Effects of top-performer rewards on fellow salespeople: a double-edged sword

Rewarding top performers is of strategic importance to the sales organization. Top-performing salespeople not only contribute significantly to the success of their firm but may also motivate the skill development of peer salespeople. However, both academic research and anecdotal evidence suggest that top performer rewards can boomerang by damaging peer salespeople's morale and productivity, although the underlying mechanisms and boundary conditions remain unclear. Using a sample of salespeople and their managers from financial investment firms in Taiwan, the authors uncover both positive and negative effects of top-performer rewards. Specifically, it is found that when behavior control is employed, top-performer rewards are positively associated with perceived top-performer customer-relationship-building competence only when overall organizational justice is high. By contrast, when organizational justice is low and behavior control is employed, top-performer rewards give rise to perceived favoritism. Moreover, in large sales units, top-performer rewards are much less likely associated with perceived favoritism when organizational justice is high. It is through the perceived top-performer customer-relationship-building competence and perceived favoritism that top-performer rewards have a double-edged sword effect on fellow salespeople's selling skills, opportunism, and sales performance. Theoretical and managerial implications are discussed.     

When Do Rewards Have Enhancement Effects? An Availability Valence Approach

It is commonly argued that although rewards induce behaviors, they undermine attitudes and motivation for subsequent action. This perspective has been applied in a consumer setting to suggest that sales promotions such as coupons will undermine consumer brand evaluations and brand loyalty. Instead of focusing on the undermining effects of promotional rewards, this research applies the availability valence hypothesis (Tybout, Sternthal, & Calder, 1983) to predict and explain when rewards will enhance recipient response. Two experiments demonstrate that an immediate reward from a product‐related source enhances product evaluations by making favorable information more accessible than unfavorable information. Promotions enhance the relative accessibility of favorable information when their benefits are directly experienced and the salience of the promotion's task‐contingency is diminished by maximizing consumer behavioral freedom.     

Book Review

In most industries, sales force turnover is high and very costly to an organization. This paper argues that sales force turnover refects the quality of sales management performance and that a systematic analysis of sales force turnover can provide clear guidance to increased sales management’s practices and effectiveness. For that purpose, a simple and fexible fve-step procedure relying on the concept of a salesperson’s “replacement value” is proposed. It requires only some systematic data collection from leavers at the exit interview time. A case study illustrates the procedure.     

ANTECEDENTS OF INVOLUNTARY TURNOVER DUE TO A REDUCTION IN FORCE

This study examined antecedents to involuntary turnover due to a reduction in force. The authors used structural equation modeling and logit regression analysis with a sample of 194 salespeople to test an exploratory process model of involuntary turnover. Results showed that general mental ability and conscientiousness were indirectly correlated with involuntary turnover through job performance, whereas the relationship of tenure, gender, job involvement, sales volume, and supervisory ratings of job performance to turnover was direct. The results demonstrate that involuntary turnover decisions are significantly related to performance; however, other variables also influenced these decisions. Implications and future research needs are discussed.     

Show me The Money! do Financial Rewards for Performance Enhance or Undermine The Satisfaction from Emotional Labor?

Does satisfaction from performing emotional labor (EL)—maintaining positive emotions with customers as part of the job—depend on the financial rewards available for good service? According to a “controlling perspective” of rewards, satisfaction from performing EL may be undermined by financial incentives, but based on a “valuing perspective” of rewards, the relationship should be enhanced. We contribute to the literatures on EL and performance‐contingent rewards with a “full‐cycle” inquiry of this question conducted with (a) a field survey of diverse occupations in the United States, (b) an experimental call center simulation with U.S. college students, and (c) a multilevel study of Taiwanese sales firms. Overall, financial rewards for service performance enhanced, rather than undermined, satisfaction from EL requirements and effort (i.e., surface acting) with customers. Performing EL by modifying feelings (i.e., deep acting) was positively related to job satisfaction regardless of rewards, beyond personality traits. Results have implications for reward structures and enhancing job satisfaction with this increasingly common form of labor.     

A dynamic multilevel model of demographic diversity and misfit effects

In this study, the authors proposed and evaluated the linkages of a dynamic multilevel model of demographic diversity and misfit effects in a large sample of quick-service restaurants. Using a cross-level approach, the authors studied an employee's demographic misfit in relation to coworkers' demographics as a predictor of turnover risk over time. At the business-unit level, they studied changes in restaurant demographic diversity in relation to changes in profitability over time and unit turnover rates in relation to profitability. The authors also studied the impact of the match between the racial compositions of the restaurants and their communities on profitability. The results supported linkages between demographic misfit and turnover and partially supported a negative association between racial diversity and changes in profitability.     

Sales Force Turnover and Retention: A Research Agenda

Identifying, acquiring, and retaining top sales talent remains a priority in many sales organizations because salesperson turnover remains such an intractable management problem. This paper seeks to encourage and enrich continued research on sales turnover by introducing recent methodological and theoretical advances in psychological, economic, and organizational theory. First, we suggest an examination of sales turnover guided by social network theory. Second, we propose the simultaneous consideration of the interplay between variables within a comprehensive, integrated multilevel framework. Third, in keeping with the shift in research designs initiated in management, our model includes the concept of “shocks”—jarring events that could drive turnover decisions. Finally, we propose to examine sales turnover within an international context. The conceptual framework we present outlines how sales organizations might effectively address sales force turnover and, as a consequence, improve productivity. We conclude by suggesting some specific research questions intended to provide direction for researchers interested in identifying and investigating underresearched linkages.     

Salesperson Motivation to Perform and Job Satisfaction: A Sales Contest Participant Perspective

Salespeople's perceptions of a program of sales contests offered by several organizations over time are empirically assessed, and related to both sales performance and job satisfaction. The results suggest variability in attitudes toward contest benefits, goals, rewards, budget, themes, timing and frequency, and outcomes. Conclusions and managerial implications are discussed. The authors gratefully acknowledge the support of the Direct Selling Education Foundation in this project. Special thanks to Marlene Futterman.     

Choking on the Money: Reward-Based Performance Decrements Are Associated With Midbrain Activity

ABSTRACT— A pernicious paradox in human motivation is the occasional reduced performance associated with tasks and situations that involve larger-than-average rewards. Three broad explanations that might account for such performance decrements are attentional competition (distraction theories), inhibition by conscious processes (explicit-monitoring theories), and excessive drive and arousal (overmotivation theories). Here, we report incentive-dependent performance decrements in humans in a reward-pursuit task; subjects were less successful in capturing a more valuable reward in a computerized maze. Concurrent functional magnetic resonance imaging revealed that increased activity in ventral midbrain, a brain area associated with incentive motivation and basic reward responding, correlated with both reduced number of captures and increased number of near-misses associated with imminent high rewards. These data cast light on the neurobiological basis of choking under pressure and are consistent with overmotivation accounts.     

奖赏历史对自上而下注意控制的调节：促进还是干扰？

奖赏能够影响注意控制,但是关于奖赏历史对注意控制的影响还处于争论之中。本研究以大学生为被试,采用点探测范式,操作了奖赏历史和奖赏额度,考察了奖赏历史对自上而下注意控制的调节作用。实验一结果发现,有奖赏-无奖赏条件下前后阶段反应时无显著差异,无奖赏-有奖赏条件下有奖赏阶段的反应时显著短于无奖赏阶段。实验二操作了奖赏额度,结果与实验一一致。整个研究表明,奖赏历史促进自上而下注意控制,先前奖赏对随后自上而下注意控制产生持续促进效应。     

Delay of gratification in psychopathic and nonpsychopathic offenders.

Delay of gratification is a prototypical measure of self-control that merits systematic investigation in psychopaths. White male prisoners were provided with repeated opportunities to select an immediate response with uncertain reward or a delayed response with a higher rate of reward under one of three incentive conditions. Psychopaths' performance depended on their level of trait anxiety and incentive condition: Whereas low-anxious psychopaths were relatively unwilling to delay when omission of expected rewards also incurred monetary punishments, they displayed relatively superior performance when the task involved rewards only. Findings complement those for passive avoidance learning in psychopaths and suggest that inhibitory self-control in low-anxious psychopaths is somewhat impaired under conditions involving a combination of monetary rewards and punishments.     

Effects of Probabilistic Rewards on Recycling Attitudes and Behavior1

Two studies compared the attitudinal and behavioral effects of certain rewards and lotteries. In a laboratory experimental study, lotteries produced significantly more attitude change than cash payments. The greatest attitude change occurred among lottery winners. In a quasi-experimental field study, subjects rewarded with lottery tickets recycled glass and newspaper more frequently than subjects receiving other individual or group rewards. Attitude change was not affected by the type of reward Implications for the design of incentive programs to increase prosocial behavior are discussed     

Leader Behavior,Work-Attitudes,and Turnover of Salespeople: An Integrative Study

Data were collected from the national field sales force of a major consumer goods manufacturer. The study develops a structural model of salespeople's perceptions of their supervisors' behaviors (i.e., leadership consideration and leadership role clarity), and the influence of supervisors' behaviors on the sales force's role perceptions, job anxiety, job satisfaction, propensities to leave and actual turnover. The study integrates previous research regarding sales force turnover to form the underpinning for the relationships between the constructs, and finds empirically that sales managers' leadership behaviors directly and indirectly influence job satisfaction, which influences salespeople's propensity to leave the organization and actual turnover.     

Dopamine modulates frontomedial failure processing of agentic introverts versus extraverts in incentive contexts

The agency facet of extraversion (aE) describes individual differences in goal-directed behavior and has been linked to dopamine function in incentive contexts. Because dopamine presumably modulates the processing of negative feedback/failure, aE may relate to failure processing in incentive contexts. To test this hypothesis, N = 86 participants performed a virtual ball-catching task. An incentive context was created by displaying potential rewards and subtle manipulations of task performance, which either was (control group) or was not (incentive context group) made explicit. To probe the involvement of dopamine, participants received either placebo or the selective dopamine D2 receptor antagonist sulpiride (200 mg). Failure processing was assessed through negative-feedback-evoked differences in the frontal midline theta electroencephalogram power (DFMT) and in the feedback-related negativity event-related potential component (FRN). Before incentives were introduced, DFMT (but not the FRN) was related to neuroticism/anxiety. Importantly, once incentives were displayed, aE was associated with DFMT, FRN, task performance, and changes in self-reported positive affect, which further depended on incentive context group and/or substance group: In the incentive context group but not in the control group, agentic extraverts showed relatively blunted DFMT after placebo. Sulpiride significantly enhanced DFMT, whereas it reduced FRN amplitudes and performance in agentic extra- versus introverts. These findings provide strong support for current dopamine models of aE and failure processing, and also highlight the importance of task context. Moreover, the dissociations of FRN and DFMT suggest the existence of two nonredundant electrophysiological indices of feedback processing, both relating to dopamine and aE.     

Does Salesperson Perception of the Importance of Sales Skills Improve Sales Performance,Customer Orientation,Job Satisfaction,and Organizational Commitment,and Reduce Turnover?

This research was designed to determine whether salesperson perceptions regarding the importance of specific sales skills and behaviors relate positively to sales performance, customer orientation, job satisfaction, organizational commitment, and lower levels of turnover intentions. The development of the sales skill measure resulted in the creation of two different scales, one focused more on traditional sales skills and the second on more consulting-oriented sales behaviors. The results and conclusions provide support for the concept that skill/behavior development and assessment are worthy pursuits for sales managers and their organizations.     

The Fortune 500 Companies' Selection Criteria for Promotion to First Level Sales Management: An Empirical Study

Since marketing, and particularly selling activities, determine the sources and size of a company's revenue, factors which vitally affect sales force performance are matters of crucial importance to corporate management.

Predicting how a newly appointed first level sales manager will perform in the new leadership task remains a difficult problem and the determination and use of selection criteria appears not to be clearly defined in the literature. Previous research has identified desirable attributes as selection criteria though typically these are neither ranked in importance nor as attributes that “can be developed later through training/experience” or be “innate to the person selected.” This research focused upon the selection criteria and practices of the Fortune 500 companies in selecting/appointing their first level sales managers. The results revealed that (i) the Fortune 500 human resource managers are in agreement with the findings of previous research with regard to which personality and character traits are crucial pre-requisites to good sales management performance; (ii) a surprisingly small number of firms use psychological batteries/tests or qualified psychologists to measure these traits; and (iii) turnover rates, not due to promotion, among first level sales managers appear to be high.     

The Performance Effects of Outcome-Based Incentive Pay Plans on Sales Organizations: A Contextual Analysis

The contextual role of sales volatility, the complexity of customers’ purchase decisions, and the level of monitoring on the performance impact of incentives are examined. Results reveal that the use of an incentive plan is positively related to all three dimensions of organizational performance. This relationship is moderated positively by the customers’ purchase decisions and negatively by sales volatility and monitoring. In addition, the contextual role of sales volatility, the complexity of customers’ purchase decisions, and the level of monitoring differ according to the performance measure used. Implications of the findings are presented, followed by limitations and future research directions.     

Delay discounting as emotional processing: An electrophysiological study

Both theoretical models and functional imaging studies implicate the involvement of emotions within the delay discounting process. However, defining this role has been difficult to establish with neuroimaging techniques given the automaticity of emotional responses. To address this, the current study examined electrophysiological correlates involved in the detection and evaluation of immediate and delayed monetary outcomes. Our results showed that modulation of both early and later ERP components previously associated with affective stimuli processing are sensitive to the signalling of delayed rewards. Together with behavioural reaction times that favoured immediacy, we demonstrated, for the first time, that time delays modify the incentive value of monetary rewards via mechanisms of emotional bias and selective visual attention. Furthermore, our data are consistent with the hypothesis that delayed and thus intangible rewards are perceived less saliently, and rely on emotion as a common currency within decision making. This study provides a new approach to delay discounting and highlights a potential novel route through which delay discounting may be investigated.     

Cutthroat cooperation: The effects of team role decisions on adaptation to alternative reward structures

Structural Adaptation Theory proposes that it is more difficult for teams to change from competitive to cooperative reward conditions than it is for them to change in the opposite direction, and this has been labeled the cutthroat cooperation effect [Johnson, M. D., Hollenbeck, J. R., Ilgen, D. R., Humphrey, S. E., Meyer, C. J., & Jundt, D. K. (2006). Cutthroat cooperation: Asymmetrical adaptation of team reward structures. Academy of Management Journal, 49, 103–120]. The current study investigated whether team role discussion can neutralize this effect and promote successful adaptation from competitive to cooperative reward structures. Consistent with our predictions, in a study that involved 75 four-person teams performing a complex task under cooperative reward conditions, we found that teams with a history of competitive rewards performed worse than teams with a history of cooperative rewards in a control condition. However, this effect was neutralized when teams allocated their roles in a team role discussion. This neutralization effect was driven by behavioral coordination and unmet expectations regarding conflict.