Mba_518_Motivation_Paper

SUNY November 18 , 2010 MBA 518 Motivation Paper Class discussion defined motivation as the process that causes the initiation, direction, intensity and persistence of work related behavior to achieve goals and objectives. Some businesses focus on compensation and non compensation to motivate sales people. Compensation, usually financial, includes salary, bonus, commission and benefits. Non compensation, or non financial, include work environment, job security, sense of accomplishment. Daniel Pink’s recent book, Drive, suggests that many companies rely only on Carrot and Stick Daniel Pink references an organization whereby the sales commission structure is straightforward. However the sales people, like we discussed in class, figured out how to manipulate the incentive compensation system by altering sales cycles into a time period most advantageous for them . For example, under selling in one month to show a bigger gain the following month, and so on. Daniel Pink describes how management reacts to this sales group behavior by making the incentive compensation system more complex. The sales people respond by increasing the complexity of their own behavior. In the story, this back and forth between the sales force and management continued until it seemed they were more focused on the compensation system than on making great products and selling it to customers. Sales management decided to abandon the traditional commission pay structure for a flat pay. Initial feedback was more positive than expected despite some employees leaving due to the described motivation for money. Referenced in Drive are organizations whose pay structure conflicts with the standard sell more, get paid more or sell less, get punished compensation systems. These companies are generating improved sales performance as well as realizing other benefits such as management spending less time policing the compensation system and arbitrating disputes over sales revenue credit. Once sales credit arrangements became simpler, leaders could focus their efforts on more useful activities. They found that collaboration and commitment increased once the commission structure was removed due to increased incentive to generate teamwork versus internal competition for customer credit. Also, customers were approached differently in that sales people approached them with the intention to partner and solve problems not just make highest sale possible. Daniel Pink’s Drive provides details, similar to class discussion, that just offering money to people may not result in what’s best for an organization. Reward and punishment incentive compensation structure may not motivate sales people in the most effective way. Having some form of income scale related to sales performance may be appropriate for many companies but having other types of non financial recognition could tap into the diversity of motivation within a sales group.