He persuaded a B2B firm selling office equipment to give him several years of sales and compensation information. He focused on the issue of timing games: Was there evidence that salespeople were pushing or pulling sales from one quarter to another to help them hit their quotas and earn incentive pay? If you tell them they will receive a gift at the end of a period, they work harder. In fact, even before we made our recommendations to the company in our study, managers there decided to move to cumulative quotas. Researchers studying sales force compensation have long been guided by the principal-agent theory. I would tell sales managers to be extremely careful in setting and adjusting quotas. The company worried that the system was too focused on outcomes and might over- or under-reward reps for factors outside their control. A version of this article appeared in the April issue pp. For instance, some people are more motivated by cash, others by recognition, and still others by a noncash reward like a ski trip or a gift card.
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