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