Kinks as Goals: Accelerating Commissions and the Performance of Sales Teams

Peter Kuhn and Lizi Yu

No 28487, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the performance of small retail sales teams facing an incentive scheme that includes both a lump sum bonus and multiple accelerators (kinks where the commission rate jumps upward). Consistent with standard labor supply models, we find that the presence of an attainable bonus or kink on a work-day raises mean sales, and that sales are highly bunched at the bonus; inconsistent with those models we find that teams bunch at the kinks instead of avoiding them. Combining simple theoretical models, institutional evidence, and heterogeneity analyses, we argue that that this unexpected bunching results from a previously unrecognized motivational benefit of piecewise linear reward schemes in team environments: Teams use the convenient, salient, kink-points as shared goals, which yield symbolic utility to their members when the points are attained.

JEL-codes: J33 M52 (search for similar items in EconPapers)
Date: 2021-02
New Economics Papers: this item is included in nep-exp, nep-hrm and nep-lma
Note: LS
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.nber.org/papers/w28487.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:28487

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w28487

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().