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Explaining Sales Pay Strategy Using Agency, Transaction Cost and Resource Dependence Theories

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  • David B. Balkin
  • Jérôme Côté
  • Michel Tremblay

Abstract

The purpose of this study was to investigate, using data gathered from 325 French-Canadian organizations, the influence of key constructs related to agency, transaction cost and resource dependence theories on the proportion of salary in sales compensation. Level of task programmability, capacity to observe behavior, career opportunities and financial resources offered were associated with an increased use of salary pay. In contrast, difficulty of measuring result outcomes, availability of product/service-related resources and high marginal sales force productivity were associated with decreased use of the salary component. Results supported the argument that integration of multiple theoretical perspectives offered a better explanation of pay policy. However, the results have not supported the ability of market and selling uncertainty to predict the proportion of salary L'objectif de cette étude était d'examiner, auprès d'un échantillon de 325 organisations, l'influence des construits clés relatifs à la théorie de l'agence, la théorie des coûts de transaction et la théorie de la dépendence des ressource sur la proportion du salaire dans l'enveloppe de la rémunération directe du personnel de vente. Le niveau de programmation des tâches, la capacité à observer les comportements, les opportunités de carrière et les ressources financières offertes étaient associés à une augmentation du recours de la composante salariale. En revanche, le degré de difficulté à mesurer les résultats, la disponibilité de ressources reliés aux produits/services et un grand différentiel de performance étaient associés à une diminution de la composante salaire. Les résultats supportent l'argument de l'intégration d'une multitude de perspecttives théoriques pour expliquer le choix des stratégies salariales.

Suggested Citation

  • David B. Balkin & Jérôme Côté & Michel Tremblay, 1998. "Explaining Sales Pay Strategy Using Agency, Transaction Cost and Resource Dependence Theories," CIRANO Working Papers 98s-28, CIRANO.
    • Handle: RePEc:cir:cirwor:98s-28
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