The Impact of Corporate Praise on Sales Performance through Incentives

In the contemporary business landscape, sales performance is a pivotal factor in ensuring an organization's long-term growth and profitability. To enhance sales performance, many organizations have implemented incentive programs aimed at strengthening employee motivation. Previous research identifies motivational factors as verbal praise, tangible praise, and institutional praise [1], with each type having potentially distinct effects on employee motivation. This study examines the influence of incentives on sales performance, focusing on the three types of praise identified in prior studies. It further analyzes the mediating effects of individual and group incentives on sales performance. Data were collected through a survey administered to LG Electronics sales representatives. Hypotheses were tested using PLS 4.0 (Partial Least Squares Structural Equation Modeling). The empirical findings are as follows: First, verbal praise does not have a significant impact on individual incentives, leading to the rejection of H1-1-1. Institutional praise does not significantly affect group incentives, resulting in the rejection of H1-3-2. Thus, H1 was partially supported. Second, individual incentives were found to have a significant positive impact on sales performance, supporting H2-1. Similarly, group incentives significantly and positively influenced sales performance, supporting H2-2. Consequently, H2 was fully supported.