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Publications
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  • September 12, 2017
  • Article
  • Harvard Business Review (website)

What's the Right Kind of Bonus to Motivate Your Sales Force?

By: Doug J. Chung and Das Narayandas
  • Format:Electronic
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Abstract

Companies typically compensate their sales force by using some combination of salary, commission, and bonuses, but executives are often unsure which incentives provide the best motivation. Should bonuses be tied to quotas or should they be given unconditionally? Is it better to use bonuses as a reward or as punishment? A randomized field experiment at a large Indian company investigated these questions, finding that conditional bonuses were more than twice as effective as unconditional bonuses. The results have implications for companies trying to use bonuses to more effectively manage their salespeople.

Keywords

Compensation and Benefits; Motivation and Incentives; Salesforce Management

Citation

Chung, Doug J., and Das Narayandas. "What's the Right Kind of Bonus to Motivate Your Sales Force?" Harvard Business Review (website) (September 12, 2017).
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About The Author

Das Narayandas

Marketing
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  • Analytics for Marketers: When to Rely on Algorithms and When to Trust Your Gut By: Fabrizio Fantini and Das Narayandas
  • Using AI to Adjust Your Marketing and Sales in a Volatile World By: Das Narayandas and Arijit Sengupta
  • Bored Ape Yacht Club: Navigating the NFT World (A) By: Das Narayandas, Scott Duke Kominers and Kerry Herman
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