Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • April 2021
  • Article
  • Management Science

The Effects of Quota Frequency: Sales Performance and Product Focus

By: Doug J. Chung, Das Narayandas and Dongkyu Chang
  • Format:Print
  • | Pages:20
ShareBar

Abstract

This study investigates the comprehensive and multidimensional effects of quota (goal) frequency on sales force performance. We develop a theory of salespeople’s behavior—aggregate effort and the product type focus—in response to the temporal length of a sales-quota cycle. The theory includes many realistic elements, such as salespeople’s multi-dimensional effort, heterogeneity in ability, product focus, and forward-looking behavior. We test our theory through a field experiment in which we vary the sales force compensation scheme of a major retail chain in Sweden. Consistent with the developed theory, we find that shifting to a temporally frequent quota plan leads to an increase in sales performance for low-performing salespeople by preventing them from giving up in later periods within a quota-evaluation cycle. However, we find a decrease in sales performance for high-performing salespeople. In addition, with quotas set over short time horizons, the high-performing salespeople focus mainly on low-ticket products, resulting in a decrease in both sales volume and the sale of high-ticket products, thus reducing the firm’s profits.

Keywords

Sales Force Compensation; Field Experiment; Quotas; Quota Frequency; Commissions; Bonuses; Goals; Salesforce Management; Compensation and Benefits; Goals and Objectives; Behavior; Performance

Citation

Chung, Doug J., Das Narayandas, and Dongkyu Chang. "The Effects of Quota Frequency: Sales Performance and Product Focus." Management Science 67, no. 4 (April 2021): 2151–2170.
  • Find it at Harvard
  • Read Now

About The Author

Das Narayandas

Marketing
→More Publications

More from the Authors

    • July 2024
    • Faculty Research

    Driving Transformation: Jeff Jones at H&R Block

    By: Nitin Nohria, Das Narayandas and Kayti Stanley
    • June 2024
    • Faculty Research

    Driving Transformation: Jeff Jones at H&R Block

    By: Nitin Nohria, Das Narayandas and Kayti Stanley
    • March 2024
    • Faculty Research

    Loris

    By: Shunyuan Zhang and Das Narayandas
More from the Authors
  • Driving Transformation: Jeff Jones at H&R Block By: Nitin Nohria, Das Narayandas and Kayti Stanley
  • Driving Transformation: Jeff Jones at H&R Block By: Nitin Nohria, Das Narayandas and Kayti Stanley
  • Loris By: Shunyuan Zhang and Das Narayandas
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College.