Chapter 19

Sales force Motivation

Theories of job performance suggest that motivation is the key determinant of performance (Weitz et
al 1986). A well-motivated sales force will expend more effort in the achievement of organizational
goals; conversely a de-motivated sales person will be costly to the company in terms of lower
performance. Motivating salespeople is thus an important part of the sales manager’s job. Sales
Mangers have, however, found the task of motivating their salespersons to be difficult (Doyle and
Shapiro, 1980) and more so what they perceive as motivators and demotivators for salespersons vary
from what salespersons’ want (Box 9.1).

Having a sales person with higher skills than required can have as much a negative impact in a long
run, as having a sales person with low qualification and low skills. As, the person with skill levels
higher than what are required for the job would soon be frustrated in the present job. He could
demoralize the other members of the sales team also.

Some of the sales force motivators can be classified on the three theories as follows:

Table 9.1 Motivational theories and Sales motivators

Maslow Alderfer Herzberg Sales force motivators

Physiological and Existence Hygiene Salary
safety needs Commission incentive
Group incentive
Basic training
Social needs Relationship Encouragement & Contact of supervisor
Sales meetings
Esteem needs Growth Motivators Publicizing comparative performance
Advanced training
Special perquisites
Travel prize
Participative goal setting
Opportunity for promotion
Individual incentives
Self actualization Special recognition for outstanding performance

The lower level needs (physiological and the safety needs as per Maslow, Existence needs as per
Alderfer or part of the Hygiene needs as per Herzberg) pertain mainly to the monetary incentives
(except for basic training).

Higher level needs (Social, esteem and self actualization needs as per Maslow, relationship and
growth need as per Alderfer and motivators of Herzberg) are primarily non monetary incentives
(except for individual incentives). Gray and Wert-Gray (1999) also refer to sales motivation plans
using higher order rewards (e.g., personal growth, career development) and lower order rewards
(pay, fringe benefits).

Becherer(1982) presents a Job Characteristics model for sales motivation. The basic thrust of the job
characteristics approach is that motivation, satisfaction and job performance are viewed primarily as
functions of task design. More specifically, the model identifies five core job dimensions that lead to
psychological states which in turn would be related to the personal and work outcomes This process
would be moderated by individual differences on how salesperson reacts to work situation (figure
9.2).

Figure 9.2: Job Characteristics Model of Sales Motivation

Core job Critical Personal and

dimensions psychological work outcomes
states

Skill Variety, Task Experienced High internal work

identity & Meaningfulness of motivation
significance work

Autonomy Experienced High general job

responsibility of satisfaction
work outcomes

Feedback Knowledge of High growth

results of work satisfaction
activity

Moderating factors
Individual differences

9.2 Motivators
As seen in sections 9.1 there are both monetary and non monetary motivators. These monetary and
non-monetary incentives should address the dimensions of the expectancy theory (satisfy a need, a
positive correlation between efforts and performance and favourable performance should result in a
desirable reward).

Monetary incentives
“Though money is just (one) part of a motivational plan, it is a fundamental component” 1. While an
individual should have atleast a threshold level of monetary incentives (to satisfy basic needs); higher
levels of the monetary incentives can also satisfy social needs and esteem needs.

The different types of compensation packages that are followed are:

Fixed salary: This provides some financial stability and security to the sales person

Fixed salary plus bonus: Bonuses are lump sum payments made at periodic intervals to the sales
force. Apart from security, bonuses can be given for the achievement of outcome goals. Foulkes
(1985) states that bonus plans can stimulate team work, improve employee communication, increase
productivity and give firms a competitive edge in recruiting and retention.

Variable salary: The variable salary could be (a) commission-based structure, where the sales person
is paid a commission for every unit sold or (b) slab system, here also the salary is variable, however,
the commission is not paid for every unit sold. The salary shifts from one slab to another after
achieving a specified quantity of sale (slab). The salary level for sales within a slab would be constant.
Figure 9.3 shows the commission and slab based salary structure. In the commission based structure
the salesperson gets a commission of 0.5 for every unit sold, whereas in the slab system, a

1
[Link]
salesperson would reach the higher salary slab only if the sales are increased by 5 units. For the first
5 units the salary is constant at 100 and when the salesperson reaches 5 units of sale then the salary
jumps to 102.5. This way for every 5 units of sale the salary jumps to the higher slab. Sales increases
within the slab would not benefit the salesperson, unlike the commission based salary structure. The
salesperson’s motivation would be to move from one slab to another, rather than trying for
incremental sales.

Figure 9.3: Commission and Slab based salary structure

110
108
106
104
Salary

102
100
98
96
94
1 4 7 10 13 16
sales units

Commission based Slab based

The advantages and disadvantages of the different monetary plans are given in table 9.2.
Table 9.2 Summary of Financial Compensation Plans
Type of Plan Advantages Disadvantages Common Uses
Salary Simple to administer; No financial incentive to Sales trainees; sales
planned earnings facilitates improve performance; pay support
budgeting and recruiting; often based on seniority, not
salesperson’s loyalty merit; salaries may be a
enhanced; more control on burden to new firms or to
nonselling activites those in declining industries
Commission Income linked to results; Difficult to build loyalty of Real estate; insurance;
strong financial incentive to salesforce to company; less wholesaling;
improve results; costs control of nonselling securities;
reduced during slow sales activities automobiles
periods; less operating
capital required
Combination Flexibility allows frequent Complex to administer; may Widely used-most
reward of desired behavior, encourage crisis-oriented popular type of
may attract high-potential objectives financial pay plan
but unproven recruits
Ingram et al (2004) ([Link].213)

Non-monetary incentives:
Extrinsic motivation is created through rewards. The central problem with rewards is that, like
punishment; they are attempts to control people. They are ways of trying to do things to people as
opposed to working with people. And in the long run, “we're never going to be able to get what we
want by using techniques of manipulation” (Anonymous 2000). Specifically, the research has found
 that with most tasks-especially those involving creativity--performance actually declines when
people see themselves as working to get a reward, as opposed to when no reward is involved.
So, in addition to rewards, the companies need to focus on other motivators that focus on the
salesperson as an individual within the firm and society. For instance, because of the low prestige of
salespeople, firms have given them better-sounding titles to motivate them (refer chapter 2).
Advancements in their career are often as important to salespeople as a good compensation. Besides
career opportunities, a firm can work with a recognition programme that makes public the fact that
salespeople belong to the group. Moreover, it is important to give salespeople responsibilities (Blois
and Sonke 2000).

Companies need to judiciously use both non monetary and monetary incentives to motivate the sales
force.

9.4 Framework for the planning motivational schemes for salesperson.

Using the above case study a framework for planning and implementing motivational schemes has
been developed (figure 9.4). As seen in the case there are some selling jobs, which have a low
vocational esteem, and some selling jobs, which have a higher vocational esteem. So, the company
first needs to improve the vocational esteem of the job, if required. If the company does not address
the vocational esteem then the other motivators would have only a short-term benefit. The
salesperson would continue to look for other career options, with greater vocational esteem, at the
cost of his involvement in the current job.

After addressing the vocational esteem the company should create a proper environment for the
sales person to perform. This includes appropriate work culture, targets and territories to help the
sales person to perform. Finally, the rewards should commensurate with the effort 2.

Figure 9.4: Framework for the planning the motivational schemes for sales person.

Type of selling

Address Vocational esteem

Functioning of the job

Improve work culture Targets and Territories

Rewards from the job

Monetary reward Career prospects

Improving the Vocational esteem

Improving vocational esteem should start with proper selection. Part of the dissatisfaction with the
job could be because there was a wrong fit between the individual’s expectations and the
Organizational needs. To overcome this, the selection panel should first thoroughly assess the
Individuals strength before matching them with the requirements of the job (refer chapter 5 for
recruitment methods). Subsequently the company should make the sales force feel that their job is

2
Territories and Target setting, which are dealt in other chapters, are not discussed here.
crucial. As mentioned in chapter 1, HLL gives a lot of importance to its sales force and they are made
to feel that their job is very important.

The superiors should also help them by discussing their career prospects. This would not only
enhance the image of the superiors in the eyes of the sales force but would also involve a significant
shift from just being product (i.e. sales oriented) to process (here people) oriented. This is specially
important when sales people join a company in need of a job and later feel career growth is slow.

In addition, companies should have a well-structured orientation programme for the sales force. The
objective of the oreintation program should be: -

1) The salesmen should know about the general organization of the company and its
products.
2) The salesmen should know about the sales procedure in the company.
3) The salesman should come to know the various customers/ dealers, distributors and the
retailers.
4) The salesmen should be aware of the various rights and responsibilities of the job.

For example, Crompton Greaves has a structured orientation programme:

The company ensures that its salesforce are well trained especially with regards to the
technical aspects of the selling process. It provides a training of six months to the newly
inducted salesforce. This training module includes:
o Induction training for a week where trainees are made aware of the basic philosophy
of the company.
o Thereafter they are sent to the factories (of the SBUs to which they are recruited) for
a period of two weeks.
o The next step in the training process include classroom sessions for two weeks
where sufficient knowledge with regards to the technical details of the products and
their applications is imparted.
o The last part of the training process includes on-the job training for six weeks where
the trainee is kept with one of the senior salesperson in the SBU. At the end of the
training period he is given independent charge

Work culture:
Work culture should such that it provides an indication that the company cares for its sales force.
Since the sales force are stationed at different locations, the primary responsibility of defining the
work culture would be of the immediate supervisor. Moreover, almost fifty percent of the components
that affect the sales force (the work pressure, freedom on the job, responsibility, feedback, power
given to discharge duties) are dependent on the supervisors. It is therefore essential for the sales
supervisors to know how to create a proper work environment for the sales force.

The sales supervisors need to therefore assist salespeople in analyzing their performance and
suggest ways to achieve better performance in the future. In a failure situation, sales managers could
use the poor performance as an opportunity for identifying development needs and not for criticism
(Johnston and Keysuk 1994). Therefore the encouragement and contact by the supervisor is very
important for improving the performance of the sales force (Monoky 1994 and De Coninc 1989
quoted earlier also refer to these motivators). Many companies motivate their salesman use the
services of the immediate supervisor.

 In Ashapura, salesperson contact with supervisor is seen as very important and has found to
be a wonderful motivator.
 Cafeé Coffee Day boasts of inculcating a very informal work culture at the workplace. Right
from the stage of training, the sales staff is groomed on informal basis with everyone being
addressed on a first name basis. There are no formal distinctions or lines of demarcations
 between people at different level of hierarchy and everyone is easily accessible to every
other. Enough freedom is given to the sales staff to keep their spirits and attachment with the
organisation on an upbeat. They have complete flexibility in selecting their work shifts and
they can change it on a weekly basis by filling in the roster, which keeps the schedule of the
shifts for coming week. Leaves are easily granted with the sales manager displaying complete
faith in the staff with respect to the reason cited. A staff can call as late as three hours before
the start of the shift and request for a leave. While on duty, each of them have to be in
uniforms with the name tag properly placed at the left side of the chest above the pocket and
a cap.
 Yokogawa Blue Star has no monetary incentives and promotions but it motivates by
intangible measures like
o Independence to Work
o Frequent interaction with superiors
o No victimization or pulling up for failures
The other motivators to improve the work culture would be special perquisites and sales meetings.

Special perquisites also show that the company cares (as seen in Box 1, fringe benefits are valued by
the salespersons). Examples of companies using special perquisites as a motivator are given below.

 Crompton Greaves feels that sales incentives are not the best motivator for performance.
Instead excellent perquisites are provided to the salesforce.
 Tata Motors provides free medical treatment to its employees at its own hospital and if
treatment cannot be provided in their own hospital, then the expenses at other hospitals are
also borne. This medical facility is extended not only to the employee but also to his spouse,
children and to dependant parents.

Sales meeting is another important motivator for the salesman as it not only provides an opportunity
to interact with the top management to discuss their problems but it also provides a good platform
for peer contact, which is very low in the sales function.

 Sales meetings of HLL are held in a posh hotel in the metro/large town, where the marketing
team from the head office visits the sales team and interacts with them. The sales force views
these meeting as an interaction with the top managers. Such meetings boosts the morale of
the sales force.
 Reckitt conduct sales meets at exotic locations. Here all the company sales force including the
missionary salesforce gets an opportunity to interact with top management.

Career prospects:
Motivators relating to career prospects include; special recognition for outstanding performance,
opportunity for promotion, advanced training and development, participative goal setting and
publishing competitive performances.

Special recognition for outstanding performance: Gilbert 2003 and De Coninc 1989 have mentioned
that special recognition motivate sales persons. Some examples of companies using special
recognition as a motivator are cited below:

 At Ashapura, where sales occur mainly as a team effort, an article is published in each
alternate issue of ‘Aakansha’, an in-house journal, about the most prolific sales team. Such
recognition has had tremendous influence on salesperson’s performance.
 Cafeé Coffee Day (CCD) has an “Employee of the Month” award. The company selects the best
sales person in each outlet and then the best employee for the city and finally one out of all
across India as the employee of the Month. The name and photograph of the sales person
 selected is displayed in all the outlets across India and also in the company newsletter, The
Beat.
 One very important Non Monetary Motivational Technique undertaken by Tata Motors is the
annual dinner with the Executive Director and the Top officials of the company. Under this
scheme, employees who have been consistently securing A (the highest grade in the
evaluation process) or B+, are called to the Head Office to dine with the top notch company
officials. This is considered very prestigious and very select people are allowed to attend this
dinner

Opportunity for promotion: Tanner and Dudley 2003 have referred to opportunity of promotion
as a motivator.

 Indo Gulf Fertiliser company does not believe in giving any monetary incentives to the sales
force. Remunerations are in the form of salary and perks, but a major source of motivation is
a scope for fast internal promotion.
 Crompton Greaves follows fast promotions to deserving candidates. The company thus
recognises hardwork and diligence. This keeps the better performing salesman satisfied and
also serves to motivate the other salesmen to improve their performance.

Advanced training and development: Monoky 1994 has indicated that advanced training and
development act as motivators to salesforce.

 In Indo Gulf Fertilisers a large stress in training is given throughout the career of the
employees. In a meeting between every salesperson and his immediate superior, the
strengths and weaknesses of the salesperson are analyzed and on that basis five areas for
training are identified. Then the human resource department organizes a minimum of three
special outdoor training programs for each salesperson.

 In HLL every member of the sales force is sent on a training programme for a week every
year. Here, the salesperson gets an opportunity to meet not only sales people from other
regions and territories, but also employees from other functions. Often, top managers take
sessions in these training programmes and it allows the participants to engage in informal
conversation with the top brass. All this goes on to boost the morale of the sales force.

Participative goal setting: Goal setting theory suggests that managers could improve sales force
motivation by assigning goals which are specific, difficult and of varying time horizons. It also
suggests that performance would be improved by providing feedback on goal accomplishments and
by increasing goal commitment (Kopf 1989).

 In Indo Gulf Fertilizers Ltd. the salesperson and his immediate supervisor identify 5 key
areas where the focus of the salesperson has to be. They distribute 200 points among the 5
areas. At the end of the year, the points are calculated for the actual efforts materialized. A
minimum of 150 points is expected from the salesman and 180 points makes the salesman a
star performer. This system is a participative process and involves interactive effort from
both the salesperson and the supervisor. The Evaluation parameters thus set are more
realistic and the motivation levels of the salesman are higher because they were involved in
the objective setting process.

Travel prizes: Travel incentives are widely used to motivate salespersons. Travel incentives are
considered to be a practical way of implementing many of the ideas and concepts contained in value
theories and goal setting views of motivation (Hastings et al 1988). They are found to be popular and
successful motivators (Ambron 1985). They contribute to people’s needs for achievement and
recognition, both of which after reasonable pay, are vital for motivation (Locke and Henne, 1986)
  Gifts are given to sales staff of HLL if they are able to meet or exceed the sales target. The
nature of gift depends on the extent of achievement. In case of unprecedented achievements,
free foreign tours are offered to the sales staff and his family. Many other companies also use
travel prizes as a motivator.

Publishing competitive performance: Publising competitive performance allows salespersons to

compare where they stand and this could motivate them to move higher in the ranking.

 Tata Motors: The company uses a tracking mechanism called the KRA (Key Result Areas).
Under this methodology, the company has identified certain parameters on the basis of
which an employee’s performance can be tracked. There are a certain number of parameters
which have different weights assigned to them. The performance under each criteria is
graded and thus the salesperson’s overall effectiveness is graded. Apart from this, there are
several other qualitative factors like dedication, motivation, interest dynamism etc. which are
also considered before the final grading is done. On the basis of the final grading employees
are ranked against each other. This ensures that a bell curve is drawn and depending on the
performance, rewards are meted out.

9.5 Framework for Compensation package

The section analyses the financial packages of some companies to develop a framework for designing
the compensation package as a motivator for the sales personnel.
Ashapura sells Bentonite in a less competitive market (also refer chapter on target setting for
more details of Bentonite). In Ashapura sales teams act as groups, and the evaluation is often
based on team performance. Individual contribution is difficult to segregate since the
dependency between the sales staff and quality control or logistics staff is too large. Hence
like many Industrial sales functions, the compensation of sales force as well as sales
supervisors is basically of fixed monthly nature with little or no variable component.
However, the compensation range in Ashapura, is better than most sales scenarios in a
similar industry and the motivational objectives are fulfilled. This type of responsibilities
borne by the sales force goes hand in hand with the fixed compensation pattern, which
provides a lot of security.
Britannia Salespersons in early nineties had only a fixed salary, which compared with the
best in the industry. There was no performance-linked bonus for the salesmen as there was
no major competition in the cream biscuit market. This was done to avoid dumping of stocks
at the retailers even when there was no demand. Biscuits being a perishable item with a
short shelf life, such practices of dumping could result in a loss to the company in the long
run. Hence the salesmen's primary role was to meet the retailers’ demands and to execute
promotional campaigns at the retailer outlet.

ITC’s salesmen compensation plan is mainly composed of a variable component, which is a

commission, based on sales achieved.

Coffee Day follows a policy of a mixed compensation package, having both fixed and variable
components. The variable component is based on performance of the outlet in which the
person is employed. Employees of that outlet share a percentage of profits of that outlet
equally. Although the exact figures and percentages were not available, the company
maintains that they are the highest payers in the industry.

Coron India is an affiliate of Ion Exchange (India) Ltd. and deals with selling of boiler
treatment and cooling tower treatment chemicals in a moderately competitive market. The
company has a two-pronged strategy for the compensation of the sales people. A fixed
 component (primary focus on the employee sustenance and family welfare) and a variable
component (primary focus on the sales achieved by the salesperson).

Aashirwad ready to eat foods in a competitive food market, recognizing that the efforts of the
sales people would play a significant role in the success of the product, designed the
following incentive schemes:
Fixed salary plus a variable component as under:
Sales Variable component
10-20% over the target 5% of the salary
20-30% over the target 10% of the salary
>30% over the target 15% of the salary

Till the last couple of years, Tata Motors had a fixed pay structure. This led to a lot of
hardworking and efficient employees search for greener pastures. The company has now
shifted to a compensation scheme which incorporates a substantial amount of performance
based bonus. Under this scheme, each employee is given a raise and a bonus at the year-end
depending on his performance during the year.

TATA Steel Tubes Division operates in an environment, where relatively less innovative
marketing tactics are required. The company has a fixed salary system for its employees with
the normal company’s procedure for annual increments of its employees.

The variation in the compensation packages of the above examples could be explained by the study of
Coughlan and Sen (1989). The study states that while developing a compensation plan the major
issues that need to be considered are the firm's/ sales objective and the nature of the sales response
function.

The firm’s objective (as seen in the chapter on target setting) could be to ensure the sales effort is
directed towards developing the market or increasing the sales. The nature of the sales response
function could be dependent on (a) the product type, which would determine whether sales requires
an individual or team based effort or (b) the market conditions. Table 9.3 maps the above companies
along with their salary structure on these dimensions (firm’s objective and sales response function).

So, the generalized framework for the compensation package taking into accounts the firm’s objective
and the sales response function is given in table 9.4

Table 9.3: Company and their Salary structure mapped on Firm's objective
and the nature of the sales response function
Sales response function Firm’s objective
(Product type/ Market development No market development
Market conditions) required required
Sales is an High Competition Aashirwad- ITC-
Individual salary partly fixed and Salary mainly composed
activity partly slab based of commission based
variable component variable component
Moderate competition Tata motors- Coron-
Fixed Salary plus Bonus Salary composed of fixed
as the Variable as well as well
component commission based
variable component
 Low competition Britannia. Tata tubes.
Fixed salary Fixed salary
Sales is a Group activity Coffee Day- Ashapura-
Fixed salary plus Fixed salary
productivity bonus

Table 9.4 Generalized framework for compensation package

Sales response function Firm’s objective
(Product type/ Market development No market development
Market conditions) required required
Sales is an High Competition 50% Fixed and 50 % 25% Fixed and 75%
Individual Slab system variable
activity Moderate competition 75% Fixed and 25% 50% Fixed and 50%
bonus variable
Low competition Fixed Fixed
Sales is a Group activity Fixed plus productivity Fixed
based bonus

Monetary reward for sales persons followed in IDBI Bank:

IDBI Bank gives the sales force the flexibility to decide on the incentive structure it wants to follow.
The sales person has the freedom to decide between a float based incentive structure where the sales
person gets incentives for the Quality of the account he has sourced. Quality here denotes the average
balance that the account maintains with the bank (it’s the balance in the current account that fetches
the bank income)
Alternately the sales person can choose a point based incentive scheme which is slab based and every
‘type’ of account sourced fetches him/her certain number of points. The total number of points he so
gets in a month, cumulatively, depending on the slab he falls in gets converted into rupees.
The sale person has yet another choice of en cashing rupees based on a minimum number of current
accounts [Link] incentive scheme is listed as under:
For Tier 2 or Category B branches
There are two monthly incentive schemes running at the same time. And the retainer has the choice of
earning in any one of them
A retainer selling only current accounts and not qualifying for the slabs in the point structure will still
have a chance to earn in the 7 scale system.
In the 7 scale system the retainer has to open a minimum of 7 accounts, and will be paid as per the slabs
given below.
Where as a retainer opening less than 7 c/a's but opening s/b accounts also will have a chance to qualify
for the point wise incentive scheme.

The retainer has the choice of qualifying for any one of these schemes. Where ever he earns higher.
In the quarterly incentive scene the retainer again has a choice between a normal point based scheme
plus the 100 day bonanza scheme.
Or
or he can select the float based incentive scheme.
1>Monthly points Structure
Points Amt. Per point
0-44 Nil
45-59 15 New Joinees
60-69 15 Old Retainers
70-79 30 Old Retainers
80-99 40 Old Retainers
100-149 50 Old Retainers
150-199 60 Old Retainers
200+ 75

OR 2> The 7 Scale Scheme

open 7 Current accounts and qualify for an alternate scheme

amt Per a/c

Normal c/a 10k 200
Business Class 25k 250 yet to be launched
Business Special 50k 350
Bus. Premium Bronze 100k 450
Bus. Premium Silver 300k 640
Bus. Premium Gold 500k 800

Over and above the monthly schemes there is a quarterly incentive scheme for the retainers.
This is as given under:

3 Quarterly Scheme
Points Amount per point
0-249 Nil
250 -299 5/-
300+ 10/-

4 Plus a 100 day bonanza: This is over and above the monthly and the Quarterly Scheme

Points Amt. Per point

0-209 Nil
210-249 5/-
250 -299 5/-
300+ 5/-
350+ 15/-

or............
Float wise incentive calculations.
This is an incentive scheme where the retainer will benefit from the huge value current accounts that he
has brought in.
Here the retainer will get the incentives as listed down with respect to the float in the accounts he has
sourced.
The retainer has an option to choose between the quarterly plus 100 day bonanza incentive or this float
based incentive scheme.
The RSM's and the DSM's may also opt for any one of them for their teams.
NOTE: Any one from the float incentive and the quarterly incentive have to be selected,

The 100 day bonanza goes only with the point based quarterly incentive scheme.

Avg Float in CA Float for 100 days in Rs Quarterly Incentive in Rs

5000000 10500
6000000 12600
7000000 14700
8000000 16800
9000000 18900
10000000 21000
11000000 23100
12000000 25200
13000000 27300
14000000 29400
15000000 31500

The Process for Float Based Incentive Structure

1 Take the average balances of all the accounts sourced by the retainer in the last 3 months.
2 This average balance will be for the periods starting: when the accounts have been opened.
3 we need to multiply this avg balance by the number of days this account was present.
4 We need an average balance of 50 lacs for the last 90 days.
5 now add all the average balances totaled.
6 Divide this by 90 days.
7 This is the actual average balance on which we are to pay incentives.

Tier 1 Branches or category A Branches

There will be two monthly incentive schemes running at the same time. And the retainer has the
choice of earning in any one of them
A retainer selling only current accounts and not qualifying for the slabs in the point structure will
still have a chance to earn in the 7 scale system.
In the 7 scale system the retainer has to open a minimum of 7 accounts, and will be paid as per the
slabs given below.
Where as a retainer opening less than 7 c/a's but opening s/b accounts also will have a chance to
qualify for the point wise incentive scheme.

The retainer has the choice of qualifying for any one of these schemes. Where ever he earns higher.

In the quarterly incentive scene the retainer again has a choice between normal points based
scheme plus the 100 day bonanza scheme.
Or
Or he can select the float based incentive scheme.

1 Monthly Point Structure

 0-59 Nil
60-69 15 New Joinees Only
70-79 30 Old Joinees
80-99 40 Old Joinees
100-149 50 Old Joinees
150-199 60 Old Joinees
200+ 75 Old Joinees

2 The 7 Scale Scheme

open 7 Current accounts and qualify for an alternate scheme
amt Per a/c
Normal c/a 10k 150
Business Class 25k 250 yet to be launched
Business Special 50k 350
Bus. Premium Bronze 100k 450
Bus. Premium Silver 300k 640
Bus. Premium Gold 500k 800

Over and above the monthly schemes there is a quarterly incentive scheme for the retainers.
This is as given under:

3 Quarterly Scheme
Points Amt. Per point
0-249 Nil
250 -299 5/-
300+ 10/-

4 Plus a 100 day bonanza: This is over and above the quarterly Scheme

Points Amt. Per point

0-249 Nil
250 -299 5/-
300+ 5/-
350+ 15/-
Or............
5 Float wise incentive calculations.
This is an incentive scheme where the retainer will benefit from the huge value current
accounts that he has brought in.
Here the retainer will get the incentives as listed down with respect to the float in the
accounts he has sourced.
The retainer has an option to choose between the quarterly plus 100 day bonanza incentive
or this float based incentive scheme.
The RSM's and the DSM's may also opt for any one of them for their teams.

NOTE: Any one from the float incentive and the quarterly incentive have to be selected,
The 100 day bonanza goes only with the point based quarterly incentive scheme.

Avg Float in CA Float for 100 days Quarterly Incentive

5000000 10500
6000000 12600
7000000 14700
 8000000 16800
9000000 18900
10000000 21000
11000000 23100
12000000 25200
13000000 27300
14000000 29400
15000000 31500
The incentive scheme for the team leader in points is as follows..
Total Points of the Team Incentive Amount for the Team Leader
700 Rs 1400
770 Rs 2310
840 Rs 4200
910 Rs 6825
Tata Motors

The sales team has to go for three months job training after the induction, which gives them
enough insight about the company and the product. The compensation package includes salary in +
incentive component. The incentive is named as the Performance Based Bonus (PBS). The salary
structure is as per the industry standard but definitely not the best in the industry. The incentives
include three components which are based on company performance + business unit performance +
individual performance.

The company offers an opportunity for the growth and recognition in the company in
through to very prestigious growth schemes, ESS (Executive Selection Scheme) and FTSS (Fast Track
selection Scheme). Company offers a very fast growth to the people qualifying in these tests. In
addition to that people constantly achieving good grades (A or B+) are considered in the “Talent Pool”
and are offered different growth opportunities. In addition to that the people in the Talent Pool are
from time to time sent to attend the meetings of MD and Chairman of the company in an open forum,
which is considered very prestigious. Thus in a Nut Shell Company is taking due care of Motivational
Factors of the employees but at the same time scope of frustration due to the situational factors
cannot be ruled out.
Box 9.1

A Comparison of the Perceptions of sales Mangement and Salespeople towards sales Force Motivation
and Demotivation

The study shows that sales management rate incentives based on target setting more highly as a
motivator than salespeople, also sales management rate competitions/ prizes more highly than sales
people. Salespeople, however, rate fringe benefits as a greater motivator than the sales management
perceive it to be.

Bad supervisory relations were seen as a greater de motivator by salespersons than the sales
management. Similarly, financial security, hours of work and lack of opportunities for advancement
were perceived to be a greater demotivator by the salesperson as compared to the sales managers.

Summary of differences between sales managers and salespeople

Motivators Demotivators
Sales managers value Competition/ prizes Personal problems
these factors more Incentives based on
highly than sales people targets
Salespeople value these Fringe benefits Lack of Advancement
factors more highly than Lack of security
sales managers Hours of work
Supervisory relations

Jobber, David and Roger Lee (1994), A Comparison of the Perceptions of sales Mangement and
Salespeople towards sales Force Motivation and Demotivation, Journal of Marketing Mangement, Vol
10, p 325-332.