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Sales Force Compensation: Research Insights and Research Potential - Abstract


Anne T. Coughlan (A-COUGHLAN@KELLOGG.NORTHWESTERN.EDU), Northwestern University
Kissan Joseph (, University of Kansas


This chapter (a) summarizes the current state of research knowledge and normative insights about sales force compensation practices; (b) reports on current practices in sales force compensation; and (c) gives recommendations for future activity in both domains.

On the research front, we now have several decades’ worth of work on sales force compensation, covering both analytic/theoretical and empirical investigations. Underlying research paradigms shaping this research include agency theory, transaction cost analysis, operations research techniques, and organizational theory. Much of the empirical work has used aggregate data, although insights have also been drawn from company-specific data sources and job-specific data sources. The empirical research generally sets out to test prior theory, expressed by a set of predictive hypotheses. Overall, the empirical findings have failed to reject the theories tested, suggesting value in the analytical and theoretical underpinnings for the work.

On the practice front, managers are faced with the ongoing challenge of keeping their sales forces motivated through the compensation plans and components they offer. This chapter summarizes the tools used both for long-term ongoing motivation and short-term “burst” motivation to achieve specific goals.

Finally, the chapter offers guidelines for researchers interested in future work in the area, and for managers seeking better and more creative solutions to the sales compensation management problem.

    The Handbook of Business-to-Business Marketing

    This chapter is part of the ISBM Handbook of Business-to-Business Marketing, edited by Professors Gary Lilien and Raj Grewal. The Handbook of Business-to-Business Marketing is available from Edward Elgar Publishing and other online book retailers.

    As the authors retain the copyright to their chapters, only they have the right to use or distribute their chapter. If you would like a copy of this chapter, please contact the author or authors directly through their emails included above.

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