training motivation and compensation [compatibility mode]

7/27/2019 Training Motivation and Compensation [Compatibility Mode]

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Sales Force Motivation& Compensation

Session 6 & 7

Sanjeev Varshney


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Sales Force Recruitment &

Selection


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Key Issues with the Recruitment

of People

Identifying the manpower requirement

Identifying the competencies required

Identifying the right profile and establishing

the right selection criteria Getting the right number

Getting the right profile

Induction and Socialization into the company


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Process of Recruitment

Manpower planning

Prepare Job Specification & Job Description

Identify the selection criteria & tools to select

the right people Advertise to target the right population

Conduct selection process

Socialisation


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Manpower Planning

Current Performance

Region wise

Product wise

Channel/ account wise etc

Future Growth prospects and plans

Inventoring

Anticipating future problems

Availability of Budgets

What level and what profile


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Tasks of a Salesman

Prospecting

Targeting

Communicating

Selling Servicing

Information Gathering & processing

Allocating


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Competencies of a Sales man

Definitions and explanations

Competency

A descriptor that connotes group of knowledge,ability and behavior that affects success on the

job.

Knowledge refers to what

Skill refers to knowledge of how, and

the repeated application of the skill is behaviour,

The group of all three refers to competency.


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Establish the Selection Criteria

Educational qualification

Gender

Family Background

Physical experience Current Status & Life Style

Personality

Aptitude

Skill variables


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Selection Process

Attracting applications:

Advertisement Incompany

Open

Campus recruitment

Referral

Distributor/DSA Sales force Conduct tests/interview

Right battery of tests

Interview criteria

Train the interviewers

Group discussion

Team building exercises etc.


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Methods of Socialization

Induction Training

Company Policy, culture and values

Skill based

Mentoring


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Sales Training


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Sales Training process

Assess Sales Training Needs

Design & execute Sales Training Programme

Evaluation of Sales Training Programme


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Assessing sales Training

Needs

Sales managers observation

Sales force survey

Customer Survey

Performance testing Job description & performance evaluation

Assessment Centres & Development Centres


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Some popular sales training

needs

Product knowledge

Customer knowledge

Selling skills

Train the trainer Behavioral training programmes

Leadership

Motivational etc.


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Designing Sales Training

Programs

Some of the Common objectives; Increase sales productivity

Increase sales, profit or both Improve customer relations

Introduce new products, markets and promotional programs

Improve sales force morale

Better negotiation skills

Better channel partner management Improve team work

Train the trainer

Common sales training methods Class room

Behavioral learning (role-plays etc) Self learning modules (online as well books, CD Rom etc.)

On the job training


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Evaluation of Sales Training

Reactions

Learning

Behaviour changes

Results


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Framework for Sales Training

Evaluation

Outcome to

Measure

What to measure How to measure When to

measure

Reactions Training objectiveachieved

Training worthwhile

Questionnaires

Interviews

After the training

Learning Knowledge

SkillsAttitude

Tests

Interview

After the training

testsBefore-after

Behaviour Change of

behaviour

Observation

Self-assessment

After training,

after some regular

interval

Results Sales

Profits

Customer

satisfaction

Company data

Managerial

judgement

Market survey

After training,

quarterly, yearly

etc.


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Reinforcement

Feedback

From the trainer

From the supervisor

Regular updates Follow up

Advance training programs


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Exercise: Assess Training

NeedS.No. Problem Kind of

Training

1. Company is a small player in the telecomsector and wants to increase its profitability

by more acquisition, retaining old

customers and by selling VAS particularly

Data services

2 Company in the business of apparels is a

major player and is struggling with the

problem of same store growth

3. Company in the business of providingfinancial and legal consultancy services is

struggling with the problem of retaining

customers and increasing share of wallet


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Role of a Supervisor in

Development of Sales man

Assist in meeting targets

Mentoring

Assess the Performance gaps

Provides feedback

Arranges and develops developmental programs

Provide on-the job training

Change agent

Managing conflicts


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Ideal Change Management

Process

Unfreezing-------- Overcoming inertia and

dismantling the existing mind set When change occurs------------ there is

confusion as there is no clear picture of new

ways Refreezing----------------- New Mind Set is

Crystallizing and therefore ones comfort

level is returning


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Change Management Process &

leader Response

Outright rejection

Opposition

Exploring the

opportunities

Ensuring Commitment

Build Awareness

Generate interest

Develop Knowledge and

provide ability

Monitor and control

through continuous

reinforcements

Individual Response Change Leader Response Means of easy &

effective Change

1.Need for change

2.How I can supportand participate in

the change

3.How I can bring

about change and

knowledge and

skills required

4.How to sustain the

change


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On the Job training

Role of a Coach/supervisor Describe particular selling situations

Explain various techniques

Approaches that might be used effectively

Coach Makes actual sales call

Discuss each with the trainee afterward

Trainee makes sales call Followed by discussion and appraisal

Amount of coaching is reduced with subsequent calls

Found most suitable for: Developing trainees selling skills

Answering objections

Closing sales


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Role of a supervisor

Others/ OutsideInfluence

Knowledge and

Skills

Motivation

Personality

Aptitude

Change Situation/Influence

Provide Training

Redesign Task

Counsel to ChangeBehaviour

Re-evaluate Person

Easier to

Resolve

Difficultto Resolve

Most likely

Least Likely


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ExerciseDifferent Scenarios what is the likely performance reason, and is training

the answer

Your TSI, Raghu has been facing a lot of problems at home. His wifewas unwell and hospitalized and as she recovered, his son fell sick. Forthe last 2 months his performance has also been indifferent.

The TSI, Rajiv always starts with a NO. Everytime a new suggestion is

made he describes it as impractical and does not implement it.

The TSI Ramesh has been facing a lot of problems from his Distributor.The Distributor is keeping very low stocks and is sometimes unable tofulfill all the orders froom the market.

The TSI Rajbir has been working in the company for the last 10 years,and was very keen to get promoted. However he was not capable ofbecoming an ASM. He always achieves the target but was not able toimplement a few key initiatives related to changes in DistributorOperations.


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Compensation &

Motivation of Sales Force


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Motivational Theories & Sales Motivators

Maslow Alderfer Herzberg Sales force Motivators

Physiological &

safety needs

Existence Hygiene Salary

Commission

Group incentiveBasic training

Love/Belonging

needs

Relationship Encouragement & Contact of

supervisor

Sales meetings

Esteem needs Growth Motivators Publicizing comparativeperformance

Advanced training

Special prerequisites

Prizes/award money

Participative goal settingOppurtunity for promotion

Independent charge

Self

actualization

Special recognition for

outstanding performance


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Job Characteristics Model of

Sales Motivation

Core JobDimensions

Skill Variety, task

identity and

significance

Autonomy

Feedback

Critical

Psychological

states

Experienced

Meaningfulness of

work

Experienced

responsibility of

work outcomes

Knowledge ofresults of work

activity

Personal &work Outcomes

High Internal work

motivation

High General Job

Satisfaction

High growth

satisfaction

Moderating Factors individual

differences


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Monetary Incentives

Fixed Salary

Fixed salary plus Bonus

Variable salary

Commission based system Slab system


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Objective of compensation

componentsS.No. Component Objective

1 Salary Motivate effort on non-selling activities

Adjust for differences in territory

potential

Reward experience and competence

2 Commissions Motivate a high level of selling effort

Encourage sales success

3 Bonuses Direct effort towards Strategicobjectives

Provide additional rewards for top

performers

Encourage sales success

4 Sales

Contests

Stimulate additional effort targeted at

specific short term objectives

5 Benefits Satisfy sales people security needs

Match competitive offers


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Caselet 1 A Company is in the business of biscuits and snacks. It has a wide

range of products and has been adding atleast 1-2 new productseach year. However, in the process sale of its oldest and the largestselling brand xyz has stagnated. Research reports reveal that thisstagnation is due to the lost interest of the sales man in the productand the pressure and incentives for every new launch. This brand ofthe company comprises 18% of the companies turnover and is themarket leader in the category. Therefore management has fixedfollowing incentive plan for its salesforce to boost the sale of itsoldest products:For meeting the overall monthly sales targets: 0.1% of total salesmade by the salesman

For selling xyz brand more than the designated targets (this monthtargets were also fixed for this brand by taking average of the last

one year): 0.2% of extra sales made for this product over and abovethe average

Questions:

1. what do you expect would be the result of this incentive plan

2. What are the expected consequences

3. What is wrong with this incentive plan


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Case Let 2 Suggest a Sales Incentive plan for Star Sky Ltd. A company in the

business of selling satellite TV connections. Product is new to India.

There is only one competitor in the market, Box TV operating sincelast 2 years. Star Sky has been launched only 6 months ago. Mostof the market today is dominated by Cable people. Rates beingcharged vary across markets and the reception quality being givenby them is bad.

Product Costs has following components:

Set-top box charges: Rs. 3000/-Installation charges: Rs. 1000/-

Monthly rental: Rs 300/-

Immediate objective of the company is market penetration andincreasing the number of such connections many fold


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Non-monetary incentives

Career advancements

Reward & appreciation

Advanced Training & Personal Growth

Extra facilities


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Framework for Planning

Motivational Schemes

Type of Selling

Address Vocational Esteem

Targets & TerritoriesImprove work culture

Career ProspectsMonetary Reward

Functioning of the Job

Rewards from the job


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Proportion of SalaryS.No. Condition Lower Higher

1 Importance of Sales persons skills considerable Slight

2 Reputation of sales persons company Little known Well known3 Companys reliance on advertising and

other sales promotion activities

little Much

4 Competitive advantage of product little Much

5 Importance of providing customer service slight Considerable6 Significance of total sales volume as a

primary selling objective

greater Lesser

7 Incidence of technical or team selling little much

8 Importance of factors beyond the control of

salesperson

slight considerable


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Generalized Framework for

Compensation Package

Sales Response

function(product type/

market

conditions

Market

developmentrequired

No market

Developmentrequired

Sales is an

individualactivity

High competition 50% fixed and

50% slab system

25% fixed and

75% variable

Medium

Competition

75% fixed and

25% bonus

50% fixed and

50% variable

Low Competition Fixed Fixed

Sales is a group

activity

Fixed plus

productivity based

bonus

Fixed


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PLC & Compensation

Introduction: A large fixed salary plus large

variable component Growth: A large fixed salary plus small

variable component

Maturity: A small fixed salary plus largevariable component

Decline: A large fixed component plus very

large variable component

Discuss the Issues


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Additional Issues in Managing

Sales force reward system

Sales contests

Equal pay

Team compensation

Global considerations Changing the reward system

training motivation and compensation [compatibility mode]

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