ISSN 0798 1015

Vol. 39 (Number 45) Year 2018. Page 8

Personal selling, incentives and motivation. A systematic literature review

Venta personal, incentivos y motivación. Una revisión sistemática de la literatura

BULLEMORE, Jorge 1; CRISTOBAL-FRANSI, Eduard 2

Received: 15/05/2018 • Approved: 02/07/2018

Contents

1. Introduction

2. Methodolody

3. Results

4. Conclusions

Bibliographic references

1. Introduction

Increasing sales force productivity is a major concern for modern organizations. The role of selling has become increasingly analytical, and it is a central topic on the agenda of senior management in business markets (Terho, Eggert, Haas, & Ulaga, 2015). It is related to multiple variables, such as the working environment and morale. The majority of research to date on personal selling, incentives and motivation has empirically examined this construct, and some studies develop theoretical frameworks and measurement tools. Great efforts have been made to understand the input variables that help to have committed salespeople who can perform in a proper way. Among these, we can mention several: compensations, sales contests, managers and leaders, salesforce control, the ethical climate, and morale. At the same time, we can mention that academia has made a great effort to study output variables such as exhaustion and turnover. Currently, there does not exist a comprehensive summary of empirical studies exploring how motivation and incentives in organizational settings affect salespeople (e.g., a systematic literature review, SLR), which is a gap in the extant literature. In management research, the literature review is a key tool used to manage the diversity of knowledge in academic inquiry; however, a critique of these reviews is that they are typically descriptive accounts of the contributions of selected writers often arbitrarily chosen for inclusion by the researcher and that these reviews may lack a critical assessment of the included studies (Tranfield, Denyer, & Smart, 2003). In contrast, an SLR is different from traditional narrative reviews in that it adopts a replicable, scientific and transparent process that aims to mitigate bias through exhaustive literature searches and by providing an audit trail of the conclusions. Thus, the purpose of this study is to systematically examine and organize the current body of literature that either quantitatively or qualitatively explores personal selling, incentives and motivation in a given organizational setting.

The following research questions guided this SLR: (a) What are the main findings concerning the impacts and outcomes regarding incentives and motivation for salespersons? and (b) How were they examined (i.e., the methodology)? We begin this paper by summarizing the origin personal selling incentives and motivation and follow with a short discussion of the development of incentives and motivation as a theory and a new research area. Next, a summary of the method used for selecting and reviewing the literature is explained, with details on the search strategy, analysis, and assessment of the quality of the reviewed studies. Then, we present our findings of the SLR on empirical studies that have explored personal selling incentives and motivation. In addition, we discuss the methodological contribution of conducting SLRs in the field of management as an effective method for thematically mapping and holistically viewing new research topics. We conclude by offering suggestions for future research and practice.

1.1. Personal Selling, Incentives and Motivation

Salespeople have a key role in long-term buyer-seller relationships. As the primary link between the buying and selling firms, they have a large influence on the buyer’s perceptions of the seller’s reliability, the value of the seller’s services and, consequently, the buyer’s interest in continuing the relationship (Biong & Selnes, 1997). In their paper, Sales Force Effectiveness: A Framework for Researchers and Practitioners, Zoltners, Sinha, and Lorimer (2008) present a framework that organizes the complexities of sales organizations. Firms are affected by forces and decisions that originate within the company, as well as by forces that originate externally. A common basis in sales management research is that superior performance requires high levels of effort from vendors, which, in part, is generated by supportive leadership (Jaramillo & Mulki, 2008). Adaptive selling behavior increases salespersons’ outcome performance and customers’ evaluations of satisfaction with the product and with the salesperson, which enhances customers’ anticipation of future interactions with the salesperson (Román & Iacobucci, 2010).

1.2. Sales leaders and sales management

The aim of the leader is to motivate the employee to engage in actions that help the firm achieve its objectives (Smith, Montagno, & Kuzmenko, 2004). In the last few years, abundant research has been published on the positive link between sales managers, effectiveness and sales performance: e.g., Boichuk et al., 2014; Hayati, Atefi, & Ahearne, 2017; Kraus, Haumann, Ahearne, & Wieseke, 2015; Kumar, Sunder, & Leone, 2014; Micevski, Kadic-Maglajlic, Banerjee, Cadogan, & Lee, 2017. One of the duties of managers is to coach their employees. Professional sales coaching is considered an important sales force developmental program by both sales practitioners and researchers (Badrinarayanan, Dixon, West, & Zank, 2015). Increasing the amount of coaching can engender positive attitudes and behaviors in salespeople. More coaching time should be devoted to younger salespeople, salespeople with lower confidence in the superiority of the company's products over competitor brands, salespeople with fewer years of formal education, and salespeople whose values fit the least with that of the organization (Onyemah, 2009). The amount of coaching that an employee receives each month predicts objective performance improvements over time (Liu & Batt, 2010).

1.3. Exhaustion/Turnover

Sales force performance and turnover are two of the most important issues encountered by organizations. Sales force turnover reflects the quality of sales management performance and that a systematic analysis of sales force turnover can provide clear guidance to increase sales management practices and effectiveness (Darmon, 2008). Coworker and customer incivility interact to predict decreased sales performance and increased absenteeism (Sliter, Sliter, & Jex, 2012). Role stress and work overload mediate the effect of self-efficacy on capability rewards and pay satisfaction (Mulki, Lassk, & Jaramillo, 2008). Aggressive sales pressure results in negative satisfaction and trust outcomes, and directive sales pressure does not (Zboja, Clark, & Haytko, 2016). In most industries, sales force turnover is high and very costly to an organization. Salesperson burnout continues to be a major concern among sales firms. The scientific literature suggests that emotional exhaustion is a direct predictor of job performance, whereas depersonalization and personal accomplishment have an indirect effect on job performance (Rutherford, Shepherd, & Tashchian, 2015). According to the research of Skiba, Saini, and Friend (2016), cost prioritization increases sales force turnover. Perceived supervisor support is an indirect predictor of turnover intentions through perceived organizational support and performance. Distributive justice, procedural justice, and interactional justice are indirect predictors of turnover through other variables. The salesperson’s performance is related directly to both turnover intentions and turnover (DeConinck & Johnson, 2009).

1.4. Ethics and ethical climate

An ethical work climate is a multidimensional construct and its dimensions influence marketing employees' job attitudes and job behaviors (DeConinck, 2010). Perceived barriers to career advancement have a significant negative impact on the organizational commitment of sales employees. There is a negative influence of perceived barriers to career advancement on organizational commitment, which is more powerful among account executives than among sales managers/directors (Briggs, Jaramillo, & Weeks, 2012b). How sales managers are rewarded may shape how they approach the management of ethical behavior in their sales teams (Cadogan, Lee, Tarkiainen, & Sundqvist, 2009). An ethical climate moderates the influence of performance on intentions to leave, with higher-performing salespeople reporting greater intentions to leave in the lower ethical climate condition (Fournier, Tanner, Chonko, & Manolis, 2010).

Salespeople’s perceptions of their company have a significant effect on individual and organizational outcomes (Briggs, Jaramillo, & Weeks, 2012a). Ethical salesperson behavior is positively related to trust in the salesperson. Moreover, the effects of ethical salesperson behavior on buyer commitment and buyer behavior are completely mediated by this trust. Ethical salesperson behavior is most influential in driving desirable resource-based and social relationship returns and least influential in driving desirable economic returns. The effects of ethical salesperson behavior are moderated by buyer age such that they become significantly stronger as buyer age increases (Hansen & Riggle, 2009).Understanding what contributes to salesperson turnover helps reduce turnover and its deleterious consequences. Self-efficacy combined with problem-focused coping significantly reduces salespersons’ turnover intentions (Lewin & Sager, 2010).

1.5. Sales people Incentives

A company's sales compensation plan is designed to attract, retain, and reward talented salespeople who can win and keep customers. Under certain circumstances, either quota bonuses or sales bonuses may be optimal compensation plans (Bakó & Kálecz-Simon, 2017). Companies make several common mistakes with sales compensation, as key researcher Zoltners (2015) notes in the Harvard Business Review:

“Over- or underincentivizing key products, setting quotas too high or too low, and underpaying top performers or overpaying people with good territories. Companies often get the proportion of incentive pay wrong, too, because they fail to account for ‘free sales’—residual sales they get nearly automatically.”

Firms sometimes use sales contests to motivate salespeople to achieve short-term objectives and to boost sales. However, sales contests may also encourage salespeople to adopt less relational behaviors and limit their ability to manage customer relationships, as manifested in their customer listening practices (Koehl, Poujol, & Tanner, 2016). Knowledge about sales contests effectiveness at the individual salesperson level remains sparse. In consultative selling situations, contests can generate a net sales increase despite the occurrence of timing games, and the sales gain is higher in districts with lower sales potential and among salespeople with higher sales ability (Gopalakrishna, Garrett, Mantrala, & Sridhar, 2016). An equitable distribution of rewards affects important job outcomes such as satisfaction, voice (constructive suggestions for improvement of the firm), and exit (quitting the firm) (Arnold, Landry, Scheer, & Stan, 2009).

For this research, we are going to use a systematic literature review (SLR), which is an objective, replicable, systematic, and comprehensive method, and the process is reported in the same manner as for reporting empirical research (Weed, 2005). The SLR has its origins in the medical field and has been developed through the Cochrane Collaboration (Booth, 2001; Hemsley‐Brown & Oplatka, 2006; Sheldon & Chalmers, 1994). Klassen, Jadad, and Moher (1998) define an SLR as ‘‘a review in which there is a comprehensive search for relevant studies on a specific topic, and those identified are then appraised and synthesized according to a pre-determined explicit method’’ (p. 700). The SLR has been recognized as a highly effective and transparent method for gathering and analyzing a body of knowledge (Khusainova, De Jong, Lee, Marshall, & Rudd, 2018). In marketing, sales management and personal selling, various authors have used the SLR as a research method, e.g., Galvagno & Dalli, 2014; Johnsen, Miemczyk, & Howard, 2017; Mari & Poggesi, 2013; Sarmento & Simões, 2018; Snyder, Witell, Gustafsson, Fombelle, & Kristensson, 2016. This SRL explored research studies that have examined incentives and motivation in personal selling. The approach of this research involved broad surveys of significant databases, with the aim of guaranteeing, to the fullest extent possible, all pertinent publications on incentives, motivation and personal selling, maintaining attention on publications of the most prominent relevance to the research questions, for example, empirical studies that have investigated incentives in personal selling. Next, we discuss our search methods, inclusion and exclusion criteria, sample, and data analysis.

2.1. Search methods

Peer review articles were recognized through inquiries on relevant electronic databases available in the authors’ university library system. The databases included in this review were Emerald Full-Text, BEI, EBSCO (Business Source Premier and PsycINFO), Ingenta (including ScienceDirect), ERIC and the International Bibliography of the Social Sciences (IBSS). Internet hand searches and Internet searches were additionally performed to recognize auxiliary references and further publications by the authors identified in the original searches, for example, the Journal of Personal Selling and Sales Management and the Journal of Marketing. All results were limited to English-only peer-reviewed journal articles. The searches for published research were performed in a systematic manner, following the order of the databases listed above. The searches of electronic and on-line databases utilizing thesaurus search terms were performed and followed amid the hunt procedure. The inquiries required the authors to distinguish thesaurus terms and combine them with “university(ies)” or “higher education” for search purposes; for example, incentives, motivation, personal selling, sales management were used for systematic searching. The goal was to guarantee that, beyond what many would consider possible, all publications in the field were recognized while maintaining the emphasis on publications of the most noteworthy relevance to the research questions to identify the best evidence for the review. The initial search required that the articles included in the review were studies that must (1) be published in a peer-reviewed journal; (2) be in the English language; and (3) use the keywords ‘‘sales incentives’’, “personal selling incentives” and “personal selling motivation”. The search was limited to publications between 2008 (January) and 2018 (March). The numbers of articles containing the keywords ‘‘sales incentives’’, “personal selling incentives” and “personal selling motivation’’ retrieved from each database was recorded. Next, we inspected whether there were any outer copies from the current databases and from past databases that had just been searched. We recorded the quantity of external duplicates and, afterward, erased the duplicated journal articles from the last database searched while keeping a running aggregate of the new articles found. When all possible articles had been distinguished, we conducted a second screening to assess their qualification against the inclusion criteria and then recovered the full content articles for those that met the consideration criteria. The consideration criteria for the second screening required the following conditions: (1) being in the English language; (2) being an empirical study; (3) discussing sales incentives and/or motivation as the main issue; and (4) examining our research topic either quantitatively or qualitatively. Articles were rejected if any of these four conditions were not addressed in the abstract, the results, or the discussion sections of the respective study. Finally, extra articles meeting the inclusion criteria were found by analyzing the book indices of assets distinguished through the auxiliary screening.

Peer-reviewed publications were identified using the key terms outlined in the inclusion and exclusion criteria section above. A total of 192 articles meeting the initial inclusion criteria (Table 1) were retrieved.

Table 1
Peer-reviewed articles found first inclusion and exclusion criteria

In the second stage of this SLR process, each publication was analyzed for its pertinence to the remit of the review and following the strict application of the search parameters. For this purpose, all searches were tracked using a database, and the selected citations were documented using reference manager software (with links to original sources) and a Word database. After the secondary search process was conducted, a final sample of 28 appropriate studies was obtained. The 28 published articles were drawn from a variety of peer-reviewed journals (n = 13). Table 2 depicts the list of journals included in the study and the number of articles included from each journal.

Table 2
Number of articles found per Journal

Garrard (1999) developed the matrix method as a strategy for organizing and extracting pertinent information from publications. For this research, the following information was extracted from each article: (a) What are the main findings concerning the impacts and outcomes regarding incentives and motivation for salespersons? and (b) How were they examined (i.e., the methodology)? The findings from these studies were summarized and placed into a matrix (i.e., tables). Our SLR findings consist of a synthesis of the results from all 28 empirical studies (see Table 3):

Table 3
Key Features of the 28 Papers Used for the Review

3.1. Data Analysis

Overall, this review highlights that incentives and motivation for salespersons are being researched and tested across a variety of contexts, cultures, disciplines, and themes. Our sample included 1 literature review, 25 quantitative studies, 1 mixed method study (quantitative plus literature review), and 1 theoretical paper, all empirically assessing sales and motivation for sales people. Thus, this review illustrates that the topic is being explored both quantitatively and qualitatively. Conclusive statements were made based on the synthesis of the findings from each article.

3.2. Findings

Bonus and compensation. Sales and human resource managers invest financial and other resources to effectively motivate and manage their sales workforce. Implementing an effective sales incentive program can be challenging. In times of economic recession, the importance and complexity of managing incentive programs are exacerbated. During periods of market contraction, businesses sometimes tend to shift focus from sales growth and expansion to cost reduction and savings. Therefore, it becomes increasingly important to understand which types of incentive programs are most effective so that they can be justified and perhaps modified to improve their effectiveness even during difficult economic conditions (Jiménez et al., 2013). Managers should be careful in setting and adjusting quotas. Research also suggests that it is important to pay attention to the timing of bonuses: a reward given at the end of a period is more motivating than a reward given at the beginning (Chung, 2015). 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 (Miao et al., 2017). Sales control interactive effects should be considered when studying the relationships among sales control systems, salesperson motivation, and job outcomes (Miao & Evans, 2014). The amounts of quarterly and annual pay-for-performance are both positively related to controlled motivation but are differently related to the dependent variables due to different relations with autonomous motivation (Kuvaas et al., 2016). However, compensation systems can generate peer effects and competition in collocated sales teams (Chan et al., 2014). In response to a reduction in compensation, however, individuals at high pay levels change their effort less than individuals at lower pay levels (Dustin & Belasen, 2013). Companies with a compensation system based on a fixed salary use behavior control more than companies with a compensation system based on commission; salespeople who receive a greater proportion of compensation as a fixed salary yield better individual performance than those who are paid by commission; salespeople who receive a greater proportion of their pay as a fixed salary are more effective than those paid largely by commission (Küster & Canales, 2011). In this way, lump-sum bonuses primarily motivate salespeople to work harder—a result that is consistent with the widespread use of bonuses in practice (Steenburgh, 2008). Bonuses enhance productivity across all segments (Chung et al., 2013). Motivating the right sales force behaviors using these traditional large short-term individual incentives becomes more challenging. However, these incentives can create undesired consequences, including an organizationally unproductive short-term focus among salespeople that leads to a counterproductive culture and that hurts company performance (Zoltners et al., 2012). Group incentives can outperform individual incentives, and the relative efficacy of group incentives depends on three important factors. For the group incentive to work better than the individual incentive, the group-based component in the former cannot be too large (Lim & Chen, 2014).

Sales contests. Sales contests are widely employed to improve short-term sales performance. Some academics argue that contests increase sales by stimulating salespeople, while critics say that contests merely encourage the strategic timing of sales efforts. In consultative selling situations, contests can generate a net sales increase despite the occurrence of timing games, and the sales gain is higher in districts with lower sales potential and among salespeople with higher sales ability (Gopalakrishna et al., 2016). In a sales contest, feelings of disappointment reduce profits regardless of territory characteristics (Yang et al., 2013). Specialized personal incentives (SPIs) include cash rewards granted to salespeople for meeting interim performance goals within the regular sales quota period (monthly, quarterly, etc.). Because firms often institute multiple SPIs, a steadily growing sales trajectory in a sales period is more strongly associated with period-end success than a sales trajectory that is relatively flat early but has a sharp spike later in the period (Ashutosh & Syam, 2018). Regardless, sales contests have no adverse impact on other drivers of customer value, such as customer churn and purchase frequency (Garrett & Gopalakrishna, 2010).

Climate and morale. An ethical work climate can directly affect salespersons' job attitudes and outcomes (DeConinck, 2011). Despite the extensive literature on organizational climate and culture and their impact on an organization's sales activities, the diversity of theoretical perspectives makes it difficult for sales professionals and scholars to understand the effect of specific climate- and culture-related factors on the performance of salespeople and sales units in an organization (Gustafson et al., 2018). Top-performing salespeople are attracted to organizations that provide opportunities to make full use of their abilities. Meaningfulness is critical to sales because it impacts salespersons' performance, turnover intentions and felt stress. Further, an ethical climate and customer demandingness influence experienced meaningfulness perceptions (Jaramillo et al., 2013). In today’s competitive environment, salespeople are challenged to create customer value in an ethical manner while meeting performance goals. Sales supervisors play a critical role in ensuring that this challenge is met (Schwepker, 2017).

Sales managers and fairness. Perhaps in no other field is the employee–manager relationship as important as it is in sales. Ethical leadership directly influences salespersons' perception of the degree to which their values fit with the organization's values, their willingness to engage in extra-role behavior, organizational identification, and turnover intentions. Ethical leaders positively influence employees' job attitudes and behaviors (DeConinck, 2015). Perceptions of management fairness are key to salespeople's proportion of total pay generated by pay-for-performance formulas (Rouziès et al., 2017). Abusive supervision is one factor that negatively impacts salesperson outcomes. Perceived justice negatively impacts the life satisfaction of not only the salespeople experiencing the abuse but also the managers administering it. Furthermore, an unjust workplace established by an abusive manager can actually have detrimental effects on selling performance. If salespeople believe that the job is a necessity or either party feels some sense of moral or ethical obligation to their firm, then they are able to overlook the abuse and possibly avoid the ‘double whammy' of negative outcomes associated with it (Gabler & Hill, 2015).

Sales performance is highest when salespeople are highly coachable, highly competitive, and under transformational leadership. Salesperson coachability fully mediates the relationship between transformational leadership and sales performance and partially mediates the relationship between salesperson trait competitiveness and sales performance (Shannahan et al., 2013).

The role of the sales force in the management of companies is increasingly relevant. In a crisis environment, it still reaches a higher position. This situation has been reflected in academia, and as we have said before, there is more research studying the effect of sales management on results. It has been observed that, currently, there is no exhaustive analysis of studies that explore how motivation and incentives affect sellers. Therefore, we consider that the present work is sufficiently justified.

The review of the literature has been performed based on the research questions raised about the impacts and results on incentives and motivation for sellers as well as the methodology used to study them. This review took place at the beginning of 2018. The most up-to-date research has been sought. After several filters, the scientific basis of the study was based on 28 published articles. These works have analyzed incentives and motivation for sellers from different points of view, contexts, cultures, disciplines and themes. The main issues of the studies are pay-for-performance, sales contests and incentives, followed by how the work place and the ethical climate have an impact on salespeople’s motivations. Another important subject of research is leadership among vendors. The main methodologies used for the research are by far quantitative studies, followed by literature reviews. Regarding management implications, sales managers must take into account the different aspects presented above to implement an effective sales incentive program.

4.1. Limitations

Although this systematic literature review was conducted in a disciplined manner, potential limitations must be acknowledged. We limited the search process to indexed journals available through the authors’ university library system that were peer-reviewed published articles written in the English language. Thus, this review did not include non-indexed journals or dissertations because they are not peer reviewed or peer-reviewed articles published in a language other than English. Given the apparent universal interest in the issue, as identified in our review, perhaps there are more empirical studies being published in other languages that would complement or contradict some of the conclusions drawn from this review. However, our attempt to integrate results obtained from qualitative and quantitative data analysis may have limited the ability to sufficiently explore all methodological considerations when combining the findings of both types of empirical studies into a coherent text. To guide future scholars in conducting SLRs, more work on how to assess the quality of qualitative and quantitative research in the field of management is needed. Given that the SLR originated in the medical field, which conducts controlled trial studies, there are few critical appraisal tools that are applicable to the research methods used in other disciplines, such as qualitative inquiry and cross-sectional studies.

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1. PhD©, MBA . Investigador Asociado Facultad de Economía y Negocios. Universidad del Desarrollo, Chile. Contact e-mail: j.bullemore@udd.cl

2. PhD in Economics. Professor at the University of Lleida (Spain). Faculty of Law, Economics and Tourism. Director of the Research Group in Tourism, Social Economy and Knowledge. His main lines of research are the study of sales management, perceived quality, ICT and its impact on the economy and tourism. Email: ecristobal@aegern.udl.cat