Page 127 - DMGT205_SALES_MANAGEMENT

Unit 9: Motivating and Compensating Sales Personal

Notes
Table 9.2

Value of Reward
e.g. e.g. e.g.
increased call rate, increased sales, higher pay in sense of
longer working day increase in number accomplishment,
sales call ratio of active accounts, respect,
higher promotion.

Clearly, different salespeople will have different valences (values) for the same reward. Some
might value increased pay very highly, while for others higher pay may have less value; for
some the sense of accomplishment and recognition may be very important, for others much less
so. Also, different salespeople may view the relationship between performance and reward, and
between effort and performance, in quite different ways. A task of sales management is to
specify and communicate to the sales force these performance criteria, which are important in
helping to achieve company objectives and to relate rewards to these criteria. Further this
theory supports the notion that performance targets, e.g., sales quotas, to be effective motivators,
should be regarded as attainable (high expectancy) by each sales person, otherwise the first link
in the expectancy model will be severed. Finally, this model provides a diagnostic framework
for analysing motivational problems with individual salespeople and provides an explanation
of why certain managerial activities can improve motivation. Training in sales skills, for e.g.,
can improve motivation by raising expectancy levels.

9.3.4 Adam's Inequity Theory

Feelings of inequity (unfairness) can arise when an individual's effort or performance on the job
exceeds the reward which he or she receives. Salespeople who feel they contribute more than
others to the organisation expect to receive proportionately greater rewards. This is the essence
of Adam's inequity theory.

For a sales person inequity can be felt in such areas as:
1. Monetary rewards
2. Workload
3. Promotion

4. Degree of recognition
5. Supervisory behaviour
6. Targets
7. Tasks

The outcome of sales person perceiving significant inequities in any of these areas may be
reduced motivation as a result of a feeling of unfairness. A study by Tyagi (1990) examined the
effect of perceived inequities (rewards and favouritism) on motivation of life insurance
salespeople. The results showed that feelings of inequity in all areas investigated (monetary,
promotion, recognition, supervisory behaviour and task inequities) had an adverse effect on
motivation. Monetary reward inequity had a particularly strong effect on motivation. The
implication is that sales managers must monitor their sales force to detect any feelings of
unfairness. This can be done informally during sales meetings or through the use of
questionnaires. Some sales organisations survey their sales representatives periodically to

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