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EXPRESS: Do Activity-Based Incentive Plans Work? Evidence from a Large-Scale Field Intervention
Journal of Marketing Research ( IF 6.664 ) Pub Date : 2021-05-10 , DOI: 10.1177/00222437211020013
Raghunath Singh Rao , Madhu Viswanathan , George John , Sunil Kishore

Many firms incorporate activity-based incentive (ABI) compensation into their pay plans. These ABIs are based on salespersons’ activity measures derived from their call reports. Despite their prevalence and theory-based expectations, there is a distinct lack of empirical work studying the sales productivity effects of ABI pay. With the cooperation of a large pharmaceutical firm, the authors conducted a three-year-long intervention based on a “treatment-removal” design. Their first intervention added modest ABI pay for frontline salespeople and their supervisors across 305 sales territories; the second intervention removed ABI pay from the salespeople, and the third intervention removed ABI pay from the supervisors as well, returning to the status quo.

Using detailed territory-level data from the intervention in conjunction with syndicated market-level data and employing synthetic control procedures, the authors find sales gains of around 6-9% from each of the two ABI interventions relative to the no-ABI baseline. These effects are moderated by the number of salespeople in a territory, with territories having more salespeople showing larger effects. Analyses of activity effects show that when supervisors are paid ABIs, they exert behavior control downwards on salespeople.

Managerially, both ABI schemes improve performance over an output-only pay plan. Between the two, a rudimentary gross profit impact calculation shows that ABIs targeted at supervisors alone are more efficient than ABIs targeted at both salespeople and their supervisors. The results support tying compensation to call reports despite the potential for self-serving biases in these measures because supervisors are able to exercise more behavior control with ABIs.



中文翻译:

表达:基于活动的激励计划有效吗?大规模现场干预的证据

许多公司将基于活动的奖励(ABI)薪酬纳入他们的薪酬计划。这些ABI基于销售人员从其通话报告中得出的活动度量。尽管他们普遍存在和基于理论的期望,但仍然缺乏实证研究工作来研究ABI薪酬的销售生产率效应。在一家大型制药公司的合作下,作者基于“去除治疗”的设计进行了为期三年的干预。他们的首次干预为305个销售地区的一线销售人员及其主管增加了适度的ABI报酬;第二次干预从销售人员中删除了ABI的工资,第三个干预也从主管中删除了ABI的工资,恢复了现状。

通过将干预措施的详细地域级别数据与联合市场级别的数据相结合,并采用综合控制程序,作者发现,相对于无ABI基线,两种ABI干预措施中每项的销售收益约为6-9%。这些影响由一个地区中销售人员的数量来缓和,而区域中有更多的销售人员则表现出更大的影响。对活动效果的分析表明,当主管获得ABI报酬时,他们会向下推销员行为控制。

从管理上讲,这两种ABI方案都比仅基于输出的薪酬计划提高了绩效。在这两者之间,初步的毛利润影响计算表明,仅针对主管的ABI比针对销售人员及其主管的ABI效率更高。尽管在这些措施中可能存在自我服务偏差的可能,但结果支持将呼叫报告的费用捆绑在一起,因为主管可以通过ABI行使更多的行为控制。

更新日期:2021-05-11
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