EXPRESS: Incentive Design for Sales Managers: Impact on Resource Allocation and Performance

Many firms struggle to design effective incentives for sales managers . Yet despite a vast literature on salespeople’s incentives, little theoretical or empirical research has examined managers’ incentive structures. The authors address a common dilemma that firms face: Should managers’ incentives be based on achieving an aggregate target ( Aggregate Target Scheme , ATS) or instead be linked to the target achievement of each individual territory or salesperson ( Individual Target Scheme , ITS)? A quasi-experiment reveals that, despite ATS’s flexibility and apparent alignment with firm objectives, an ATS-to-ITS transition improved performance , with larger gains among lower-performing and higher-span territories. A scenario-based experiment with sales managers suggests that these effects may stem from the reallocation of resources from high to low performers but provides no evidence of an increase in managers’ overall resource investment. A survey of sales leaders indicates that a sales star bias —a managerial tendency to overallocate resources toward high performers relative to their marginal returns—likely drives suboptimal resource allocation under the flexible ATS. Finally, a supplementary field study documents that, following an ATS-to-ITS transition, managers increased joint fieldwork , especially with the lowest performers, and performance again improved. These results provide insights into managerial incentive design and offer guidance for firms.

Authors

Publication Details

Journal
Journal of Marketing
Published
2026-10-27
DOI
https://doi.org/10.1177/00222429261504830
Primary Topic
Accounting and Organizational Management
Type
article
Field-Weighted Citation Impact
0.00
Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

EXPRESS: Incentive Design for Sales Managers: Impact on Resource Allocation and Performance

Raghu Bommaraju, Rob Waiser, Aritra Bhattacharya
Journal of Marketing
Accounting and Organizational Management
article

EXPRESS: Incentive Design for Sales Managers: Impact on Resource Allocation and Performance

Raghu Bommaraju, Rob Waiser, Aritra Bhattacharya
article en

Abstract

Many firms struggle to design effective incentives for sales managers . Yet despite a vast literature on salespeople’s incentives, little theoretical or empirical research has examined managers’ incentive structures. The authors address a common dilemma that firms face: Should managers’ incentives be based on achieving an aggregate target ( Aggregate Target Scheme , ATS) or instead be linked to the target achievement of each individual territory or salesperson ( Individual Target Scheme , ITS)? A quasi-experiment reveals that, despite ATS’s flexibility and apparent alignment with firm objectives, an ATS-to-ITS transition improved performance , with larger gains among lower-performing and higher-span territories. A scenario-based experiment with sales managers suggests that these effects may stem from the reallocation of resources from high to low performers but provides no evidence of an increase in managers’ overall resource investment. A survey of sales leaders indicates that a sales star bias —a managerial tendency to overallocate resources toward high performers relative to their marginal returns—likely drives suboptimal resource allocation under the flexible ATS. Finally, a supplementary field study documents that, following an ATS-to-ITS transition, managers increased joint fieldwork , especially with the lowest performers, and performance again improved. These results provide insights into managerial incentive design and offer guidance for firms.

Journal of Marketing
Openalex Percentile: Top 6%
Accounting and Organizational Management
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.

Laika access coming soon