory suggests that effective leaders tailor their style and approach to the needs of their subordinates
and the kinds of tasks they must perform. When the subordinate’s task is well-defined, routine and
repetitive, the leader should seek ways to increase the intrinsic rewards of the task. This might be
accomplished by assigning subordinates a broader range of activities or by giving them more flexibility to
perform tasks. When the subordinate’s job is complex and ambiguous, that person is likely to be happier and
more productive when the leader provides relatively high levels of guidance and structure.

Industrial salespeople frequently face new, non-routine problems. Consequently, they are happier when they
feel relatively closely supervised, and supportive supervision can increase their expectancy and
instrumentality estimates for attaining extrinsic rewards. However, close supervision can lead to more role
conflict since it can reduce flexibility in accommodating and adapting to customer demands.

Another organization variable related to the closeness of supervision is the firm’s first-level sales manager’s
span of control. The more salespeople each manager must supervise (or the larger the span of control), the
less closely the manager can supervise the salesperson. Therefore, the impact of span of control on role
perceptions and motivation variables should be the opposite of the expected impact of the close supervision
should be the opposite of the expected impact of close supervision, although this is changing as a result of
new technologies.

Another related supervisory variable is the frequency with which salespeople communicate with their
superiors. The greater the frequency of communication, the less role ambiguity salespeople are likely to
experience and the more accurate their expectancy and instrumentality estimates should be. Again, however,
frequent contact with superiors may increase the individual’s feelings of role conflict.

Management by Objectives is a popular supervisory technique in sales management. Specific procedures

vary from firm to firm, but one basic principle of MBO is to give the individual a voice in determining the
standards and criteria by which performance will be evaluated and rewarded. Salespeople who believe that
they influence such standards are likely to have a cleaner understanding of how to perform their jobs and
how performance will be rewarded.

INCENTIVE AND COMPENSATION POLICIES

Management policies and programmes concerning higher-order rewards, such as recognition and promotion,
can influence the desirability of such rewards in the salesperson’s mind. For these rewards, there is likely to
be a curvilinear relationship between the perceived likelihood of receiving them and the salesperson’s
valence for them.

A company’s policies on the kinds and amounts of financial compensation paid to its salespeople are also
likely to affect their motivation. In firms where the current financial compensation is relatively high,
salespeople will be satisfied with their attainment of lower-order rewards. They will have l,ower valences
for more of those rewards than people in firms where compensation is lower.
The range of financial rewards currently received by members of the salesforce might also affect their
valences for more financial rewards. If some salespeople receive much more money than average, many
others feel underpaid and have high valences for more money. The ratio of total financial compensation of
the highest paid salesperson to that of the average in the salesforce is the EARNINGS/OPPORTUNITY
RATIO. The higher this ratio is within a company, the higher the average salesperson’s valence for pay is
likely to be.

Finally, the kind of reward mix offered by the firm is a factor. Reward Mix is the relative emphasis placed
on salary versus commissions and other incentive pay and non-financial rewards. It is likely to influence the
salesperson’s instrumentality estimates and help determine which job activities and types of performance
will receive the greatest efforts from that salesperson.