The agency theory approach to understanding salesforce compensation plans is modified to incorporate the intratemporal nature of the salesperson's effort-rate decision, i.e., the decision about the effort-rate at any given point in time potentially depends upon the sales performance up to that...

This paper discusses recent advances in the study of salesforce motivation and compensation. Special emphasis is given to quantitative approaches from the economics, finance, and marketing literatures. The paper summarizes the findings in this analytical work in the context of some examples of...

Sales contests are commonly used by firms as a short-term motivational device to increase salespeople's efforts. Conceptually, sales contests and piece-rate schemes, such as salary, commission, or quotas, differ in that in sales contests payment to salespeople is based on relative rather than...

A theory of salesforce compensation plans is presented where the sales of a product depend not only on the salesperson's effort but also on the uncertainty in the selling environment. The firm chooses a compensation plan to maximize its profit taking into account the salesperson's likely effort...

This paper considers the question of how a sales manager should design the optimal compensation scheme for his salesforce when it consists of salespersons of varying selling skills, i.e., when the salesforce is heterogeneous. The manager's problem is to reward the salespersons based on...

Much of the salesforce compensation literature has focused on developing incentive schemes to maximize effort levels on the part of the salesforce. The amount of effort to expend in the selling task is considered to be the sole decision variable for a sales representative. In this paper, we...

Our primary objective in this paper is to analyze a framework that simultaneously examines the role of monitoring and incentives in the design of sales force control systems. Previous research has focused exclusively on the role of incentives in directing salesforce effort. We build on the...

Since the papers of Basu et al. (1985) and Lal and Srinivasan (1993), marketing academics have been interested in the design and implementation of optimal compensation plans. The literature has focused on agency theory as a foundation to help describe and understand this process. Although there...

We study contracting when both principal and agent have to exert noncontractible effort for production to take place. An analyst is uncertain about what actions are available and evaluates a contract by the expected payoffs it guarantees to each party in spite of the surrounding uncertainty....