MGT/312 Week 2: Motivation and Individual Differences, sample paper

Same Commission Plan, Opposite Results: Using Expectancy, Goal-Setting and Self-Determination Theory to Explain Why Two Residential Solar Sales Reps Responded So Differently

[Student Name]

University of Phoenix

MGT/312: Organizational Behavior for Managers

Week 2 Assignment

[Instructor Name]

[Date]

The company, employees and figures are a composite written for a model paper.

A composite residential solar company with 30 sales representatives in two states changed its commission plan at the start of the year. Under the old plan, reps earned a flat 4% commission on every signed contract. Under the new plan, they earn 3% on sales up to a quarterly goal and 7% on sales above it, and the company added a monthly leaderboard. The sales director expected the plan to lift the whole team. Six months later, total sales were up 9%, but results varied widely. Two reps with similar experience illustrate the range. Marcus, with six years at the company, had his best two quarters ever. Elena, with seven years and consistently strong results under the old plan, saw her sales fall by 12% and told her manager she was interviewing with a competitor. The plan was identical for both of them; what differed was how each of them experienced it. This paper uses three motivation theories to explain why.

Expectancy Theory

Expectancy theory holds that motivation depends on three beliefs: that effort will lead to performance, called expectancy; that performance will lead to rewards, called instrumentality; and that those rewards are valued, called valence (Robbins & Judge, 2022).

For Marcus, all three links were strong. He works a territory of new subdivisions where many homeowners are interested in solar, so he believed extra effort would produce more sales. The 7% rate above goal made the reward for extra sales clear, and he valued the money, since he was saving for a house.

For Elena, the first link had weakened. Her territory, an older urban area with more shaded roofs and more rented homes, produces fewer qualified leads. Her quarterly goal was set at the same level as Marcus's. She calculated that even with maximum effort she would barely reach the goal, so the 7% rate felt unreachable. Under the new plan, her base rate had fallen from 4% to 3%, so the same sales earned her less. Her expectancy was low, and the plan had effectively cut her pay.

Goal-Setting Theory

Locke and Latham (2002), summarizing decades of research, found that specific, difficult goals lead to higher performance than vague goals, provided that people are committed to the goals, receive feedback and have the ability and resources to reach them. Goals that people see as impossible reduce commitment.

Marcus's goal was specific and difficult but attainable in his territory, the conditions under which goals raise performance. Elena's goal was specific but, given her territory, felt close to impossible, which reduced her commitment. The same goal level had opposite effects because the conditions differed. The leaderboard added feedback, which helped Marcus, but for Elena it displayed her weaker results publicly every month.

Self-Determination Theory

Ryan and Deci (2000) propose that people have three basic psychological needs, autonomy, competence and relatedness, and that intrinsic motivation flourishes when these needs are met. Rewards can support intrinsic motivation when people experience them as information about their competence, but they can undermine it when people experience them as controlling.

Elena had long taken pride in her work beyond the commission. She was known for designing systems carefully, sometimes recommending a smaller system that fit a customer's roof and budget better, and she mentored newer reps. Under the new plan and leaderboard, she felt that only volume counted, and she experienced the change as controlling. Her sense of competence suffered as her ranking fell, and her time spent mentoring was invisible in the new system, weakening her sense of relatedness to the team. Marcus, who had always been motivated mainly by pay and competition, experienced the leaderboard as information about his competence and enjoyed it.

Individual Differences

The two reps' reactions also reflect individual differences. Marcus scores high on competitiveness and is motivated strongly by extrinsic rewards. Elena values craftsmanship, relationships with customers and helping colleagues. People differ in what they value, so a single reward structure will motivate some employees more than others. Personality traits, career stage and personal circumstances all shape how a given reward is received (Robbins & Judge, 2022).

Consequences for the Company

The plan raised total sales but created two problems. First, it risked losing strong performers in difficult territories. Second, it may have encouraged overselling: complaints about oversized systems rose slightly, and a company that sells long-term financing and warranties cannot afford a reputation for pushing customers into systems they do not need.

Recommendations

The sales director should make four changes.

First, set goals by territory, using lead volume and historical close rates, so that each rep's goal is difficult but attainable. This restores expectancy and goal commitment for reps in harder territories.

Second, restore the base rate to 4% below goal, keeping a higher rate above goal. Reps would still have a strong incentive to exceed their goals, but no rep would earn less for the same sales than under the old plan.

Third, broaden the leaderboard to include customer satisfaction scores and system-fit ratings, and recognize mentoring. This supports the competence and relatedness of reps like Elena and reduces the incentive to oversell.

Fourth, meet with each rep to ask what they value in the work, then use that knowledge in coaching and recognition.

Finally, the director should review the revised plan after two quarters, comparing sales, customer complaints and voluntary turnover by territory, so that the company learns whether the changes motivated the whole team and not only its most competitive members.

Conclusion

A commission plan that motivated one experienced rep to his best results pushed another toward leaving. Expectancy theory shows that Elena's belief that effort would lead to reward had broken down; goal-setting theory shows that her goal was not attainable in her territory; and self-determination theory shows that the plan felt controlling and ignored the parts of her work she valued. Individual differences explain why the same plan worked for Marcus. Adjusting goals by territory, protecting base pay and broadening recognition would motivate a wider range of employees.

References

Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation: A 35-year odyssey. American Psychologist, 57(9), 705-717. https://doi.org/10.1037/0003-066X.57.9.705

Robbins, S. P., & Judge, T. A. (2022). Organizational behavior (19th ed.). Pearson.

Ryan, R. M., & Deci, E. L. (2000). Self-determination theory and the facilitation of intrinsic motivation, social development, and well-being. American Psychologist, 55(1), 68-78. https://doi.org/10.1037/0003-066X.55.1.68