Learning Objectives

Learning Objectives • Understand the process of motivation • Discuss the effect of personal characteristics on salesperson motivation • Understand how an individual’s career stage influences motivation • Discuss the effect of environmental factors on motivations • Discuss the effect of factors inside the company on motivation

Key Terms Motivation Expectancies accuracy magnitude Instrumentalities accuracy magnitude Valence for rewards Performance attributions (stable, unstable, internal, external) Career stages (exploration, establishment, maintenance, disengagement) Plateauing Management by objectives (MBO) Earnings opportunity ratio

Psychological Motivation • Most industrial and organizational psychologists view motivation as an individual’s choice to: • Initiate action on a certain task • Expend a certain amount of effort on that task • Persist in expending effort over a period of time

Psychological Determinants of Motivation Level of effort expended Job activity task Expectancy Perceived link between increased effort and improved performance Motivation Level of performance on some performance dimension Valence for Performance Instrumentality multiplied by valence Instrumentality Perceived link between improved performance and increased reward Increased attainment of rewards Valence for Rewards Perceived desire for receiving more reward

Motivation • A salesperson’s motivation to expend effort on a task rises from one or more of these three perceptions. • Expectancies – the perceived linkages between more effort and achieving improved performance • Instrumentalities – the perceived relationship between improved performance and receiving increased rewards • Valence for rewards – the perceived attractiveness or intrinsic value the rewards the salesperson might receive

Expectancies A salesperson’s perceive a link between job effort and achieved performance. An expectancy-- estimating the probability that increased effort will lead to improved performance Accuracy of expectancies—based on the perceptual clarity of understanding the relationship between effort and achievement Magnitude of expectancies– the perceptual value assigned to an expectancy based on the ability to control or influence the required performance

Question Are salespeople’s views of the linkage between activities and performance outcomes consistent with those of sales managers? Management Implications If substantial variation exists, salespeople may devote too much effort to activities considered unimportant by management, and vice versa. This might indicate a need for the following: More extensive/explicit sales training. Closer supervision. Evaluation of salesperson’s effort and time allocation as well as performance. Important Questions and Management Implications of Salespeople’s Expectancy EstimatesAccuracy of Expectancy Estimates

Question Are there large variations in expectancy perceptions between high performers and low performers in the sales force? Management Implications If high-performing salespeople hold reasonably consistent views concerning which activities are most important in producing good performance, those views might be used as a model for sales training/professional development programs. Important Questions and Management Implications of Salespeople’s Expectancy EstimatesAccuracy of Expectancy Estimates

Question All other things equal, the higher the salesperson’s expectancy estimates, the greater the individual’s motivation to expend effort. Do personal characteristics of salespeople influence the size of their expectancies? Overall self-esteem? Perceived competence? Mental ability? (Intelligence?) Previous sales experience? Management Implications If such relationships are found, they may suggest additional criteria for recruitment/selection Important Questions and Management Implications of Salespeople’s Expectancy EstimatesMagnitude of Expectancy Estimates

Question Do perceptions of uncertainty or constraints in the environment (e.g., materials shortages, recession, etc.) reduce salespeople’s expectancy estimates? Management Implications During periods of economic uncertainty, management may have to change performance criteria, evaluation methods, and/or compensation systems to maintain desired levels of effort from the sales force (e.g., lower quotas, reward servicing rather than selling activities). Important Questions and Management Implications of Salespeople’s Expectancy EstimatesMagnitude of Expectancy Estimates

Instrumentalities Instrumentalities link job performance and available rewards. A person estimates the likelihood that an improvement in performance will lead to a specific reward. Accuracy of Instrumentalities-- based on the perceptual clarity of understanding the relationship between improvement, achievement and available rewards Magnitude of Instrumentalities:-- an estimate of the intrinsic value of firm’s compensation plan e.g.: a commission salesperson will be more likely to perceive a greater probability of attaining more pay by improving performance

Question How are salespeople’s instrumentality estimates influenced by their compensation system (salary versus commission)? Do salespeople on commission have higher instrumentality estimates for performance dimensions related to short-term sales volume? Do salaried salespeople have higher instrumentalities for performance dimensions not directly related to short-term sales volumes? Management Implications If such relationships are found, managers should select the type of compensation plan that maximizes instrumentality estimates for those performance dimensions considered most crucial. Important Questions and Management Implications of Salespeople’s Instrumentality EstimatesMagnitude of Instrumentality Estimates

Question Do personal characteristics of salespeople influence the size of their instrumentality estimates? Feelings of internal control? Mental ability? Sales experience? Management Implications If such relationships are found they may suggest additional criteria for recruitment/selection. Important Questions and Management Implications of Salespeople’s Instrumentality EstimatesMagnitude of Instrumentality Estimates

Valences for Rewards Valences measure perceptions of the desirability of receiving increased rewards through improved performance. Evidence suggests that other rewards equal or exceed the value of increased financial compensation No universal statements can be made about the kinds of rewards deemed most desired and most effective for motivation Satisfaction with current rewards depends upon perceived value of their characteristics, compensation policies and management practices within the firm.

Valence Ratings and Rankings of Alternative Rewards by Salespeople in Two Manufacturers Company A (N=151) Company A (N=76) Valence Rating Valence Rating Reward Rank Rank More Pay Sense of Accomplishment Opportunities for Personal Growth Promotion Liking and Respect Security Recognition 90.8 74.8 74.7 64.7 62.2 60.3 50.3 1 2 3 4 5 6 7 80.9 84.6 87.9 74.6 64.8 57.4 53.9 3 2 1 4 5 6 7 Adapted from Gilbert A. Churchill, Jr., Neil M. Ford, and Orville C. Walker, Jr., Motivating the Industrial Salesforce: The Attractiveness of Alternative Rewards, Report #76-115 (Cambridge, Mass.: The Marketing Science Institute, 1976), p. 14.

Personal Characteristics and Motivation • The personal characteristics affecting motivation include: • The individual’s satisfaction with current rewards • Demographic variables • Job experience • Psychological variables – the salesperson’s personality traits and their attribution of meaning to performance

Satisfaction Maslow’s hierarchy of needs, Herzberg’s theory of motivation, and Alderfer’s existence and growth theory all suggest workers, currently dissatisfied with their rewards, value lower-order reward most highly. These theories also suggest that high-order rewards will be valued more highly after lower-order need for rewards have been satisfied. Is it possible to pay a salesperson too much? Studies show that salespeople, satisfied with their current income (a lower-order reward), assign lower valences to earning more pay.

Job Experience As people gain experience, they gain a clearer idea of how expending effort affects performance.. Experienced salespeople understand how superiors evaluate performance and how certain performance leads to rewards, inexperienced counterparts tend not to understand. The magnitude of a salesperson’s expectancy perceptions relates to experience.

Psychological Traits An individual’s motivation seems to be affected by psychological traits. People with strong achievement needs tend to express higher valences for higher-order rewards like recognition, personal growth, and feeling of accomplishment. A general feeling of self-esteem, perceived competence and ability to perform job activities (task-specific self-esteem) related positively to the magnitude of expectancy estimates.

Performance Attributions • People try to identify and understand the causes of major events and outcomes in their lives. • Stable internal factors – unlikely to change much in the near future • Unstable internal factors – vary from time to time • Stable external factors – the nature of the task or competitive situation in a particular territory • Unstable external factors – change next time, such as assistance from an unusually aggressive advertising campaign.

The Influence of Performance Attributions on the Magnitude of a Salesperson’s Expectancy Estimates Impact on Magnitude of Salesperson’s Expectancy Estimates Performance Attribution Good Performance Attributed to: Stable internal cause Unstable internal cause Stable external cause Unstable external cause + + + 0 Poor Performance Attributed to: Stable internal cause Unstable internal cause Stable external cause Unstable external cause - + - 0

Management Implications • The relationships between salespeople’s characteristics and motivation levels have two broad implications for sales managers: • They suggest people with certain characteristics are likely to understand their jobs and their companies’ policies especially well. • Some personal characteristics are related to the kinds of rewards salespeople are likely to value and find motivating

Learning Objectives