Determinants of Sales force Effectiveness: Financially Based Rewards versus Nonfinancial Rewards

Abstract

The current economic environment in Nigeria has prompted significant cost savings, especially in manufacturing firms and has led to demands for more accountability.  In turn, there have been calls for evaluating the contribution of the marketing functions to the firm.  Within the marketing department, sales managers are becoming increasingly concerned about justifying their investment in competition for scarce resource, such as additional sales people.  This study examined the importance of selected rewards in improving the overall effectiveness of the sales organisation in order to provide sales managers with insights and contribute towards filling an important gap in the literature.  Principal component (PC) extraction model was employed in the multiple-factor analysis to predict inter-dependency and interaction outcome among variables.  Out of the twenty-nine (29) components analysed, only six principal components extracted accounted for 85.75% of the variation.  This suggests that salary compensation, commission incentive, bonus payment, fringe benefits, recognition opportunity for promotion and advancement were the major factors that account for sales persons motivation and effectiveness.

Keywords

Salary, Commission, Bonus Payment, Fringe Benefits, Sales Contests, Recognition Award Opportunity for Promotion,  Job Enrichment, Encouragement from Management.