Question 1. You are a recently appointed Sales Manager for a manufacturer of small engines. The company has grown rapidly over recent years, but its profit margins have been declining and this is one of the key issues that you have been hired to address.
After three months on the job, you have become aware that the company’s nine salespeople are focused on closing as many deals as possible regardless of whether they provide good solutions for customers. In addition, salespeople are discounting so much that your company’s margins are continuing to decrease. Clearly, your position as Sales Manager may be in trouble if this continues, plus your personal bonus is based upon achieving profit margin objectives.
When you have discussed this with the salespeople, they indicate that in the past they have been encouraged to focus on sales volume and not the profitability of deals.
Some changes are required otherwise the profitability targets of the organisation and your personal bonus will not be achieved. What steps do you undertake to resolve the situation and why do you undertake those steps?
It is important for the Sales people to be able to have clear goals so that they may correspondingly direct their behaviour towards the achievement of these targets. If they have been accustomed to believing that they will have maximum pay-offs in increasing their sales volume, then they will continue to act as if this strategy will yield them maximum benefit. The first step I will do is to hold a general assembly which will focus on this change of mindset. I will clarify with them that it is profitability and not merely sales volume that will give both them and the whole unit maximum yield. This is consistent with the essence of expectancy theory.
Expectancy theory supports the contention that people choose the behaviour they believe will maximize their payoff. It states that people look at various actions and choose the one they believe is most likely to lead to the rewards they want the most. This theory has been tested extensively. It has been found that expectancy theory can do an excellent job of predicting occupational choice and job satisfaction and a moderately good job of predicting effort on the job. Expectancy theory implies that the anticipation of rewards is important as well as the perceived contingency between the behaviours desired by the organisation and the desired rewards. The theory also implies that since different people desire different rewards, organisations should try to match rewards with what employees want (Weathersby, 1998). In other words, if the sales people realise that they will have more reward if they focus on profitability, then they will work towards this changed goal. What is important is to be able to effectively clarify what the goal is, why it was changed, and why it is crucial to achieve it.
This change in mindset among the sales people may also be perceived as a change in the vision and its clarification. It is important for me as a Sales Manager to have a clearly defined vision, both on the task and people sides of the business. This speaks of the effectiveness of their leadership, which is both people-oriented than task-oriented. All leaders have the capacity to create a compelling vision, one that takes people to a new place, and the ability to translate that vision into reality. Modern leadership literature frequently characterises the leader as the vision holder, the keeper of the dream, or the person who has a vision of the organisation’s purpose. If the Sales team is one in achieving a profitability target and they know the specific objectives that they have to hit to contribute to this overall goal, then I would be more confident that the overall goal of the team would be achieved.
Personal vision includes my personal aspirations for the organisation and acts as the impetus for the my actions that will link organisational and future vision. My vision needs to be shared by those who will be involved in its realization. Setting of a profitability target for the sales team is just one manifestation of visionary leadership, where a clear goal is identified – but I also have the responsibility to link this to more strategic organisational thrusts.
Question 2. You are the Sales Manager of an electrical goods distributor whose main customer base is electrical retailers. One of your most successful salespeople struggles to submit the weekly written reports that you require from all of your salespeople. This salesperson never submits the reports on time, you usually have to repeatedly request them and when they are submitted they don’t contain the customer information or sales activity information that you want. This also makes it difficult to keep these customer records up to date in the company’s CRM system and limits the ability of sales support staff to help manage these relationships. The rest of the salesforce submit these reports, in hard or soft copy, on time and without complaint.
What do you do about this issue and why?
The first thing I will do as a Sales Manager is to hold a performance discussion with my salesman because of this poor work habit of delayed report submission. During the discussion, I would clearly state why we are holding the session and its importance. I would then allow him to express concerns about why he is always not punctual in churning out his reports. I will try as much as possible to still maintain his self-esteem despite the correction, and also to listen attentively to his concerns. At the end of the session, we should have concurred on the best course of action to be able to resolve the problem. We will then set a work plan, specifying who will do what and by when.
The clarity of a goal is important – it needs to be specific, measurable, attainable, realistic and time-bound. I should ensure that the goal of report submission comply with these criteria of well-defined goals / objectives. Moreover, I should also be able to show the linkage of this positive behaviour of goal submission to reward. If no such linkage is made, the salesman may not be motivated in attaining the goal set out for him. According to goals setting theories, employees set goals and those organisations can influence work behaviour by influencing these goals. The major concepts in the theory are intentions, performance standards, goal acceptance, and the effort expended. These concepts are assumed to be the motivation. Participation in goal setting should increase commitment and acceptance. Individual goal setting should be more effective than group goals because it is the impact of goals on intentions that is important. In goal-setting theory the crucial factor is the goal. Tests of the theory show that using goals leads to higher performance than situations without goals, and that difficult goals lead to better performance than easy ones (Maczynski & Koopman, 2000). Although participation in goal setting may increase satisfaction, it does not always lead to higher performance.
Second, I will also ensure that continuous monitoring and feedback transpires after we hold the performance discussion. I will coach him further if necessary until he is able to correct his poor work habit. A feedback system can be a form of reinforcement system and a motivational factor for management in promoting positive behaviour among employees. Following Skinner’s reinforcement theory, I can use the feedback system as a form of motivational lever in shaping my salesman’s behaviour and in helping him aim for higher goals. I can also provide incentives for positive behaviour.
It is important to provide feedback to the salesman to assess his or her strengths and weaknesses so that further training can be implemented. Although this feedback and training should be an ongoing process, the semi-annual evaluation might be the best time to formally discuss his performance, but performance coaching sessions across the performance period is encouraged.
Question 4. If you pay a sales person enough money you will have a well motivated sales person. Do you agree? Explain your reasons.
While pay is an important consideration for most workers, there are more important considerations that affect an employees’ intention to stay with the organisation and to work optimally. My salesmen’s intrinsic motivation will cause them to exhibit organisational commitment even as he realizes that the pay offered by the company is not necessarily the most competitive. While this is the case, tt is important to ensure that their pay is equitable – while it is not the highest in the industry – since this is intricately related to the my salesmen’s sense of job satisfaction.
I should also ensure that the rewards given to my sales people are equitably given. Equity theory suggests that motivated behaviour is a form of exchange in which individuals employ an internal balance sheet in determining what to do. It predicts that people will choose the alternative they perceive as fair. In other words, my sales people should find that those who contributed more to goal attainment are also rewarded as much. That is, reward is a function of performance or merit.
I realise that motivating workers well in these times of change demands a balanced combination of emotional and intellectual levers. Any manager should learn to use and combine as many needs, factors, modes of reinforcement, and outputs into their message as may be necessary to motivate their employees (Legge, 2005). As Sales Manager, I can become a good motivator by knowing two things well: first, which tool or level of motivation will work for each and every employee, and second, how to motivate and communicate effectively with the use of positive reinforcement. On the part of my company, management practices which can serve as effective reinforcers include self-esteem work shops, flexible work arrangements, customized benefits packages, individual and team performance-based reward systems, among others. Each employee is different thus their motivating factors vary from one and other. My task should be to locate motivational factors of each individual or group in order to develop a motivational environment. This will assist the me in creating a better working environment enhancing productivity and job satisfaction.
Leaders and managers like myself are the ones that provide motivation and vision to any organisational undertaking. I should posses the capabilities, abilities, and skills of a leader in order to create a motivating, working environment. Only in having such effective and motivational leadership can the organisation be assured of a healthy, sustainable, and committed workforce.
Word Count: 402
Legge, K. (2005). Human resource management: Rhetorics and realities. Anniversary edition. Basingstoke: MacMillan.
Maczynski, J. & Koopman, P. (2000). Culture and leadership profiles in Europe: Some results from the GLOBE study. In Koslowsky, M. & Stashevsky, S. (eds.), Work values and organisational behaviour toward the new millennium. London: Macmillan.
Weathersby, G. B. (1998). Leadership at every level. Management Review, 87(6), 5.