Introduction to Sales Motivation

INTRODUCTION

Sales Management is the marketing management activity dealing with planning, organizing, directing, and controlling the personal selling effort. This includes recruiting, training, supervision, motivation, evaluation and compensation of sales personnel. Our comprehensive assignment is revolved around studying the compensation structure and motivational activities of 13 various well established companies.

SALES COMPENSATION

In the current context of competitive environment, it makes difficult to attract and retain the top talent. While there are many aspects which influence in attracting and retaining talent. Compensation plays a vital role among all of them. The compensation strategy is extremely important part of overall HR strategy to keep the organization competitive and successful. Building a fair, competitive and attractive compensation package is critical and one of the important aspect for attracting and retaining top talent. Compensation structure is influenced by organization’s industry.

A good compensation structure does not provoke employees to search for a job. It makes them to focus on delivering the results. It will also encourage employees to talk about the organization and their success with their friends. Sales compensation  not only helps attract potential salespersons and  motivates the sales force which in turn drives the sales but also is a determinant of status and value of an organization. An effective sales compensation program will help to manage and retain the sales force effectively. It will always be in compliance with the corporate Strategy of the organization

Any type of sales organization can reward sales performance in three fundamental and interrelated ways; Direct financial rewards, Career advancement and personal development         opportunities and Nonfinancial compensation

Compensation structure is often based on:

• market research about the worth of similar jobs in the marketplace,
• employee contributions and accomplishments,
• the availability of employees with like skills in the marketplace,
• the desire of the employer to attract and retain a particular employee for the value they are perceived to add to the employment relationship, and
• the profitability of the company or the funds available in a non-profit or public sector setting, and thus, the ability of an employer to pay market-rate compensation

Generally, a number of factors are considered while deciding the pay for an employee,

• Attitude, Behavior, Skills, Competencies
• Performance and Potential to perform
• Market parameters and Previous company pay
• Value the position brings to the company and the value the company can derive out of the person occupying the position
• Age, industry type, company’s stage of life

AN EFFECTIVE COMPENSATION STRUCTURE

A good Compensation plan is not just in terms of monetary. Compensation also includes payments such as bonuses, profit sharing, overtime pay and sales commission. Compensation can also include non-monetary perks such as a company-paid car, stock options in certain instances, company-paid housing, and other non-monetary, but taxable, income items.