An empirical analysis of sales-force compensation plans

Article Abstract:

Compensation plan structures that maximize the effectiveness of sales employees are provided a summary of theoretical forecasts sourced from financial, marketing, accounting and economic data on the said compensation plans. An analysis of the various aspects of compensation structures is carried out using three empirical models formulated from data on the sales forces of 286 firms. A positive influence on the salary-total pay ratio is exerted by: volume of sales; the existence of career development programs within the organization; and the sales personnels' seniority, length of service, and educational attainment. The calls generated by the closing of a sale, on the other hand, exert a negative influence on the salary-total pay ratio.

Models, Compensation and benefits, Compensation management, Sales personnel, Salespeople

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Salaries and piece rates

Article Abstract:

The reasons that some workers are paid salaries and others are paid by piece-rate are investigated. Monitoring costs are saved with salaried workers, but at a cost of efficiency. Piece rates are most likely to be paid when it is inexpensive to monitor output, when output can be measured accurately, and when workers have varying ability levels.

Economic aspects, Labor productivity

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Systematic risk and the theory of wage indexation

Article Abstract:

The equilibrium of capital markets is important to optimally indexed wage agreements. Nonsystematic randomness does not affect indexation decisions. Efficient agreements should be independent of nonsystematic risk and should value systematic risk employing the market price of risk in capital markets.

Capital market, Capital markets

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