Distortion effects of the relationship between sales control systems and motivation: A signaling theory perspective

Salespeople are the primary boundary-spanning agents between the firm and customers, and it has long been assumed that intrinsic and extrinsic motivation are key drivers of performance. However, the link between sales control systems, motivation, and ultimately sales performance remains inconsistent. Under signaling theory, this dissertation reframes formal outcome control and process control as signals that originate from the firm and are received by the individual salesperson and moderated by a novel boundary condition, distortion. Distortion is defined as interference of the initial firm signals through managerial behaviors and actions and how this affects intrinsic and extrinsic motivation, and subsequently sales performance. A two-study design was conducted, the first study being a pretest to validate measures and the novel distortion constructs, and the primary research study that surveyed 416 U.S. sales professionals across B2C and B2B contexts. Results show that distortion significantly moderates the relationships between control system signals and I/E motivation, sometimes contrary to expectations. The hypothesis that distortion negatively affects the relationship between perceived outcome control signals and extrinsic motivation found support, as did the hypothesis that distortion negatively moderates the relationship between perceived process control and intrinsic motivation. However, I found a conflicting positive moderation effect for the relationship between perceived process control signals and extrinsic motivation. This supports the premise that managerial actions that run counter to initial control signal expectations can either dampen or heighten motivation of the individual salesperson. Both intrinsic and extrinsic motivation have positive effects on sales performance, and additional analyses support some indirect paths from the initial sales control signals to performance through I/E motivation. Contributions of this dissertation include: 1) positioning formal sales controls as organizational signals under signaling theory, 2) introducing and validating a novel concept, distortion, and its associated constructs, and 3) providing further evidence of how sales controls effects performance through motivation and the distortion effect. For managers, this research suggests that while actions by managers that run counter to original expectations set down by the firm can have a negative effect, cases exist where these same actions can act as a corrective mechanism.