Page 145 - DMGT205_SALES_MANAGEMENT

Unit 9: Motivating and Compensating Sales Personal

After one month of use, the sales manager conducted a preliminary inquiry into the Notes
results of the new compensation policy. The results appeared to be that the easier to sell
items in the product line were moving well, those of average difficulty to sell were
moving adequately, and the one item that was rather difficult to sell (the dryer) was
moving very poorly. The exhibit gives the comparison of September to the last month
under the old policy (July) and to September one year before. Shah presented his analysis
from these data. The sales manager said that he would repeat his comparison after another
month. In the meanwhile, the president told the sales manager to urge the salesmen to
solicit orders for dryers.
Questions
1. Do you think that as a promoter, Pandey was right in promoting the kind of sales
policies he did ? Justify your comment?
2. Evaluate the compensation package in light of the facts given in the case. What are
the suggestions that you would have for an ideal compensation plan in this case?

9.14 Summary

 The sales job is very monotonous and full of disappointments.
 A proper motivation programme is to be followed.
 The sales personnel need to be given proper incentives to reduce the labour turnover.

 It is important that the manager is skilled and knows the technicalities of the job and is
able to lead the personnel in an effective manner.
 The financial and non financial incentives both need to be taken care of.

 Fringe benefits, which do not bear direct relationships to job performance, range from
25-40 per cent of the total sales compensation package.
 A bonus is an amount paid for accomplishing a specific sales task.

 Life insurance, health insurance, accident and disability insurance are provided by most
companies.
 Many sales persons take advantage of company sponsored educational programmes.

 The financial incentives become less affective after some time and thereafter the salesman
is looking to non-financial incentives which have been discussed at length.
 Many sales persons take advantage of company sponsored educational programmes.

9.15 Keywords

Credit Union: A company supported credit union to save and borrow as and when desired.

Educational Assistance: Many sales persons take advantage of company sponsored educational
programmes. They sponsor candidates to courses useful to the company. Employers also grant
release time to employees to attend courses.
Employee Services: These include subsidised meals, recreational facilities, discount on company’s
products, etc.
Expectancy: This refers to a person’s perceived relationship between effort and performance,
i.e., to the extent to which a person believes that increased effort will lead to higher performance.

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