Compensation for Sales Force

There are three basic compensation plans for sales force
1. Only Salary ( No incentives)
2. Only Incentives ( No Salary )
3. Combination of fixed salary and Variable salary componenet (incentives)

    Incentives can be monthly, quarterly, bi-annually or yearly.  Percentage of variable compnment to the fixed component varies from company to company and nature of sales operations. In creative salesmanship the Variable componenet is highest and in order taking salesmanship, it is the lowest.

Provision of good TA & DA, well designed reward scheme and options for buying stock are other parts of compensations.

Other fringe benefits can also be provided such as company's vehicle, laptop and mobile, family insurance plan, etc.

Prof. Prasanna Shembekar
Asst. Professor, Tirpude Institute of Management Education, Nagpur (India)
http://www.tirpude.edu.in

Motivating Sales force :

Motivation is essential for the sales force as they always need to set higher levels of goals and achieve those in a given time frame. A good combinationof motivators keeps the team on track and sets higher standards of performance,too.

1. Expectancy theory :  Motivation is a function of expectation, valence and instrumentality    M = E*V*I
Expectation : Will closing sales  give me decent incentives or sales conference in Dubai?
Instrumentality: Is making regular calls and follow ups  will lead to closing sales ?
Valence: Do I really value incentives or sales conference in Dubai?
If these three things work then only I have a motive to perform.

2. Theory X & Theory Y
X people - negative motivation, hire and fire threats, target compliance
Y people - Incentives, conferences, gifts, perks and recognition

3. Herzberg's 2 factor theory
Hygine factors -  Salary should be decent, effective sales tools, well defined sales rout, acheivable sales quota, good boss, good TA & DA
Motivators- Incentives, best sales awards, recognition, career growth prospects, vertical growth, participative management

4. Job design theory- 
Job engineering- decent work place, internet connectivity, ease of reporting, telecommutation and flexi hours
Job rotation- work on different clients, differnt products, differerent markets
Job enlargement - extended territorry, extended product ranges, handling end to end clients
Job enrichment- Sales planning, forecasting decisions, promotions, challanging assignments, designing marketing schemes and strategies

5. Management by Objectives (MBO) :
Working closely with the supervisor in a diad leads to very higher level of motivation and sense of importance to the sales person. He / she is able to achieve the sales quota per moth with minimum deviation and deviation if any , supervisor knows the reasons for it.

Prof. Prasanna Shembekar
Asst. Professor, Tirpude Institute of Management Education, Nagpur (India)
ref : Anca -Mihalea, Revista Română de Statistică Trim. I/2013, accessed from: Revista Română de Statistică Trim. I/2013