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Sales Force Plan

Scenario
You have been the District Sales Manager for Z-Mobile (a nation-wide cell phone company) for the past 2 years. You’ve been noticing a decline in sales, and your Sales Managers are reporting that the Sales Representatives at many of the stores are not feeling very motivated. You think this is partially due to the current compensation program in which all employees are paid a base salary without any bonuses or commission. Your plan is to unveil a new compensation program that you believe will increase employee motivation and lead to a significant increase in sales. You will also be creating a new job description for Sales Managers that refocuses their tasks and responsibilities. Additionally, you will use a motivational theory to retrain all current Sales Managers.

Instructions
In a 2-3 page Word document, please address the following.
Explain the pros and cons of the current compensation program.
Provide your recommendation and rationale for using a different compensation program that you believe will better motivate employees and lead to an increase in sales.
Identify which motivational theory you will use to retrain all current Sales Managers and explain your rationale. Include which types of rewards you will use based on your selected motivational theory.

Sample Answer

Z-Mobile: Boosting Sales Through Motivation

Current Compensation Program Analysis:

Z-Mobile’s current compensation program offers a flat base salary. Let’s explore the advantages and disadvantages:

Pros:

Simplicity: Easy to administer and understand for employees.
Security: Provides a predictable income stream.
Fairness: Ensures all employees receive the same base pay.

Full Answer Section

Cons:

Low Motivation: Lacks incentive for exceeding expectations.
Limited Earning Potential: Doesn’t reward high performance.
Demotivation: Can lead to complacency and a “just getting by” attitude.

A New Approach: Performance-Based Compensation

I recommend a performance-based compensation program that combines a base salary with variable pay components like commissions and bonuses. Here’s why:

Motivation: Directly links rewards to performance, increasing motivation and encouraging employees to strive for better results.
Increased Sales: Incentivizes exceeding sales targets, potentially leading to significant sales growth.
Improved Engagement: Employees feel a sense of ownership over their earnings and become more invested in the company’s success.
Fairness: Rewards top performers and reflects individual contributions.

Motivational Theory: Expectancy Theory

To retrain Sales Managers for the new program, I propose using Expectancy Theory. This theory suggests motivation is influenced by three factors:

Expectancy: Employee belief that effort will lead to desired performance.
Instrumentality: Employee belief that performance will lead to rewards.
Valence: Value placed on the rewards offered.

Retraining Program:

Clarity: Emphasize clear performance expectations and metrics for earning commissions and bonuses.
Transparency: Explain how the compensation plan works and how rewards are calculated.
Attainable Goals: Set achievable sales targets that are challenging yet motivating.
Recognition: Publicly acknowledge and reward top performers to reinforce desired behavior.
Valuable Incentives: Offer a variety of rewards, including commissions, bonuses, trips, and additional paid time off, to cater to different preferences (intrinsic and extrinsic motivation).

Expected Outcome:

By implementing a performance-based compensation program and retraining Sales Managers through the lens of Expectancy Theory, we aim to:

Increase employee motivation and engagement.
Drive higher sales performance and revenue growth.
Improve company culture by fostering a results-oriented and competitive spirit.

Additional Considerations:

Training for Sales Representatives: In addition to Sales Manager retraining, consider training Sales Representatives on the new compensation program and effective sales techniques.
Monitoring and Adjustments: Regularly monitor the effectiveness of the new program and make adjustments as needed.

By implementing these recommendations, Z-Mobile can create a more motivated and results-oriented sales force, leading to a significant increase in sales and long-term success.

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Sales Force Plan

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Z-Mobile: Boosting Sales Through Motivation

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