Organizational Behaviour

Reflect back on the module, the most interesting and valuable things that I have learned

is Motivation. I found the topic fascinating to the instance that I can look into my own

experience and have a better understanding of motivation at work.

Few years ago, I was working in a bank in Singapore, as a team leader in a sales team

which has nine sales staff. We sale loan products in retail banking market, mainly mortgage.

Internally, we work closely with product managers and risk management team. Externally,

we work with various mortgage brokers, property agents, surveyors and lawyers. The retail

banking market in Singapore is highly developed, and rival competition between banks are

fierce. In a market that mortgage product from different banks has low differentiation, we

need highly motivated sales staff who are able to provide professional banking services to

retail client. Individual sales staff need to leverage the banks limited resource and bring in

more mortgage sales. As a team leader, I need to ensure the individual sales staff is motivated

by designing the KPI and incentive framework for the team. It often puzzles me that what

kind of the framework would effectively motivate the sales staffs. Reviewing back to the

experience, led me to reflect what I learned at the session of motivation.

I started my research from the basic of motivation. Motivation is defined as the reason

for peoples actions, desires, and needs. Motivation is also ones direction to behaviour, or

what causes a person to want to repeat a behaviour (Elliot and Covington, 2001). Work

motivation is described as the psychological processes that direct, energise and maintain

action toward a job, task, role, or project (Grant and Shin, 2012)

Understood the meaning of motivation, should I act on the belief that members of the

sales team are internally motivated and enjoy working in the team?

In 1960 Douglas McGregor defined the assumption about the human nature in the

workplace, namely the X-Y theory (Douglas, 1960). Theory X suggest that employees are

generally lazy and shall try to avoid work whenever they could, and theory Y suggest that

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employees are generally positive towards work and will try to pursuit the organisational

objectives without external control or threat of punishment. If theory X was to be

implemented to manage the sales team, manager could exercise either hard or soft approach

(MacGregor, 1960). The hard approach depends on close supervision (micro managing),

intimidation (strict policy), and imminent punishment (hire and fire). The soft approach is

opposite of hard approach, characterized by leniency and less strictly regulated rules in hopes

for high workplace morale and therefore cooperative employees. McGregor also states that a

command and control working environment would not be effective because it relies on lower

needs as levers of motivation, but modern society those needs already are satisfied and thus

no longer are motivators. The sales staff might end up grow negative attitude towards work,

avoid responsibility, loss interest in organizational goals, resist change, etc.

If theory Y was to be implemented to manage the sales team. Sales staff are able to

seek for responsibility to reach the sales target. Sales staff would also have flexible working

hours, but they tend to work overtime voluntarily when they cant finish their work during

working hours. Based on the Y theory assumption, McGregor suggest that there is an

opportunity to align personal goals with organization goals by using the employees own

quest for fulfilment as motivator. In this case, sales staffs personal goal is in line with banks

goal, which is to achieve sales target. However, the bank also wants to achieve service

excellence and policy compliance. Sometimes when sales volume reaches a certain level and

exceeds banks normal processing capability, sales staff are too busy to close deals than to

take care of their customers, this will jeopardize service standard and we would receive

complains from angry customers. It is also possible that the sales staff is too focused on

achieving sales target and have to forgo the rules in compliance. Under Theory Y, managers

need to be facilitative in order to maintain the balance of individual sales staffs own ability,

motivation and efficient working environment.

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Is commission an effective motivator for the sales team? McGregor X-Y theory is

closely related to Maslows hierarchy of needs, which is a model illustrated that people are

motivated to achieve higher level of needs (social, esteem, and self-actualization) after basic

physiological and safety needs are met (Maslow, 1943). In this model, it is believed that

higher level of needs can be achieved through sense of achievement, having autonomy,

having feelings of self-worth, and realizing ones potential. According to Maslow, people are

motivated by unsatisfied needs. With adoption of theory X, workers are not encouraged to

achieve higher level of needs and firm relies on money and benefits to satisfy the workers

lower needs, and once these needs are satisfied the source of motivation is lost. Money might

be the only way to self-fulfilment in a theory X environment, the only way that sales staff can

attempt to satisfy their higher-level needs in their work is by seeking more money. With

adoption of theory Y, workers are encouraged to achieve their highest needs of esteem and

self-actualization. The higher-level needs of esteem and self-actualization are continuing

needs, and would not be completely satisfied. In this case, sales staffs can best be motivated

by the higher-level needs and commission along would not be the best motivator.

Motivation and job satisfaction. Motivation can be divided into two different theories

known as intrinsic motivation and extrinsic motivation. Extrinsic motivation refers to the

performance of and activity in order to attain a desired outcome while Intrinsic motivation is

the self-desire to seek out new things and new challenges, to analyse ones capacity, to

observe and to gain knowledge (Ryan and Deci, 2000). The two-factor theory (Herzberg and

Snyderman, 2011) states that there are intrinsic factors in the workplace that provide positive

motivation, while extrinsic factors cause dissatisfaction. Intrinsic factors (motivators)

includes challenging work, recognition of ones achievement, responsibility, opportunity to

do something meaningful, involvement in decision making, sense of importance to an

organization, while extrinsic factors (hygiene factors) including status, job security, salary,

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fringe benefits, work conditions, good pay, paid insurance, vacations (Hackman and Oldham,

1976). The ideal situation where employees are highly motivated and have few complaints

would be the combination of high hygiene and high motivation.

In additional, employees would seek for fairness in their contributions and benefits

from hygiene factors. Equity theories (Denhardt and Aristigueta, 2012) suggest that people

make choices based on their subjective assessments of particular situations before exerting

effort to achieve organizational goal. This is again explained that commission would not

effectively motivate that sales staff, but would cause dissatisfaction to staff if they are not

being paid fairly.

Goal setting theory applies when setting up KPI and sales target. Goal setting is the

development of an action plan designed to motivate and guide a person or group toward a

goal. Goal theory (Locke, E.A., 1968) describes setting more specific goals to elicit higher

performance and setting more difficult goals to increase effort. One common goal setting

methodology incorporates the SMART criteria (Doran,1981), in which goals are: specific,

measurable, attainable/achievable, relevant, and time-bound. According to this theory, sales

staff should participate in setting up KPI and sales target and they would be more likely to

accept the goals and have a greater job satisfaction. When setting up a sales target, sales team

should adopt a multi-tier targets system (Steenburgh and Ahearne, 2012) in order to fulfil the

SMART criteria.

Reinforcement is another method of motivation. According to Huitt & Hummel (1997),

four methods are employed in operant conditioning: positive reinforcement, negative

reinforcement, positive punishment, and negative punishment. Positive reinforcement is "Any

pleasant or desirable consequences that follows a response and increases the possibility that

the response will be repeated" (Wood, Wood, & Boyd, 2005). Some examples of rewards in

the workplace are monetary bonuses, promotions, praise, paid holiday leave, and attention.

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Rewards setting should also meet the expectation of goal achieving. The expectancy

theory (Vroom,1964) of motivation explains that individuals can be motivated towards goals

if they believe that; there is a positive correlation between efforts and performance, the

outcome of a favourable performance will result in a desirable reward, a reward from a

performance will satisfy an important need, and/or the outcome satisfies their need enough to

make the effort worthwhile. According to this theory, the rewarding system including

commission scheme, salary incremental, award and promotion should meet the criteria of

valence, expectancy and instrumentality.

In conclusion, there are various ways in motivating staffs in a sales team. The sales

staff should be encouraged to achieve their own goals and seek for higher-level needs. Sales

staff would be motivated with challenging sales target, achievement awards, more

involvement in team management and product development process and recognition of their

effort from senior management. Team leader should facilitate the team management rather

than micro manage sales staffs daily activities.

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