Salesforce Control System, Performance Measures and the Business Cycle

• Published in: Compensation and Benefits Review Vol. 47; no. 2; pp. 91 - 100
• Main Author: Madhani, Pankaj M.
• Format: Journal Article Trade Publication Article
• Language: English
• Published: Los Angeles, CA SAGE Publications 01-03-2015; SAGE PUBLICATIONS, INC
• Subjects: Business cycles; Compensation; Compensation costs; Organizational behavior; Salespeople; Studies; Work environment; fixed pay; business cycle; variable pay; salesforce control; performance measures
• ISSN: 0886-3687; 1552-3837
• DOI: 10.1177/0886368715589020

Salesforce compensation cost is the major cost of sales organizations and is influenced by sales organizations’ internal as well as external environments. Salesforce control system as an antecedent of compensation can significantly influence salesforce behavior and has significant effects on salesperson performance, sales organization effectiveness and compensation system used by the sales organizations. The “business cycle” is a key variable of external environment influencing performance of sales organizations. Salesforce control systems are different in an environment of strong turbulence from those in an environment of little turbulence. Failure to match the right control system with the sales organization’s internal as well as external environment’s unique context may lead to organizational decline in the long run. This research focuses in this direction and identifies optimal salesforce control system according to different phases of the business cycle.