Rebalancing Fixed and Variable Pay in a Sales Organization: A Business Cycle Perspective

@article{Madhani2010RebalancingFA,
  title={Rebalancing Fixed and Variable Pay in a Sales Organization: A Business Cycle Perspective},
  author={Pankaj M. Madhani},
  journal={Compensation \& Benefits Review},
  year={2010},
  volume={42},
  pages={179 - 189}
}
  • Pankaj M. Madhani
  • Published 3 March 2010
  • Business, Economics
  • Compensation & Benefits Review
The business cycle has a significant impact on the revenue and profitability of sales organizations and directly influences sales compensation costs. Operating leverage is a key variable affecting business performance during different stages of business cycle. Rebalancing fixed and variable pay in the compensation structure helps organizations in the effective management of operating leverage in business cycle stages. This article provides a framework for properly designing pay structure and… 
View on SAGE
papers.ssrn.com
38 Citations
Background Citations
15
Methods Citations
1

38 Citations

Restructuring Fixed and Variable Pay in Sales Organizations: A Product Life Cycle Approach
Organizations must review and update sales management practices and their compensation strategies according to the different stages of product life cycle (PLC). The PLC can be a valid framework for…
Realigning Fixed and Variable Pay: Compensation Management
The business cycle has a significant impact on the performance of the organizations. It influences overall compensation costs. The business cycle involves understanding different phases of the…
Direct Salesforce versus Independent Representatives: A Strategic Choice Across a Business Life Cycle
Sales force structure is critical for the sales organization because they determine how quickly sales forces respond to market opportunities, influence sales people’s performances and affect sales…
Managing Sales Compensation Across the Economic Cycle
Sales organizations need to closely scrutinize the role of their sales force and its overall compensation costs. If organizations adapt to the changing internal and external environment, they are…
Realigning Fixed and Variable Pay in Sales Organizations
The attractiveness of the pay policies of sales organizations can be increased by higher levels of match between individual characteristics of sales people and those of the compensation structure.…
Managing Sales Force Compensation: A Life Cycle Perspective
Sales force compensation is influenced by various factors of development and change occurring at the individual, product, organizational and environmental levels. Companies that adapt to changing…
Sales Compensation Strategy
Sales compensation is of primary concern to both sales employees and sales organization as it is central to their working relationship. Compensation strategy decision regarding pay level (total…
Managing Sales Force Compensation
Sales force compensation is influenced by various factors of development and change occurring at the individual, product, organizational and environmental levels. Companies that adapt to changing…
Effective Compensation Management for Competitive Advantages: Study of Indian IT Sector
Indian IT industry is characterized by high growth largely through exports to various international markets. Exports have been a main focus of the Indian IT industry and a major source of revenues.…
Reallocating Fixed and Variable Pay in Sales Organizations
Organizations design and implement incentive plans to attract, retain and motivate their sales force. With the objective of achieving goal congruence between the sales organization and its sales…
...
...

References

SHOWING 1-10 OF 28 REFERENCES
Determinants of Pay Levels and Structures in Sales Organizations
Two key issues in business-to-business (B2B) sales force management are (1) how much a given sales job should be compensated (pay level) and (2) how much of the compensation should be fixed versus…
Strategic business cycle management and organizational performance: a great unexplored research stream
This lament is as true today as it was almost 20 years ago. Indeed, most scholars continue to ignore one of the most important, but least developed, research streams in all of management strategy and…
The Cyclical Behavior of Price Elasticity of Demand
The mark-up of price above marginal cost can vary either procyclically or countercyclically across the business cycle depending upon competitive variations among industries, the nature of aggregate…
Operating, Financial and Total Leverage and the Effect on U.S. Air Carrier Returns, 1990-2003
The U.S. airline industry has always been highly cyclical and somewhat fixed cost driven. The carriers are thus high in what financial analysts refer to as operating leverage. In addition, the…
The Effect of Implicit Contracts on the Movement of Wages Over the Business Cycle: Evidence from Micro Data
In this paper we address the question of whether wages are affected by labor market conditions in a manner more consistent with a contract approach than with a standard spot market model. From a…
What's Real about the Business Cycle?
This paper argues that a linear statistical model with homoskedastic errors cannot capture the nineteenth-century notion of a recurring cyclical pattern in key economic aggregates. A simple nonlinear…
Sales Force Effectiveness: A Framework for Researchers and Practitioners
This paper presents a Sales Force Effectiveness Framework that organizes the complexities of sales organizations, providing a holistic approach to defining and assessing sales force effectiveness.…
Alternative Reward Strategies and Employee Reactions
Strategic compensation theory argues that rewards should be used to encourage employee activities that support organizational goals, but reward strategies often have confounding effects on employee…
1991),”The effect of implicit contract on the movement of wages over the business cycle: Evidence from micro data
  • Journal of Political Economy,
  • 1991
Measuring Business Cycles.
...
...