THE IMPACT OF SALES MOTIVATION ON ORGANIZATIONAL PERFORMANCE

CHAPTER ONE

                                             INTRODUCTION

1.1              Background to the Study

All organizations and businesses aim to be successful and have desire to get steady progress. The current era is highly competitive and organizations regardless of size, technology and market focus are facing employee retention challenges. In order to overcome these problems a strong and positive relationship should be adopted and maintained between employees and their organizations. Human resource or employees of any organization are the most central part so they need to be influenced and persuaded towards tasks fulfillment. In trying to achieve prosperity, organizations design different strategies to compete with other organizations and for increasing the performance of the organizations. A very few organizations believe that the human personnel and employees of any organization are its main assets which can lead them to success or if not focused well, to decline. Unless the employees of any organization are satisfied with it, are motivated for the tasks fulfillment and goals achievements and encouraged, none of the organization can progress or achieve success.

To compete in today’s global markets, organizations strive to deliver their products (physical) and services (intangible) in both an efficient and effective manner. In service supply chain, human labour forms a significant component of the value delivery process and physical handling of a product leads to standardized and centralized procedures and controls in manufacturing supply chains, (Sengupta et al 2008). The focus of efficiencies in service supply chains is on management of capacity, flexibility of resources, information flows, service performance and cash flow management. Sales force in any company big or small, manufacturing or service, are charged with generating product sales from assigned customer accounts in independent territories. However, the evolving selling environment today is much more complex, demanding significant changes in performance metrics, goals, control and compensation.

In sales management, Alexander Hamilton Institute reported in Kalu (2005) that motivation and supervision are two of the most important topics. Four success factors for sales success include: Product and Application, Selling Skills, Time and Territory Management, and Motivation. Among these elements, only motivation is important in all kinds of selling. Ubanagu (2006) stated that motivation is the effective managerial application of tangible and intangible incentives to improve the performance of the workforce. The glaring feature of sales force activity is that it gives room for personal contact with the customers and the need to undertake other activities not directly associated with personating. Thus, all classes of sales force or salespeople, namely Route sales people, Sales clerk, Detail sales persons, Account representatives, Sales engineers and Creative sales persons require adequate and proper motivation.

There are three popular methods of compensating sales people identified by Ubanagu (2006:190). One of them is straight salary; is a system that is mostly adopted when the management wants to motivate sales people to achieve objectives other than short run volume. Straight salary method of compensation is usually adopted in the following situations: When the individual sales person’s impact on sales volume is very difficult to measure in a reasonable time. Where the sales people are engaged in missionary selling and when the selling process is complex and involves a team or multi-level selling. Another method is called Straight commission: a commission is payment for achieving a given level of performance and is based on a certain percentage of the sales essence unit volume. Lastly, combination plan; this puts the basic salary with commissions or bonus or both. If salary is combined with commission, the commission is tied to sales volume as in the case of straight commission plan. A bonus is a payment made at the discretion of management for achieving or surpassing some level of performance. The attainment of quota is often the minimum requirement for a sales person to earn a bonus in some organizations in Nigeria.

1.2              Statement of the Problem

The foregoing situations of the sales force in manufacturing and service companies in relation to economic performance raise issues on whether these companies can achieve and sustain high rates of output and growth, able to generate and sustain large numbers of employees, and whether they can compete effectively in the global market. The failure of sales force could have industrial, managerial and marketing implications which this study is set to explore, and which constitutes its research problem. Particularly in the context of how the sales force are motivated towards improving productivity using the incentives of salaries, sales calls allowances, sales bonuses, access to sales vans, product availability and continuous training and updating of the sales force.

Greater percentage of the sales force in manufacturing and service companies have been major culprits in these practices including lateness to work and not keeping appointment at all. Others could be very unfriendly and even become hostile while attending to customers. Some sales forces lose focus and thereby supply wrong brand of products to customers. These result in long waiting time for customers to receive the needed goods and services, and the consequent low performance as some customers lose patience and consequently take their leave and even go the alternatives. The poor attitudes of the sales force such as lateness to work, delayed sales calls, lack of information for customers problems, could contribute to the low growth of sales force performance in manufacturing and service companies. This study therefore investigated the impact of sales motivation on organisational performance.

1.3       Research Questions

The following are some of the questions which this study intends to answer:

i)                   what are the effects of sales motivation on organizational performance in Nigeria?

ii)                 what is the prevalence of sales on organizational performance in Nigeria?

iii)               what are the different motivational tools used on the sales force by some organizations in Nigeria?

1.4       Objectives of the Study

The main objective of this study was to investigate the impact of sales motivation on organisational performance. The specific objectives are:

i)                   to survey the effects of sales motivation on organizational performance in Nigeria

ii)                 to inquire the prevalence of sales on organizational performance in Nigeria

iii)               to establish the different motivational tools used on the sales force by some organizations in Nigeria

1.5       Research Hypothesis

The research hypotheses to be tested include:

i)                   there is a significant correlation between sales motivation and organizational performance

ii)                 there is no significant relationship between motivational tools used on the sales force and organizational performance

1.6       Significance of the Study

This study sought to investigate the impact of sales motivation on organisational performance. It will be beneficial to many organizations in Nigeria. The management of these organisations will be refreshed and educated more on the needed adequate knowledge and application of appropriate motivational strategies that will enhance organisational harmony and growth. This will facilitate peace, commitment and interpersonal relationship. It will as well serve as literature upon which further research can be done and also contribute to the marketing research.

1.7       Scope of the Study

The study will be limited to establishing impact of sales motivation on organizational performance. This study will identify the available sales force motivational tools used by different organizations in Nigeria.

1.8       Limitation of the study

The study was faced with challenge time and financial constraints. The time frame for this study was short and therefore did not allow the use of many analytical techniques and expansion of the scope. While financial constraint occurred as a result of lack of funds by the researcher to adequately finance the project as desired. g this research was therefore a big task. There was nothing like research grant to aid self-sponsored study.

1.9       Definitions of Terms

The following terms were used in the course of this study:

Organizational performance: This comprises the actual output or results of an organization as measured against its intended outputs (or goals and objectives).

Sales force: This is a group within a company that conducts sales. 

Sales motivation: This is the expectations and needs of sales rep

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