MONETARY INCENTIVES FOR MOTIVATION OF SALES FORCE

Monetary Incentives for Motivation of Sales Force

Abstract

Motivated employees are the cornerstone of any successful organization. The objectives of this research are to explore the motivational factors and the effectiveness of these incentive programs pertaining to work motivation.

The thesis consists of two main components: theoretical and research. The first part is the theoretical framework, which examines the various motivation theories and the different categories of incentives. Information for the theoretical background was collected from publications, books and internet sources. For the empirical study, a mixed-method research approach was chosen to gather the data. The study was carried out using a questionnaire administered online and the research population consisted of 378 white-collar workers in Singapore.

The results from the study showed that incentives do have a very strong motivational potential to influence the employees' willingness to work harder. The three most motivating factors valued by employees are interpersonal relationship, workplace environment and interesting work, all of which have the potential to motivate employees at higher levels. For long-term motivation, job related factors such as meaningful work, flexible working hours and friendly social gestures were found to be effective motivators while, on the other hand, it was discovered that monetary, social gatherings, tangible items such as award, certificates and gifts are the most effective motivators for the short-term.

Table of Contents

Introduction5

Research Questions7

Literature Review8

Theories of Motivation8

Content Theories8

ERG Theory9

Two Factor Approach10

Process Theories12

Expectancy Theory12

Equity Theory13

Behavior Modification14

Theoretical Framework15

Motivation and Job Performance15

Intrinsic and Extrinsic Motivation17

Incentives as a Motivational Tool21

Monetary Incentives24

Tangible Non-Monetary Incentives29

Intangible Non-Monetary Incentives32

Findings and Discussion39

Surveys42

Monetary Reward System Evidence43

Monetary Reward System as a Motivator44

Success of Monetary Reward System45

Conclusion53

References60

Monetary Incentives for Motivation of Sales Force

Introduction

The majority of the organizational theorists unanimously agree that in today's highly competitive and dynamic environment, employees are an integral part of any organization because a large part of the daily operations are tended by them. To state it simply, the overall success of an organization in achieving its strategic objectives relies heavily on the performance level of employees. Therefore it is crucial to first identify the factors influencing performance.

Employee performance is a function of ability and motivation, where ability is comprised of the skills, training and resources required for performing a task and motivation is described as an inner force that drives individuals to act towards something. There is an old aphorism, "you can lead a horse to water but it won't drink unless it is thirsty." In other words, motivation cannot be forced upon anyone, yet in order to unleash the employee's maximum potential, organizations can create a workplace environment that promotes motivation. While improving one's ability takes longer time and patience, motivation can be improved through some means in a shorter time span.

All organizations, regardless of sector, size or industry require motivated employees to function effectively. Human resources are an indispensable asset that ensures the productivity, performance and prosperity of the organization. Motivated employees are contented, dedicated and work enthusiastically. The outcome of a motivated workforce includes employee retention, loyalty and harmony; these are the factors that contribute significantly ...