Motivation

03/25/2013

03/25/2013

FUNDAMENTALS

OF MANAGEMENT

Course Assignment 2

FUNDAMENTALS

OF MANAGEMENT

Course Assignment 2

Risa Hosein-Mohammed

Risa Hosein-Mohammed

There is a quiet revolution sweeping modern businesses with sales people working on straight commission.  A clerk on a 7 per cent commission on sales could earn $35,000 on $500,000 in sales. This strategy has the potential to attract better salespeople, improve motivation and improve on Customer orientation. But businesses are reporting a problem.

In different departments in the same business, one selling expensive handbags and designer shoes, the employees are motivated by the attraction to make lots of money. In other departments like lingerie with modest price tags employees are demoralized and the staff turnover is high. The staff here feel they are making less money than they made under the straight salary arrangement, in some instances working harder than they did before.

There is a decision for management to make.

Questions:

1. What theories about motivation underlie the switch from salary to commission pay?

2. What needs are met in the commission system? Are they the same like shoes and handbag departments as it is in lingerie department?

3. If you were making the decision would you switch back to the previous compensation system of straight commission or devise some other compensation method?

In choosing this other system, what would it look like?

Motivation is defined as the inner force that drives individuals to accomplish organizational and personal goals. It is the degree to which an individual wants and chooses to engage in certain behaviour. Employees’ behaviour is linked to their attitudes and they need to be motivated in our rapidly changing workplace in order for the organization to survive. Motivated employees are more productive. To be effective, managers need to understand what motivates employees within the context of the roles they perform....