Salesforce Compensation: A Review of MS/OR Advances

Anne T. Coughlan*

*Corresponding author for this work

Research output: Contribution to journalReview article

56 Scopus citations

Abstract

The extensive MS/OR literature on sales force compensation in marketing has attacked a great variety of problems facing sales managers, including how to set commission rates, whether to delegate pricing authority to a sales force, what mix of salary and incentive compensation to provide to the sales force, whether or not to offer a menu of compensation plans, and how to elicit valuable information from salespeople about their utility functions and sales response functions. In the case of theoretical models, some predictions have been tested statistically, but these tests have been incomplete and, in some cases, inconclusive. Based on available empirical results, one cannot reject agency theory as a useful paradigm for compensation-setting, but further research is necessary to increase the level of confidence in the theory and its predictions. On the decision support system (DSS) front, few diagnostics have been presented for the models described in the literature, although those presented suggest the usefulness of the approach as well.

Original languageEnglish (US)
Pages (from-to)611-651
Number of pages41
JournalHandbooks in Operations Research and Management Science
Volume5
Issue numberC
DOIs
StatePublished - Jan 1 1993

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Computer Science Applications
  • Management Science and Operations Research

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