Page 69 - DMGT507_SALES AND PROMOTIONS MANAGEMENT

Unit 3: Motivating and Compensating the Sales Force

Defining a Sales Job Notes

1. Re-examine the nature of the sales job and revise it if it is outdated.
2. Analyse sales department objectives for their effect on the sales person's job.
3. Check out for sales volume objectives, for instance, whether in rupees, units of products,
or number of dealers and distributors and translate them into what is expected of the sales
personnel, as group and individually.
4. The impact of sales related marketing policies are determined (like, credit policies, price
policies, etc.)
5. Consider the current and proposed advertising and sales promotional programmes as
they assist in clarifying the nature of the sales person's goals, duties and activities.
Consider the Company's General Compensation Structure

Most companies use job evaluation systems to determine the relative value of individual jobs.
Its purpose is to arrive at fair compensation relationships among jobs. There are four job evaluation
methods. Two are non-quantitative – simple ranking and classification or grading. Other two
are quantitative - the point system and the factor comparison method.

Non-quantitative

1. Simple Ranking: This is an inexpensive job evaluation method. No attempt is made to
determine the critical factors inherent in the job, only overall appraisal of the relative
worth of different jobs is made.
2. Classification or Grading: In this method jobs are graded in terms of job responsibility,
skills required, supervision given and received, exposure to unfavourable and hazardous
working conditions and similar characteristics. All jobs within a grade are treated alike
for compensation.

Quantitative

1. Point System: It involves defining factors common to most jobs. The specific factors
generally include mental and physical skills, responsibility, supervision received and
given, personality requirements and minimum education required. Each factor is assigned
a minimum and maximum number of points, different ranges being associated in line
with the relative importance of the factors. The use of point values makes it possible to
determine the gap or distance between job classes.

2. Factor Comparison Method: This method resembles the point system but is more complex.
It utilizes a scheme of ranking and cross comparisons to minimise error from faulty
judgment. A selected number of key jobs typical of similar jobs throughout the company
are evaluated. This is done by arranging them in rank order, from highest to lowest for
each factor. As a check against this judgmental evaluation, the compensation money actually
paid for each job is allocated to the factors, which automatically establishes the relationship
among jobs for each factor. The judgmental ranking and the ranking by allocation of
compensation are compared and differences are reconciled, or else the jobs are removed
from the key list. On this basis, money amounts assigned to the several factors making up
key jobs and additional jobs are evaluated and their monetary values for each factor
interpolated into the scale. This procedure is repeated until all jobs are evaluated.

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