Motivation Sales Staff And Communicating The Reward Systems

Introduction

"Motivating employees is vital if employers are to achieve maximum performance and productivity (http://www.employeebenefits.co.uk/cgibin/item.cgi?ap=1&id=1971, retrieved on 8th Oct 2007). There is a wide variety of methods available for motivating sales staff, from recognising employees' achievements by simply saying 'thank you' to more complex schemes which combine set targets with fixed rewards. Linking sales with commission in such a way can therefore assist organizational success. Staff training and incentive solutions play a vital part in increasing staff knowledge and motivation and in improving staff retention and operational quality and efficiency.

Overview of the organization

PC House Private Limited is a subsidiary of PCH Holdings (Pvt) Ltd., a well diversified local conglomerate that has interests in sectors such as computer hardware and software, pharmaceuticals, restaurant, office automation, consumer electronics, audio visuals, automobiles and property development.

PC House is a leading IT solution provider in Sri Lanka, offering customers the best options in computers and accessories with an innovative product portfolio and un-parallel after sales service. Starting its operation in Sri Lanka 10years ago, the philosophy of PC House is "to treat all customers as partners which means there is mutual trust, long term commitment and profits for both parties".

The success of this company had been the winning sales team. When managing sales, the organization has duly identified the fact that we need to set effective objectives due to reasons such as the growing competition, varying pricing strategies, quality of products and the external environment factors. Nevertheless, the factors relating to human capital have a greater impact on successive goal setting as it is the most dynamic aspect, which often changes from individual to individual. Personal attitudes and instincts will play a key role in reaching sales targets. Thus, keeping staff motivated is good for business and its long-term survival.

Business Vision

"Spearhead the country's information communications technology boom by becoming a powerhouse in providing precise innovative solutions locally, and propagate our local brands beyond Sri Lanka's boarder, and above all to maintain the highest degree of integrity and social responsibility".

Mission Statement

"To market and distribute world renowned high quality products coupled with excellent professional service levels in order to satisfy customers and to become one of the most respected ICT product supplier in Sri Lanka.

Objectives of this assignment

Key Objective - Achieving sales objectives within the stipulated time and building a motivated sales team with competent skills and experiences.

Specific Objectives

1. Understanding the benefits of sales rewards systems

2. Analyse the effectiveness of the current rewards system and the power of communication.

3. Identify gaps in the rewards system and finding alternative solutions to overcome them.

4. Deciding the best ways of improving the current rewards system and the rationale of introducing new elements.

5. Plan out ways of introducing the new system to the sales team.

6. Assess the impact of the new systems

7. Obtain a thorough understanding of the nature of rewards system and the impact of effective communication strategies.

8. Help ensure the growth of the organization by meeting the demands of customers through a well motivated sales staff.

9. Discourage sales staff retention by implementing a positive sales plan which introduces work-life balance, whilst uncovering a range of skills and activities for the sales team.

10. Identify constrains of implementing a new reward system and maintaining consistency throughout the operation.

analyze over the current rewarding system in the organization - Pros & Cons

Motivation is a compulsory element to get the maximum output from a sales person. "In a work context, the need for money may result in a drive to work harder in order to obtain increased pay" (Jobber, Lancaster, 6th ed., pp.365). Following this rule, PC House has identified the fact that monetary incentives are the key element to motivate sales people. Therefore the existing incentive policy is structured basically by providing cash benefits when reaching sales targets.

Advantages

Currently there are two incentive schemes operating in this organization. That is individual incentive scheme and team incentive method. Under the first scheme, 1% of commission is given per machine, for selling its own brand of computers. This is the internationally to encourage more sales for its flagship products rather than competitor products. Further, sales employees are benefited for managing the credit period. If the payments are received within the set credit period, the sales person is entitled for a 4% commission of the total invoiced value. Apart from these incentives the sales persons are also entitles for a commission of 3% for successful sales targets. According to Herzberg's' argument, "...increased salary through higher commission was a motivator through the automatic recognition it gave to sales achievement" (ibid, 6th ed., pp.366).

The above monetary incentives are for personal achievements since a sale is more often an individual attempt. Incentive scheme two is for team wise sales targets, basically providing non-monetary benefits. "Non financial motivators are things other than money that motivate people to work. Abraham Maslow developed his hierarchy of needs based on research about what motivates people to work" (http://www.revision-notes.co.uk/revision/803.html)

Consequently, through an internal survey PC House has found that the three main pastimes of sales people is dining-out, playing cricket and watching movies respectively. Taking this into consideration the company has structured a group incentive