Effort or Timing: The Effect of Lump-Sum Bonuses
22 Pages Posted: 17 Feb 2005 Last revised: 9 Nov 2008
Date Written: September 1, 2008
This article addresses the question of whether lump-sum bonuses motivate salespeople to work harder to attain incremental orders or whether they induce salespeople to play timing games (behaviors that increase incentive payments without providing incremental benefits to the firm) with their order submissions. We find that lump-sum bonuses primarily motivate salespeople to work harder - a result that is consistent with the widespread use of bonuses in practice, but that contradicts earlier empirical work in academics.
Keywords: compensation methods, salesforce
JEL Classification: G30, J31, J33, L23, M31, M41, M52
Suggested Citation: Suggested Citation