Introduction
Many organizations realize that professional, highly skilled salespeople are critically to their business success. As competition between retailers and brands grows drastically in luxury industry, it becomes increasingly important to stimulate the sales force for better sales performance and stronger commitment to their organizations.
Firstly, I will define the generic term of motivation and the purpose of motivating sales force from individual and organizational aspects. The key concepts of intrinsic and extrinsic motivation will be explained and relevant theories will be analysed.
Then, I will examine the advantages and disadvantages and for different types of financial compensation reward systems. Evaluate the feasibility for different plans in luxury industrial application.
This paper will also discuss the importance of non-financial compensation reward in motivating sales force and give recommendations for applying them in luxury industry.
In the end, this paper will analyze the importance of effective leadership in motivating the performance of sales force, relevant suggestions will be given.
Throughout this study, theories will be connected to the luxury industrial application and adequate strategies will be proposed.
Definition and Purpose
Motivation can be defined as "the processes that account for an individual’s intensity, direction, and persistence of effort toward achieving an organizational goal"( Robbins & Judge, 2011). In my understanding,
Motivation is having a reason or reasons to act/behave in a particular way. It creates “drive” in people whether it is in pursuit of a goal, or the need to complete an activity. It produces enthusiasm and a willingness to achieve in both a work environment and in your personal life. Motivation can be increased and decreased in line with the incentives on offer.
This expansion demonstrates how the luxury industry is now run by massive corporations whose focus is only on growth, visibility, brand awareness, advertising, and most importantly, PROFITS! With growth and expansion, has come a decrease in quality and rarity. The luxury garments produced are mostly not handmade but are even outsourced to large factories in places such as China and Turkey. Also, to meet quarterly turnover projections, “designers churn(ed) out increasingly trendy collections of clothes, handbags, and shoes.” (Thomas, Pg. 246) With hundreds of new stores around the globe the surplus of designer labeled merchandise is immense hence, the proliferation of outlet malls.
What is motivation? As manager’s, motivation is one of the most vital and crucial assets to possess in managing a business. This drive is a critical tool to use in the work place and determine the success or failure of an organization. Motivation is a driving force that initiates and directs behavior. In other words, motivation is an internal energy that drives an individual to do something in order to achieve a certain goal. Therefore, creating a motivating environment in the workplace will lead to happy employees. Creating a work environment like this, managers can expect low staff turnovers, improved productivity, happy customers, and better financial performance. Therefore, the input of motivation use towards employees determines the output efficiency of the company. However, everyone involved in an organization is motivated differently. Everybody has their own individual needs in regards to motivation. Depending on how motivated a person is, determines the effort that individual puts into the work and therefore, how productive they are.
In any case, a general notion can be drawn that the the motivator factor are measured in different terms. The Sales staff aggressively pursues more sales opportunities because its success, feeling of achievement and the large financial incentive depend on their individual performance. This does not exist in Marketing as the feeling of achievement or the vague bonus scheme depends on the company’s performance rather than individual success. Furthermore, the hygiene factors such as pay policy, supervision style, social status and working condition seem to play significant role in Pluto Telecommunications. These hygiene factors in Sales department create job satisfaction as the sale staff is well paid, with greater autonomy in making decisions, high social status awareness and self –esteem. Yet, these factors, up to certain degree do, not play important role for Marketing. Therefore, it is essential to understand what and how motivates people.
This paper will discuss in some detail about what goes into a good salesperson and how to get clients. It will also discuss six total rewards program. Define the behaviors of the sales force that are targeted with the compensation plan. Next, look into how a value proposition is accomplished for current and future employees at car lot. Specify how fascinated future salespeople may be in the near future.
There are numerous motivational theories that explain why people do what they do. When viewed collectively, these theories suggest people’s actions are driven by the following factors: economic, social, and self-construct. Economic factors include not only money, but health protection, security, wealth, physical safety, and purchasing power. Sales commissions fit most of these needs, but do not fully meet the needs for security and physical safety. When people think about and act upon what others think of them, they are being influenced by social factors. Most people will work harder for positive feedback and avoid performance that garners negative feedback. For example, some people are eager to conform to the norms of a sales team and are positively motivated by the performance of the entire team. Self-construct is the inner voice that drives an individual to perform and differs in every individual. Some people are driven in the pursuit of self-accomplishment, while others are driven by the need for power or acceptance. Each of these factors are combined in varying degrees in all individuals, whether salespeople or not.
Keeping the moral of sales force in high level is critical in recent economy. One of the factors that enhance the attitudes and the productivity of sales force is a rewards program that recognize and addresses their needs. To assists in understanding the influence and role played by rewards program, Starbucks’s compensation plan will be used as a guide in creating an effective workforce compensation program.
Many high performance companies understand the importance of offering awards and incentives that recognize, validate, and value outstanding work. They help keep the employees motivated and productive, and are effective methods of reinforcing company expectations and goals. When the management of a department gets together to put an incentive program into place, they have to decide which awards are worth the effort. They also have to consider the perceived value of earning the award, as well as the effort that is required to earn it. Management and employees may perceive non-monetary incentives to be more valuable than the retail value of the award in cash. Non-monetary rewards in
Reward Management (RM) has been defined as the distribution of monetary and non-monetary rewards to employees in an effort to align the interests of the employees, the organisation, and its shareholders (O’Neil, 1998). In addition O’Neil (1998) also suggests that a RM system can serve the purpose of attracting prospective job applicants, retaining valuable employees, motivating employees, ensuring legal requirements relating to direct and indirect rewards are not violated, assisting the company in achieving human resource and business objectives, and ultimately assisting the organisation in obtaining a competitive advantage.
Motivation is the “why” behind our behaviors. Behavior that is usually goal-oriented. The forces that lie beneath motivation can be biological, social, emotional or cognitive in nature. There are, indeed, a plethora of inducements that cause us to act the way we act and do the things we do. They include things like quenching our thirst, reading to gain knowledge, studying to ace an exam, surpassing quotas and meeting deadlines for a promotion, etc. According to Kendra Cherry’s article on “WHAT IS MOTIVATION”, there are three components of motivation: activation, persistence and intensity. Activation is the decision to initiate a behavior. Persistence is the continued effort toward a goal even though obstacles may exist. Intensity is the
Quality of Customer Service becomes critical for company's success on the market. If planed properly, incentive pay plans may increase customer service representatives' interest to providing better service to the customer. Specifics of Customer Service brings its difficulties to setting standards for quantity and quality measuring of the Customer Service productivity, as basics of incentive pay determination.
‘Motivation’ is derived from the Latin term ‘movere’ that means ‘to move’. Thus, motivation is a process that starts with a physiological or psychological deficiency or need that activates a behaviour or a drive that is aimed at a goal or incentive (Luthans). Broadly speaking, motivation is willingness to exert high levels of efforts towards organizational goals, conditioned by the efforts’ ability to satisfy some individual needs (Robbins). Need means some internal state that make certain outcomes appear attractive. An unsatisfied need creates tension that stimulates drives within the individual. These drives generate a search behaviour to find particular goals, that if attained,
1.1 1.2 1.3 1.4 1.5 1.6 Reason for choosing the topic Aims and objectives Company background Definition of motivation Key factors of motivation Motivation models and theories
The results obtained are found to be contradicting with Herzberg’s Two-Factor Theory. The study revealed that the strongest motivation factor with the highest significance level on job satisfaction is the working conditions, which is a hygiene factor. The subsequent factors that motivate the sales personnel reported are recognition, company policies and
An incentive pay program can reward employees who continue to produce superior work or encourage employees who already produce good work to best. Sometimes, use an incentive system when employees are lack of enthusiasm of getting down to work and improving things. If everyone in the same job classification gets the same pay, there is no real incentive to do an outstanding job (French, 1990). Various incentive plans used to motivate all employees such as production staff, sales staff, administrative staff and managerial and professional staff on an individual basis. To be improved employee work performance, the incentive pay programs need to be fairly matched with the employees’ expectation. Properly designed and maintained incentive pay program has the potential to increase employees’ productivity and work performance.