Scheduling Sales Force Training: Theory and Evidence
University of Central Florida
Simon Graduate School of Business, University of Rochester
University of Texas at Dallas - Naveen Jindal School of Management
International Journal of Research in Marketing, Vol. 22 , pp. 427-440, 2005
To have a productive sales force, firms must provide their salespeople with sales training. But from a profit-maximizing perspective, there are also reasons to limit training: training is expensive, it has diminishing returns, and trained salespeople need to be compensated at a higher level since their value in the outside labor market has increased. Due to these reasons, the following inter-related questions are not straightforward to answer: (1) How much training should be provided and how should training be scheduled over time? (2) How should compensation vary with training? (3) Should salespeople be asked to pay for some or all of their training? An analytical model is developed and analyzed using optimal control theory to provide answers to these questions. Thereafter, an empirical investigation is undertaken that broadly corroborates the analytical findings.
Keywords: Sales force, Training, Compensation, Optimal control
JEL Classification: M3, C6Accepted Paper Series
Date posted: January 23, 2003 ; Last revised: February 4, 2009
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