Abstract

Altogether, when designing sales force compensation, decision makers are faced with a complex issue involving many variables, some of which are unobservable, interdependent, or uncertain. Moreover, compensation is often viewed as salespeople's primary motivator and in many corporations, it is the dominant sales expense. The objective of this monograph is to review the many insights provided by empirical research to date, some of which are just emerging in the marketing literature. We first discuss how plans should be designed according to the dominant research stream and contrast research findings with actual sales force compensation policies. Then, we highlight topics related to sales force compensation that are notably under-researched and show how taking them into account will enrich knowledge on compensation. Finally, we conclude with future trends in sales force compensation.

Sales Force Compensation

Few professions have their compensation as scrutinized as business-to-business (B2B) salespeople. Salespeople’s compensation, like that for CEOs, has triggered many debates. Experts have examined issues ranging from compensation levels, structures, caps, complexity, fairness, gaps with other members of the organization, to menus of compensation. But unlike CEOs who are usually recognized as crucial members of organizations, salespeople’s critical role is rarely acknowledged and despite its economic and corporate importance though sales has traditionally carried a stigma on both academic and industry fronts. Simultaneously, no other employee is in direct contact and in charge of a firm’s most precious asset: its customers’ relationships. For this reason, salespeople’s success is critical to their organizations’ performance.

Sales Force Compensation: Trends and Research Opportunities reviews the many insights provided by empirical research to date, some of which are just emerging in the marketing literature. First, it reviews how plans should be designed according to the dominant research stream and contrast research findings with actual sales force compensation policies. Then, it highlights topics related to sales force compensation that are notably under-researched and show how taking them into account will enrich knowledge on compensation. Finally, the authors conclude with future trends in sales force compensation.