August 1988


Sales Force Motivation Using Travel Incentives: Some Empirical Evidence
by Bill Hastings, Julia Kiely, and Trevor Watkins Motivation has consistently been a confusing area of academic research where theories abound which either do not fit in with each other or research findings. It has been argued that a major reason for these problems is that the various theories involve different levels of analysis and deal with different stages of the motivation process, quite apart from the fact that some of the theories are simply wrong (Locke and Henne 1986). Within the overall field of motivation research, salesforce motivation has attracted a considerable amount of attention. High salesforce motivation is thought to lead ideally to high salesforce performance (Walker, Churchill and Ford 1979). Despite the considerable volume of research in the area of motivation in general and that of salesforce motivation in particular, sales managers have long found the task of motivating their
About the Authors Dr Bill Hastings, currently chief executive and Insurance Supervisor for the Isle of Man Government, previously Principal Lecturer at Dorset Institute and formerly of Glasgow College of Technology. Among his research interests are risk taking behaviour and consumer buying in the field of insurance. He has published a number of texts and journal articles on the subject of insurance. Julio Kiely BSc, PhD, MIPM is a Principal Lecturer in the Department of Business Management, Dorset Institute. She worked in Personnel Management at Delta Metal Company where she completed her PhD on Managerial Job Satisfaction. Julia has published articles and a book on motivation and job satisfaction. Trevor Watkins BA MSc PhD FRSA, is Head of Department of Business Management at Dorset Institute and Associate Member, Nottingham Institute of Financial Studies University of Nottingham, and was formerly Lecturer in Marketing at the University of Nottingham. Dr Watkins has wide experience of both academic research and consultancy in personal financial services and recently has undertaken projects on new product development. marketing strategy, the role of building societies, salesforce motivation and home service. Dr Watkins has published widely on Financial Marketing Services in academic trade journals including, International Journal of Bank Marketing, Service Industries Journal, Insurance Week, The Post Magazine and Insurance Monitor, Bankers World, Accountancy Age, Financial Times, Economist Intelligence Unit, Euromonitor. He has presented papers on Insurance Marketing in the UK, North America and West Africa.

salespersons to be a difficult one with no simple answers readily available (Doyle and Shapiro 1980). In this article, we consider briefly the main motivational concepts and the growing interest in incentive travel as a motivational tool. The motivational theories and concepts upon which incentive travel draws are discussed. We then proceed to examine a specific travel incentive used by a U.K. life insurance company to motivate a commission only salesforce. An investigation of one company in detail will give insights into the whole area of motivation. We address the issue of measuring the motivational impact using a self assessment method completed in confidence by salesforce members. Before beginning our discussion of travel as an incentive, we briefly overview a few key aspects of motivation. Motivational Concepts Major concepts in motivation include: needs, values and goals. A need is a fundamental requirement of an organism's survival and well-being. Human needs are frequently classified into the two broad categories of physical needs and psychological needs although both are interrelated. In order for needs to lead to behaviour, the individual has to identify which needs are being frustrated, know how to satisfy the need and take appropriate action. Need theories are themselves inadequate to explain human action. They do not account for specific actions chosen or individual differences. Two of the most well known need theories of motivation are Maslow's Hierarchy of Needs and Herzberg'S Two Factor Theory. Reviews and discussions of Maslow's theory are well documented (see for instance: Pinder, 1980; Wahba and Bridwell 1973). The general conclusions are that Maslow's theory has received little clear or consistent support from available research findings although it has been very influential in industrial and organisational psychology (Ribeaux and Poppleton 1978). Despite the fact that nearly 30 years have elapsed since the Dual Factor theory of Motivation was first postulated by Herzberg, Mausner and Snyderman (1959) it is still attracting some attention particularly in the literature on salesforce motivation (see for instance: Berl, Powell and Williamson 1984; Winer

The study concluded that the Dual Factor Theory greatly over simplifies the complex issues in salesforce motivation. chances of success are moderate. experienced responsibility and knowledge of results which in turn will produce satisfaction and motivation to do high quality work. Expectancy theory is sometimes known as Valence Instrumentality-Expectancy (VIE) theory and was made popular by Vroom (1964) although there have been many developments and modifications on the basic theme (C. Hackman and Oldham postulate that the effects will be more marked for those with a high growth need strength than those with a low growth need strength. Shaw. Welsh and Moorhead. Within the value theories. thew is concrete immediate feedback regarding performance. Herzberg's et al's well known need theory was exhaustively researched and reviewed in the 1960's and early 1970's and it is now argued that the theory is no longer taken seriously (Locke and Henne 1986.44 Journal of Personal Selling & Sales Management and Schiff 1980). Dubinsky and Ingram (1984) have examined the relationships between industrial salepeople's personal characteristics and their valences for multiple levels of various rewards which has helped to extend research in this area. A major drawback with the performance element of the Hackman and Oldham model is that it does not establish how one gets from the core job characteristics to high performance. All cross-sectional studies conceal much of the complexity in the associations of variables and work motivation (Kiely. Values are what the individual considers good or beneficial. automomy. The theory argues that a person's motivation to perform a given act or task will depend on: the valences or values associated with each of the possible outcomes. the research did not sustain a dichotomy between content and context variables. Miner. Expectancy theory is a further value theory which strives to explain the process by which an individual chooses one alternative for action out of many available. The goal setting literature in motivation argues that this approach is the one most able to account for or predict behavior (Miner. the results of using need achievement measures ill goal setting research have been inconsistent (Locke. The theory does seem to be valid for the job satisfaction criteria (Stone 1986) but evidence regarding the performance dimension is more mixed (Griffin. Overall. They are based on the premise held in VIE theories that people will consciously work towards a valued goal if they see a relationship between effort and performance and believe that the effort is within their capabilities. Most work motivation theories are in essence value theories and focus on the influence of one or several particular values such as achievement or fairness on action or on the effects of values in general. Those high in achievement are regarded as valuing task situations in which: performance outcomes are due to their own efforts. task identity. p.K. in actual fact achievement motivation in- volves a value rather than a need. 1981). Porter and Lawler 1968). 1980) there is a considerable amount of empirical support for the theory. Campbell and Pritchard 1976. While the theory has been extensively criticised (see for instance. the instrumentality of the act or the perceived probability that the act will lead to th« outcome. there is a moderate future orientation: and novel situations are encouraged Of allowed. the Need for . They consider that if these core characteristics are present they will give rise to critical psychological states of experienced meaningfulness. While needs are inborn. Need theories generally fail to address the fact that people have different beliefs about what will satisfy their different needs and values. Use of Travel Incentives to Motivate Travel incentives are a practical way of implementing many of the ideas and concepts contained in value theories and goal setting views of motivation.6). Within the salesforce motivation literature. Hackman and Oldham (1980) have developed a job characteristics model which argues that there are five core work task characteristics-variety. a U. difficult goals--especially if accompanied by feedback--Iead to better performance than easy goals. Overall. Feedback and goals together work substantially better than either one alone and the general findings are that specific. Regarding its applicability to salespersons. In addition. values are acquired by experience and thought and people mayor may not be aware of their values. 1984). 1986). Saari and Latham 1981). the expectancy or belief that a given level of effort will lead to successful performance. vague goals or no goals at all. study which looked at the Dual Factor Theory in this context found in general that findings ran counter to the theory (Shipley and Kiely 1986). expectancy theory does seem to be a useful motivational model. the ideas put forward by McClelland in his Need for Achievement and Power models (1965) have generated many studies. feedback. task significance. While the findings had much in common with those of Winer and Schiff (1980).F. While the title of need for achievement may lead one to suppose the theory falls into the needs theory category.

many use specialist motivation companies to take over the planning (Tisdall 1982) particularly as there is evidence to suggest that incentive trips which go wrong are not only a waste of time but can do incalculable harm (Clayton 1984). ASK Computer Systems. A recent study (Caballero. chances of success are moderate. An in-depth examination of a . particularly in the United States (Ditterline 1985) where incentive travel has grown into a billion dollar industry with its own techniques and specialists (Ambron 1985). use some form of conference or travel as incentives to boost production and motivate their staff (Murray 1987). For sales persons in particular. There are many disadvantages associated with traditional cash bonuses or gifts (Cowell and Collis 1986). after reasonable pay. This is because the perceived value may be higher than the actual cost to the company and what the authors describe as the 'trophy value' which means that the award provides a long lasting positive reinforcement to the recipient. Objectives Our aim was to evaluate travel incentives in motivating a commission only life insurance salesforce. Pierce National Life Insurance is similarly a strong proponent of incentive travel for its salesforce (Sales and Marketing Management 1984). Most companies using travel incentives see them as both providing recognition of last year's achievements and an encouragement to work harder. for instance. Moreover. The trips themselves can initiate peer contact and exchange of ideas which other forms of incentives would not be able to offer. Travel incentives work on the principle that winning is a reward in itself and in a way the prize is secondary.K. Travel incentives can contain all these elements. Travel incentives have proved to be popular and successful motivators (Ambron 1985). There is a lack of research focusing directly on the recipients of existing travel incentives and their perceptions of the motivational properties of such schemes. travel incentives are still comparatively new although about % of the top 1. it is argued that the destination has to be one which will make the winners' friends envious (Clayton 1985). the nature of the sales job makes it comparatively easy to build in feedback on work performance which the research on goal setting has also found to be beneficial in aiding performance. Travel incentives are widely used to motivate salespeople. Tangible rewards such as money or gifts do not have the same glamour or notoriety attached to them (Kelly 1986). are vital to motivation (Locke and Henne. In Britain. difficult goals lead to better performance than goals which are easily achieved. As a result. 1988) argued that while people may say they prefer money to other types of rewards. those companies who have been offering travel incentives for many years argue that employees want destinations offering excitement and glamour. Prize winners are placed in the limelight and become an elite group. there is immediate feedback regarding performance and a moderate future orientation.August 1988 45 Achievement model argues that those high in achievement value task situations in which performance outcomes are due to their own efforts. 1986). The study reports the findings of an investigation into the relative effectiveness of merchandise incentives versus travel/entertainment and cash awards for motivating sales force performance. They offer a maximum of visibility to the prize winners. many companies feel they get more for their money through non-cash awards. They feel it is important to be able to offer a destination which their employees would have been unlikely to have been able to visit themselves due to financial or planning constraints. They contribute to peoples' needs for achievement and recognition of this achievement. money and energy to ensure that their leading sales contributors know that their extra efforts are appreciated (Kelley. both of which. Research on incentive travel has been directed mainly on companies' perceptions of the benefits of incentive travel or views given by specialist travel providers. 1986). Views differ on the advantages of including spouses or guests on such trips (Kelley 1980) although all companies realize the importance of taking the time. Feedback is also one of the core work task characteristics-together with autonomy which is a further common aspect of sales work-identified in the Job Characteristics model as leading to motivation to do high quality work. The top prize offered as an incentive travel is usually difficult to obtain and conforms to the ideas in the goal setting literature that specific. Management in ASK feels that travel incentive plans the salesforce are unlikely to be able to book for themselves are more effective than cash or gifts. have found incentive travel has helped increase sales by 50% (Sales and Marketing Management 1984). However. The sales group offered travel/entertainment incentives performed best followed by the group with cash incentives and lastly those with merchandise incentives.000 companies in the U. Companies new to the incentive travel scene in Britain tend to pick destinations for travel awards either in the United Kingdom or Europe.

The company currently offers an annual convention as an incentive for its top salesforce. The format and location of the convention varies from year to year. Included with the questionnaire was a reply paid envelope addressed to Dorset Institute rather than to their employing organisation. In order to minimise the effect of totally unrealistic estimates and to stop new recruits who had very low sales and consequently expected a large increase. The remaining sections of the questionnaire sought respondents' opinions on: the travel convention offered and what they considered to be its main attributes. asking respondents to indicate the extent by which they would be willing to increase their sales in order to qualify for given awards is likely to lead to unrealistic estimates. resulting in 1083 usable questionnaires-a response rate of 53. Questions relating to travel and other incentives required respondents to indicate whether the respective incentives were for them a major incentive.000 questionnaires were posted. distorting the percentages for sales associates as a whole. Inevitably there are many methodological problems in asking respondents to rate their perceptions of given items. Over 2. In the past.46 Journal of Personal Selling & Sales Management specific travel incentive offered by a company and the way it is perceived by those actually involved will help to rectify this omission. to the commission calculation for the salesforce. . Accompanying the questionnaire was a letter signed by the National Sales Director which introduced the questionnaire and stressed the confidentiality of the survey. This budget is determined by a percentage of sales method similar. For this question. In particular. other awards or conventions which might induce them to increase their sales.95%. questionnaires were sent to all sales associates employed by a major life insurance company. The questionnaire sought background information on respondent's sex. The company was concerned to assess the effectiveness with which the travel incentive budget was allocated. Much of the collected information remains confidential and this paper is based on analysis of aggregated data and of necessity does not contain specific detailed data responses. Questionnaires were distributed through sales associates branch managers. such a methodology does give an insight into the respective priorities and degrees of importance placed on the respective incentives. Respondents were not asked to supply their name or any identifying material. previous selling experience and insurance selling experience. Insights into the ways in which employees view the scheme will help clarify the extent to which travel incentives are seen by job holders to contain the elements which motivational theorists and researchers argue to be important. While we acknowledge that this is a potential problem. The respondents were working for a major U. Information was also obtained on respondents' sales achievements for 1986. sales associates who had been with the company for less than one year were excluded from the calculations. In addition. The distribution of respondents according to sales volume closely matched the total distribution of sales volume leading us to feel confident that nonrespondents did not differ systematically from respondents. They were also asked about the perceived likelihood of increasing either the size and/or number of sales cases in the various business sectors in order to qualify for the convention. length of service with the company. Fifty three additional incentives were received beyond the deadline set for return of the questionnaires and were excluded from analysis. Method In order to see how effective travel incentives were in motivating a specific salesforce. the relative importance of other possible incentives.K. We had no means of checking for differences in subgroups according to region or other criteria as questionnaires contained no identifying material and we considered the importance of assuring respondents of confidentiality overrode the desirability of being able to analyse the data by subgroup populations. The questionnaire was pretested on sales associates attending a training course at company headquarters. we compared answers regarding sales volume of those who replied with the overall company records of sales volumes achieved by salesforce members over the period of study. The current research will both contribute to sales motivational literature and have implications for sales management practice. No follow up or reminder was sent. life insurance company. respondents were asked to tick a box on a five point rating scale which ranged from very likely to very unlikely. Mediterranean cruises have been offered or an attractive destination in Europe. the degree to which identified elements contained in incentive travel are valued by job holders can be explored. In order to ascertain if nomespondents differed systematically from respondents. although much smaller in value. the percentage by which they would be willing to increase their sales levels in order to quality for each of the respective awards. a minor incentive or no incentive.

retail vouchers. When individual incentives were analysed to see if respondents perceived them to be a major incentive. respondents had 6 years previous selling experience with a range of no previous selling experience to 41 years.E1/2m 3 = E 112m . 37% had between £0. perceived as a major incentive (65%) Soles achievement bands m I = Less than E 1/4 2 = EI/. This could be because those with a high sales volume performance were working at or near their maximum output capacity in terms of effort.E2m 7 = Mare thon E2m Figure 2 Relative importance of incentives . minor incentive or no incentive an interesting picture emerges.K.5 million or less. The range for length of service span from less than a month to 21 years..Elm 5 = Elm . business goods.. £%m-£lm.. £1f2m-£%m.. Unit sales were then classified into levels of sales volume refered to as sales bands. £%m-£1f2m. Neither important nor unimportant Quite Totally unimportant unimpar though it is marginally exceeded by individual overseas travel (67%). responses ranged from no previous experience to 25 years with an average of 17 months insurance selling experience. be it overseas or to the U. When the extent to which respondents indicated they would be willing to increase their 1986 sales achievements in order to quality for each of the given awards was considered. Hence the majority of the sample were comparatively new to insurance sales when they joined their present company. With regard to insurance selling experience. The U. recognition certificates-were more likely to be classed as minor incentives. The results are displayed in Figure 2 which shows that the majority of sales associates consider the various awards and conventions to be important. Seven possible sales volume bands were identified: less than £%m. "Mosl ~mpor ant Important . convention was also indicated to be a major incentive (42%). is the most important incentive. more than £2m. Respondents Sales Achievements Intentions and Sales • In-:"'~Qi-e tntention coer1986 Figure 1 Sales achievements and sales intentions solu 150 100 92 20 -' 1986 Sales achievement bands 6 7 The performance of the sample was measured in unit sales. on balance.5 to Et rn with 20% in excess of £lm (see Figure 1). Other incentives listed-household goods. On average.August 1988 47 Results Background Information on Respondents Analysis showed that 92% of our sample was male with an average of 54 months of service with their present insurance company. The finding that travel. Thus those who were currently achieving high sales performance in terms of their sales volume band tended to feel that their sales would increase in future by a smaller amount than did those with lower sales output performance. the rank order of the intended sales percentage increases for the incen- . The overseas convention is. When sales intentions were examined according to current performance band levels. Approximately 43% of respondents achieved £0. there was clear evidence of increased stability of sales performance intention as the sales band became higher.Ell/2m 6 = Ell/2m .. corroborates others' findings regarding the value incentive travel. Importance of Incentives Respondents were asked to indicate on a 5 point scale how important it was to qualify for the conventions and other incentives currently being offered by the company.K.E3/4m 4 = £3/4m .. .. convention. Etrn-Et vsm: £11hm-£2m.

e II Type of incentive Sales achievement bonds. 7 21 14 92 B~. 20 9 20 I::' 12 Type Cd) ~18 59 of tncent tve (eo) (f) (9) 50 .0 3/4rn 4 : [3/ 4m t (I l.. Other Relevant Incentives Respondents were asked to name incentives other than those offered currently.6 2~ 27 ~. on the other hand. For example. compared to travel incentives. to increase their sales achievements in order to achieve.. Attributes of the travel incentive convention which have a more transient nature as . there was a consistent pattern of a smaller sales performance increase intention as sales achievement bands increased. the travel incentive convention satisfies the need for recognition and provides a sense of achievement-both of which are characteristics which are well documented in motivation literature as being important. Generally. 1 : Less thonl/4m . The attributes and their percentage ratings are shown in Table 2. These results are summarized in Figure 3. recognition certificates and household goods.~ 33 20 If. sales achievement increase intentions for the incentives mentioned varied from 79% to 51 %. Hence overseas travel and individual travel were the incentives for which respondents expressed the most willingness to increase their sales achievements. : LIm to ( II/2m Ret611 vouchers F:HClgnitl(ln Cl'rtHi(lltes 6 : fllnmt(l 7 • More thon E2m r 2m product which the sales associates intended to try to sell..48 Journal of Personal Selling & Sales Management tives was practically identical to the rank order given for the extent to which each of the incentives was considered to be a major incentive.. 55 ~. 1/4m to 1/2m (el OVE'r~. This finding.(oMs (0 (9) ?. They were also incentives for which respondents expressed less willingness._I . They were then requested to identify whether or not they were considered to be major incentives and the percentage by which they would increase their production output to obtain them. Attributes of the Company Incentive Scheme Respondents were asked to assume they had reached the goal of the travel incentive convention and given a list of 14 possible attributes of the convention.. . the most frequently mentioned category of incentive related to financial incentives. These results indicate that financial incentives are valued by our sample although the comparatively low ranking of holidays and travel could be due to respondents omiting to mention them as they are currently offered by the company. (. Q'''' 76 55 71 ~. On average. This was followed by consumer goods such as a car or car allowance. Interestingly. were lowly ranked in comparison to travel incentives and conventions as major motivators. variation between the types of business in relation to future prospects. ~ 27 . coupled with the high rankings of 'sense of pride' and 'reward for efforts' corroborates research findings that travel incentives motivate because of 'trophy value'. : r.' Indlviduol oversees (d) HousH.Convention (to) UK (on venuon Trevel (e.old scocs (e) 6u~·ine~. Holidays were ranked joint third as performance motivators. There was. I rn ~. : [ 1/2'-1'11. Regardless of sales achievement band. attitudes to sales incentives were found likely to be different according to the type of Figure 3 Percentage sales increase intentions by sales bands leyel of 1986 Sales 2 (e) (t.) (c) 3 53 35 24 5 32 20 30 13 14 12 15 6 19 I~. Overseas travel and individual travel incentives were the prime motivators. In addition.~ e 7 6 20 I':. This finding that salespeople who are already selling more express intentions to increase sales by smaller percentages than those who are generating smaller sales volumes coincided with our earlier findings. The attribute of 'sense of achievement' was rated very important or quite important by 92% of respondents. Retail vouchers. The same pattern emerged when the average percentage increase within each sales achievement level was measured. however.(J 37 49 29 .~. Most of the sample identified up to three major incentives. The incentives mentioned fell into six groups as shown in Table 1.~. incentives in general were considered by the majority of sales associates to be an important feature in their production planning. They were then asked to rate the importance of the given attributes on a 5 point scale ranging from very important to totally unimportant. respondents intended to try to sell more of particular types of policies in preference to different types of policies in order to qualify for the major travel incentive. In addition.

they relate to the convention while it is taking place.August 1988 49 Table 1 Incentives identified by sample Type of incentive Financial Consumer goods Holidays Job related Product/sales Other Note: Respondents sales production.5 13 14 Attribute Sense of achievement Sense of pride Reward for efforts Recognition among colleagues New and unfamiliar things Enhance self-image Experience for rest of years Fulfill responsibility to others Need of company's help Sense of adventure Feel like a VIP Means of relaxation Release from daily routines Slow the pace of life Note: Table 2 shows the rank ordering respondents placed on the importance of 14 aspects of the current travel incentives scheme. in comparison to characteristics of recognition and sense of achievement. Respondents valued the incentive travel currently being offered more highly than other possible extrinsic motivators such as consumer goods.5 8 9 10 11. The prize of incentive travel may be . Hence increased visibility in the company and the likelihood of the award increasing their loyalty to the company were considered more probable outcomes than the impression that qualifying would make on others. Cash Car. Frequency 173 112 70 66 36 66 (33%) (21%) (13%) (13%) (07%) (13%) Example Mortgage.' 'means of relaxation' and 'slow the pace of life' have. incentive travel is a way of encapsulating motivational theory and translating theory into a practical and successful motivational mechanism. car allowance Family holiday Secretarial. Findings showed that the salesforce considered it very likely that qualifying for the sales convention would make them more noticed by their managers (42%) and increase loyalty to the company (41 %). The proportion of the sample considering it very likely that it would enhance friends and family's image of them was 32% while 30% felt it very likely that it would impress people who are important.5 4 5 6. word processing Look after clients better. as far as our respondents are concerned. training seminars Charities etc. a much lower value ranking. such as 'feel like a VIP. for which they would be willing to increase their were asked to identify up to 5 incentives Attributes Table 2 of the Travel Incentive Scheme Proportion considering it very or quite important 92% 83% 83% 72% 71% 66% 66% 65% 64% 58% 55% 55% 48% 38% Ranking 1 2. Expectations of the Convention Respondents were given 4 possible spin-off effects resulting from qualifying for the convention and were asked to rate each of the potential outcomes on a 5 point scale ranging from very likely to very unlikely. Conclusions This research has demonstrated that. The degree of importance respondents placed on each aspect was rated on a 5 point scale of importance.

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