1. Do you think Randy has sufficiently categorized his salespeople for motivational purposes? Why or why not? Is it practicable to provide non-financial incentives to motivate salespeople in each of the four career stage groups?
Categorization of salespeople always involves a trade-off between over-generalization and the practical applicability of these categories for HR strategy development. It is always possible to find additional sub-categories that reflect more precisely the peculiarities of the sales force of a firm or that capture individual needs of the employees. Thus, introducing a separate category for working mothers could help to address the needs of this group in a better way. However, extensive categorization would increase complexity of HR policies and would make it hard to develop and execute an HR strategy in an effective and cost-efficient way. Therefore, the decision of Randy Stuart to categorize sales force according to five career stages is appropriate considering the size of the organization and relative homogeneity of the categories formed. The only category that Randy could have added is the one for people in the plateauing phase of their career. In fact the majority of the salespeople that were put into the decline category are no longer willing or able to grow in the Sales Actions Software. The benefit of such people for the company mainly relates to their reputation and networks, while their declining performance and reduced time spent on prospective clients hampers the performance of the organization. Since these people are unlikely to change their attitude, considering that most of them are expecting retirement in the near future, it is important to assign work tasks in a way to leverage on their strengths, such as relationships with old clients as well as extensive network and experience (Easterby-Smith & Lyles, 2011).
The five categories formed by Randy have very distinct needs in terms of motivation. Randy’s emphasis is non-financial incentives, as he considers financial ones as a hygiene factor and does not see much flexibility in modifying them. Moreover, following Maslow’s logic, monetary rewards lose their motivational power beyond a certain level; hence they cannot be effective for developing a long-term incentive strategy (Gupta, 2005). It is therefore practicable and even necessary to provide non-financial incentives in each career stage group, but it is important to vary these incentives according to the group in order to ensure that all of them are effectively addressed. In addition, the mix of financial and non-financial incentives may vary depending on the career phase. Thus, in preparation stage the emphasis should be on communicating job security and future opportunities as well as on providing education and training. Financial incentives play a significant, but not a key role for this employee group. In the maturity phase, on the other hand, incentives should aim to communicate a symbolic meaning and to reinforce the existing status of the salespeople rather than to push them into new challenges. The main issue with non-financial incentives is their allocation, as they are more subjective than monetary ones and require individual approach to every employee (Fletcher, 2008).
2. What role might specific non-financial factors play in motivating salespeople in different career stage categories?
The roles of non-financial factors as well as their effectiveness clearly differ across career stages. Sales Actions Software currently uses two main non-financial incentives for motivating employees. The first one, recognitions, is most effective for employees in the establishment and maturity career stages. As these people try to build their career and already possess some sales knowledge and skills, they are more likely and willing to receive these awards. On the other hand, salespeople in the decline and establishment phases will not value these incentives as much. The former no longer strive for promotions and career development, therefore both the perceived value of the reward and the likelihood of receiving it decrease for them. The latter are not yet familiar with the job, therefore they value more training opportunities rather than recognitions. Furthermore, as they have just started their careers, they have little chance to win an award, and do not consider recognitions very motivational.
Training through podcasts and regional meetings is another non-financial incentive used by the Sales Actions Software. Its effectiveness is also quite marginal, when applied to all salespeople without distinguishing between career stages. Thus, podcasts are more popular with new employees and offer an easy way to find basic information. Salespeople use podcasts voluntarily and at their convenience. This fact should enhance motivation and make podcasts convenient in particular for people in the initial stages of their career (Kozlowski & Salas, 2010). Podcasts lose their value for sales people later on, during the maturity phase, as they contain rather basic information and their effectiveness depends on the internal desire to learn that is not very strong in people, who prepare to retire. Hence, employees in the decline phase would benefit more from regional meetings that they have to attend and where they can network with new and old acquaintances.
3. What kind of system could be developed to evaluate the impact of intangible non-financial motivational factors on the sales force and how might such a system be smoothly implemented at Sales Actions Software?
More sophisticated and personalized approach requires additional investment both in terms of money and effort. However, to ensure that intangible non-financial motivational factors are beneficial for the organization, it is necessary to develop a system to evaluate the impact of the new motivational strategy on the sales force. Such system should assess the effect of the motivational policy from several perspectives. Firstly, as the goal that Randy pursues is to enhance sales force motivation and job satisfaction, the primary measure of the evaluation system should be employee assessment of their work and of the effectiveness of specific motivational factors. This can be done through an employee survey that would be conducted both regularly and anonymously. It is also valuable to develop a questionnaire for people, who leave the company, in order to understand the reason for this career choice. The second component of the evaluation system should be more objective and rely on statistical data. Here, the success of intangible non-financial motivational factors can be assessed by measuring employee turnover, changes in productivity expressed by the number and value of contracts concluded. Finally, the viability of the new strategy is dependent on its financial impact. Therefore, the evaluation system should compare the costs of the non-financial motivational factors with their productivity benefits. Such cost-benefit analysis will serve both as an assessment of the effectiveness of the strategy and as an early warning in case something goes wrong and motivational factors do not result in the expected outcomes (Clarke & Estes, 2008).
In order to obtain more insightful results, the system should evaluate results both on the company level and on the level of career stage groups. In this way it will be possible to understand not only the way intangible non-financial motivational factors affect the organization as a whole, but also to assess their effectiveness in different career stages. Finally, this analysis should be done on a regular basis and the incentive strategy should be continuously adjusted based on the appraisal results.
4. Outline the report that Randy should send to the president of Sales Actions Software?
Randy’s original task was to outline the current motivational approaches used with the sales force in Sales Actions Software and to assess whether a unique motivational strategy can be applied to all employees no matter which career stage they were in. In his report Randy should describe the outcome of his categorization of all salespeople into five career stages and discuss the distinct features of each stage in terms of motivational drivers and employee profiles. The number of people in each category should be reported to highlight the most represented categories (development and maturity phases for Sales Actions Software) that should become the focus of the future motivational strategy. Secondly, the report to the president should include a review of the currently used motivational techniques, particularly non-financial ones (namely recognition and training) and a description of the expected effectiveness of these methods for each career stage category. Further implementation of these non-financial motivational factors for every stage should also be included into the report. Finally, the report should incorporate financial estimates of the effectiveness of the new motivational program together with the description of the system to assess the impact of intangible non-financial motivational factors. As Randy expects that the new program will require an increase of the motivational budget, such estimates would help to convince the president in the benefit of the new strategy for Sales Actions Software.
Clarke, R. E., & Estes, F. (2008). Turning Research into Results - A Guide to Selecting the Right Performance Solutions. Charlotte, NC: Information Age Publishing.
Easterby-Smith, M., & Lyles, M. A. (2011). Handbook of Organizational Learning and Knowledge Management. (2nd ed.). John Wiley & Sons.
Fletcher, C. (2008). Appraisal Feedback and Development. Making Performance Review Work. (4th ed.). Oxon, OX: Routledge.
Gupta, S. L. (2005). Sales and Distribution Management. New Delhi, India: Excel Books.
Hair, J., Anderson, R., Mehta, R., & Babin, B. (2009). Sales management: Building Customer Relationships and Partnerships. (1st ed.). Boston, MA: Cengage Learning.
Kozlowski, S. W. J., & Salas, E. (2010). Learning, Training, And Development in Organizations. New York, NY: Routledge.