Page 68 - DMGT507_SALES AND PROMOTIONS MANAGEMENT

Sales and Promotions Management

Notes
By understanding how an integrated and holistic approach to motivation works – the
importance of trust, of self-esteem, of social recognition, of improved chances to fulfill
one's potential – traditional incentive compensation management strategies can be
rethought and implemented in ways that improve the performance of the sales force and
help the entire company achieve high performance.
Questions

1. Analyse the ways in which Accenture motivates its sales force. Do you think they
are adequate?
2. Examine the role played by trust and self-esteem in motivation.
Source: accenture.com

Task Consider any 3 companies and list the techniques adopted by them to
motivate its personnel. Is their any difference in their ways?
3.2 Compensating the Sales Force

Sales compensation plans are aids to, rather than substitutes for, effective motivation. The basic
appropriateness of a compensation plan is important and so is the way it is implemented and
administered.
In established companies it is rarely necessary to design new sales compensation plans and sales
executives concern themselves mainly with revising plans already in effect. Most changes are
minor, instituted to bring the plan and marketing objectives into closer alignment. Major changes
in the compensation plan are rare. Like most people sales personnel resist sweeping changes,
particularly when this requires them to alter accustomed ways of doing things.

3.2.1 Requirements of a Good Compensation Plan

A good sales compensation plan fulfils seven requirements:

1. It provides a living wage in the form of a secured income.
2. The plan fits with the rest of the motivational programme.
3. The plan is fair – it does not penalise sales personnel because of factors beyond their
control. Within the limits of security and other special circumstances, sales personnel
receive equal pay for equal performance.
4. It is easy for sales personnel to understand – they are able to calculate their own earnings.

5. The plan adjusts pay to changes in performance.
6. It is economical to administer.
7. It helps in attaining the objectives of the sales organisation.

3.2.2 Designing a Compensation Package

A good compensation plan is built on solid foundation and therefore it requires a systematic
approach to assure that no essential step is overlooked.

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