Determinants of pay levels and structures in sales organizations

Dominique Rouziès*, Anne T. Coughlan, Erin Anderson, Dawn Lacobucci

*Corresponding author for this work

Research output: Contribution to journalArticle

23 Scopus citations

Abstract

Two key issues in business-to-business (B2B) sales force management are (1) how much a given sales job should be compensated (pay level) and (2) how much of the compensation should be fixed versus variable (pay structure). The authors examine the paychecks drawn by people in more than 14,000 selling jobs and more than 4000 sales management jobs in five B2B industry sectors in five European countries. They show that pay levels and structures reflect an apparent balancing of two conflicting pressures: the economic imperative (to reward better performers by heightening pay dispersion) and the compensation differential compression resulting from high tax regimes. In particular, B2B firms appear to use variable pay as a way to lessen the salary differential compression impact of high tax regimes on salesperson motivation. Furthermore, similar to chief executive officers, sales managers can have an important multiplier effect that justifies paying them at increasing rates as job challenge rises.

Original languageEnglish (US)
Pages (from-to)92-104
Number of pages13
JournalJournal of marketing
Volume73
Issue number6
DOIs
StatePublished - Nov 2009

Keywords

  • Agency theory
  • Compensation
  • Motivation
  • Pay disparity
  • Sales management

ASJC Scopus subject areas

  • Business and International Management
  • Marketing

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