4SUC6 : "Share your goals" - Compensation Management

You are here: Home

Forum

	CCC Forum	Forum Show latest posts Rules Help

Welcome, Guest
Please Login or Register. Lost Password?

CCC Forum

Key Performance Areas - Level 1

Compensation Management (1 viewing) (1) Guest

Post a new message in "Compensation Management"

Name:

Subject:

topic icon:

Boardcode:

Colour: Size: Close all tags

Message:

Emoticons





More Smilies

preview:

Enter code here

Topic History of: Scientific works
Max. showing the last posts - (Last post first)

Author	Message
Ajay Kalra	Check this paper: Salesforce Compensation Scheme and Consumer Inferences We investigate the salesforce compensation strategy of a firm selling products in a category that several consumers find technically sophisticated, such as electronics or financial products with legal fine print. Consumers are unable to judge the value difference between a baseline product and a product upgrade with add-on features. While the firm and the salespeople are informed of the value of these features, consumers are uncertain. Thus, consumers have to rely on sales assistance to evaluate alternatives. The salesperson decision variables include selling effort and whether to "oversell" the consumer by overclaiming the value of added features. Because sales revenue depends on both the salesperson's selling effort and consumers' valuation of the added features, the salesforce incentive scheme (which can consist of salary, sales commission, or consumer satisfaction-based commission) may induce the short-term oriented salesperson to misrepresent the value of the upgrade. Exaggeration of the value of the added features, however, results in reduced satisfaction levels leading to lower profits for the firm. We show that a salesperson selling products where the value of the upgrade is low prefers to make higher claims when the sales commission rate is sufficiently high. We conjecture that consumers aware of the incentive structure facing the salesperson expect the true value of the add-on feature to be lower than the claimed value. We study the optimal compensation scheme of a firm, which has to communicate her true type and retain its salesforce credibility. We identify the conditions under which a high-upgrade-type firm indicates its true value by altering sales commission rate and satisfaction-based commission rate. http://portal.acm.org/citation.cfm?id=970449&dl=GUIDE&coll=GUIDE&CFID=32765088&CFTOKEN=25615960#
Maxim	What are the scientific works on compensation management?