Determinants of Pay Levels and Structures in Sales Organizations

Dominique Rouzies, Anne T. Coughlan, Erin Anderson and Dawn Iacobucci
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Dominique Rouzies: GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique
Anne T. Coughlan: Kellogg [Northwestern] - Kellogg School of Management [Northwestern University, Evanston] - Northwestern University [Evanston]
Erin Anderson: INSEAD - Institut Européen d'administration des Affaires
Dawn Iacobucci: Owen Graduate School of Management - Vanderbilt University [Nashville]

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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.

Keywords: compensation; motivation; agency theory; pay disparity; sales management (search for similar items in EconPapers)
Date: 2009-11
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Citations: View citations in EconPapers (10)

Published in Journal of Marketing, 2009, Vol.73,nº6, pp.92-104. ⟨10.1509/jmkg.73.6.92⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00491677

DOI: 10.1509/jmkg.73.6.92

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