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Dimensions and contingent effects of variable compensation system changes

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  • Johnson, Jeff S.
  • Friend, Scott B.
  • Agrawal, Arvind

Abstract

Compensation systems are regarded as one of the best incentives to motivate salespeople. Organizations aim to align compensation incentives with organizational strategies in order to integrate top-level initiatives with ground-floor implementation, often requiring periodic adjustments to reflect fluctuating market conditions. What is not known, however, is to what extent variable compensation system changes (VCSCs) impact the attitudinal and performance outcomes of salespeople. Using a sample of 306 business-to-business salespeople, the authors study the conditional effects of VCSC. Specifically, the authors conceptualize a multi-dimensional assessment of VCSC – frequency, magnitude, and implementation speed – and investigate each dimension's effect on salesperson job satisfaction and performance, contingent upon two environmental conditions—technological turbulence and competitive intensity. Findings show a mixture of accentuating and attenuating effects on both outcomes, allowing future researchers to gain a better understanding of under which conditions VCSCs impact salesperson attitudes and performance.

Suggested Citation

  • Johnson, Jeff S. & Friend, Scott B. & Agrawal, Arvind, 2016. "Dimensions and contingent effects of variable compensation system changes," Journal of Business Research, Elsevier, vol. 69(8), pages 2923-2930.
    • Handle: RePEc:eee:jbrese:v:69:y:2016:i:8:p:2923-2930
    DOI: 10.1016/j.jbusres.2015.12.061
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    References listed on IDEAS

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    Cited by:

    1. Valerie Good & Douglas E. Hughes & Hao Wang, 2022. "More than money: establishing the importance of a sense of purpose for salespeople," Journal of the Academy of Marketing Science, Springer, vol. 50(2), pages 272-295, March.
    2. Valerie Good & Douglas E. Hughes & Ahmet H. Kirca & Sean McGrath, 2022. "A self-determination theory-based meta-analysis on the differential effects of intrinsic and extrinsic motivation on salesperson performance," Journal of the Academy of Marketing Science, Springer, vol. 50(3), pages 586-614, May.

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